This week, Democratic presidential candidate Pete Buttigieg, the mayor of South Bend, Indiana, disclosed client details from his previous job as a management consultant at McKinsey (the firm obtained permission from these clients to release “Mayor Pete” from his NDAs). One of those clients was insurance provider Blue Cross Blue Shield of Michigan. The 2007 job looked to be an overhead cost reduction project, but with a seeming procurement angle to it. The Buttigieg campaign released a statement that said of Buttigieg: “He was assigned to a team that looked at overhead expenditures such as rent, utilities and company travel. The project he was assigned to did not involve policies, premiums or benefits.”
Looking at these three spend areas, the majority of this spending is disbursed to suppliers, so it’s likely not a headcount reduction effort, and more than likely focused within a procurement work stream. Attacking rent and utilities are not necessarily the easiest categories to go after as they are often being bound up in larger facilities, real estate and energy management spend, but the travel category is a little more straightforward of an area for a procurement consultant to cut his/her teeth on.
Regardless, should we care about this? Do we want a presidential candidate who understands procurement and cost discipline? Answer: Yes!
Of course, it doesn’t have to be Buttigieg, and call me a staunch independent here, but every candidate should have experience successfully running private and/or public sector organization where cost discipline is demonstrated, budgets are balanced and savings are put to good use to serve the public good. As Joe Biden once said, “Don’t tell me what you value. Show me your budget and I will tell you what you value.” This is very relevant in procurement regarding spend analysis, contract analysis and performance metrics analysis (of procurement itself and of supplier performance metrics). Let the data tell the story of the spend, the spending process and the demonstrated priorities of stakeholders. Then compare it to goals and stated priorities and let that gap analysis guide your transformation (sorry, as a former management consultant myself, this stuff is now burned into my DNA — and my PowerPoint slide decks).
Top chief procurement officers (CPOs) know this stuff, but so must CEOs. Luckily, more CEOs are increasingly being groomed via executive management development programs that rotate through procurement and supply chain because of the impact that the function can have. And with U.S. federal government’s supplier spending at something like $2 trillion, public procurement best practices adoption is the noblest of pursuits given U.S. deficits and the opportunity costs of squandered/stolen money that could otherwise be put to good use. That is why we do our best to support our sister organization Public Spend Forum!
Someone with Buttigieg’s competencies would also help make a good CPO. He’s multilingual, has military experience in Afghanistan and has management consulting experience that provides transformational experience in “dog years,” even though it can be a dog’s life (as I can personally attest to). Also, he’s open about being gay, and the procurement profession does seem to need a lot more diversity and inclusion for ethnicity, gender, disabilities and sexual orientation within its own four walls.
Regardless of which candidate you vote for in any elections, I think we’d all be best served by public leaders with traits demonstrated by top CPOs: not just politically savvy, but commercially savvy, outcome-focused, practical, service-oriented, empathetic and ethically strong.