Posts Tagged ‘CPO’

I was reading the Executive Coach section of CPO Agenda when I came across a very interesting question for coach Dr Richard Russill, who is a business coach and author, specializing in supply, cost and relationship management.   The question is: “People are debating whether “procurement” is the right name for … procurement.  What do you think?”

Dr Russill replies are: “Despite its dodgy connotations the ‘P’ word is too well embedded in the business vocabulary for it to change. Where Google, even recently, suggested ‘Community Post Office’ or ‘Chief Petty Officer’ for CPO, it now comes up with what this journal stands for. Besides, it is perceptions within companies that matter. It is great if your CEO understands procurement as a key business driver. But re-badging procurement is a waste of time if company colleagues still see it as a function in which they are not involved.

Yesterday I was folding village newsletters into envelopes. Recalling Adam Smith’s pins, I found that it was faster to do all the folding, then the insertions, then the stamping, as separate activities. It was also totally mindless. That’s the problem with functions in business. Despite being functionally excellent they can seem mindless if the job is to follow instructions set by others, as distinct from influencing the process which creates instructions. Procurement is not a function but a cross-business team activity with purchasing and supply operating as a sub plot. The CPO’s dual role is to inspire intelligent commercially-aware decision-making as well as minding the supply task. Making this a reality requires story-telling and tangible supply successes…not a new label on the bottle.”

Well I can’t agree more.  Over the years I have personally lived through many names of our profession such as strategic procurement, operations procurement, procurement and supply chain, purchasing services, enterprise supply chain services, global procurement, and global real estate and purchasing services.  Every two or three years all companies are itching to do some rebranding, but the only thing that matters is how top management engages procurement and the rest of the business teams together.  When I used to be the head of procurement for Greater China in American Express,  I found myself in front of my senior business leaders and stakeholders every 8 months or so, reinforcing everyone that regardless of how our names changed, I would still be there to take care of the same duties.  Yes that is exactly how frequent our restructuring took place.

And this restructuring also means that our titles, levels, geographic and commodity responsibilities keep getting reshuffled.  New organization charts were drawn, and everyone needed to re-apply for the new posts, or even the same posts that they were assuming.  The job applications needed to go through the routine interviewing and grading process.  Some posts were added, and some were eliminated.  Such process lasted at least 3 or 4 months after it was publicized, and I had experienced it more than once druing my tenure.

At the end of the day, my core responsibilities were exactly the same.  The number of my superiors had expanded, and my local stakeholders simply could not care less.  The management consultancy engaged made a buckload of money.

And the world turns.

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On Measure Me This, one of the many measurements of procurement people is how much cost savings we can bring to the company.  Another common scorecard item is how much of the overall spend we get ourselves involved in.  It would make us redundant if we deliver fantastic results but over a very small fraction of the entire spend is unaddressed.   There  is of course a distinction of in-scope or out-scope spend as identified in almost every procurement policy in most established global companies, but we as strategic procurement professionals always strive to push that boundary further.

The key is whether we can add value.  There is no point of getting involved in things that we will only drag down the process.

If we are convinced there are value-adds to bring to the table, we need to bring our strategies, similar successful case studies, potential solutions as well as our execution plans and knock on our internal customers’ doors.  That is very much like a salesperson. 

I recently came across an article on CPO Agenda (CPO stands for Chief Procurement Officers, an executive role that is gaining prominence over the last decade), “Face it, we are salespeople” by Paul Snell, which includes a quote from Roy Anderson, CPO of financial services firm State Street.

“… the ability to implement change was primarily down to the staff you employed.  Do you have people in your organization who are intelligent enough and confident enough to drive change and can be the authority in that category?…”

“… do your staff have the skills to explain change and innovation throughout the business?  They might be a great negotiator or market analyst, but for this, they needed to communicate and sell.  Face it, we are salespeople.  Procurement is definitely long gone.  We sell concepts to internal customers, we sell to our supplier base to be more innovative in their solution set and we sell to the internal customers to explain what the changes need to be…”

Personally and especially in this part of the region, I am seeing very few procurement professionals who do this well.  They are either too boxed-in to their comfort zones of negotiating and bidding, or way too customer oriented that they end up being “corporate servants” which they do not deserve to be.  Striking the balance is a lot harder than it looks, and therefore whenever I hire in my specific area of strategic procurement, I look for these soft skills which are much harder to be groomed comparing to product knowledge or negotiation techniques.

If you are interested, more of Paul Snell’s articles can be found on his blog

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