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Fortune will favour the brave CPO

10 January 2011 |

The start of 2011 has seen a debate about procurement’s challenges as the combination of austerity drives and economic recovery converge.
 
Some commentators say the profession risks falling back into obscurity once the recovery really gathers pace.

I share this concern, which was heightened by the recent SM Poll showing that cost reduction remains the number one priority for procurement in 2011. When does the profession make the link to value?

CPOs have enjoyed the spotlight for two to three years now, and have received increased influence as a result. Viewed in this light the results of the survey, which does not even mention making the link to business strategy, are disappointing.
 
With the exception of increased outsourcing and CSR, all the other priorities lay at the low end of procurement’s value chain, which “follow” rather than “influence” business strategy. This clearly needs to change with some urgency if purchasing’s fall back into obscurity and irrelevance are to be avoided.
 
So what is required?

Here are my recommendations:

1. Clear direction. If you don’t know where you are going any road will take you there.

2. Establish an unequivocal link to business strategy.

3. Market the “value” of procurement relentlessly.

4. Engage the business.
 
The key quality required to achieve this is leadership.

Procurement needs brave CPOs who possess the skills, courage and conviction to position procurement in a leadership, rather than support, role and to make the business case to build the required capabilities to operate at this level.

For those of you already working under such a CPO you should learn and absorb as much as possible before carefully considering your next career move. For those of you unfortunate enough not to have a brave CPO, I recommend you find one to work for – why not make it your new year’s resolution? Happy 2011.

4 Responses to “Fortune will favour the brave CPO”

  1. Choose the right direction. If you are going the wrong way, efficient, well lead marching is far worse than dawdling.

    Ban the term “leadership”

    Understand the business.

  2. I completely agree with you on the need for CPOs to link their delivery to value. If we cannot add value to our organisation, then we stand the chance of just being administrative, which may be regarded as anybody’s job. When we add value, we also end up saving cost either in the short, medium or long term. We need to operate strategically to ensure our input counts, this is when we can truly be respected and continue to be a force to reckon with. In doing this, we need to have an appreciable understanding of activities we support in our organisation

  3. No “saving cost” is far too narrow. Procurements task, like every other business fuction, is to make a profit.

  4. I have now completed 42 years in the procurement profession, and I have retired. For as long as I can remember, the arguments have batted back and fore regarding “contribution,” “added value,” “role of the CPO” etc, and yet the profession has apparently still to find its proper voice in business. Actually, I don’t believe this for one minute. I have met and worked with some of the best procurement brains in the country, they know their value. Perhaps we(and CIPS)should start sending out more upbeat messages. If we don’t, nobody else will!

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