This blog post is the first in a series of articles covering how new CPOs can be successful – By Jordan Jansen
Congratulations, you find yourself in a new role leading a procurement organization. Whether you are a career-long procurement and supply chain professional, or are from finance or a business unit discipline, this can seem like a daunting opportunity and you may be asking yourself, “where do I begin”?
Your C-Suite peers are looking at this role to help transform the business during the next 3+ years. You have a charter to act big and increase the company’s performance. Most likely, this means you need to inspire other organizations and teams within the company to move in different directions. Planning around organizational resistance, implementing new strategies, looking at data in different ways, inspiring others to do things differently—these are all part of your new day job. Given that the average tenure of a CPO is ~4 years, you are going to feel like you are in the hot seat from day one. You’ll need to drive meaningful impact, process improvements, cost savings, and increased business performance.
Your procurement organization plays an integral role in establishing and executing strategic plans that meet the opportunities and challenges presented by external market conditions and the strategic direction of the company.
What does this mean for your role as the new CPO? It suggests that you must begin to develop a plan that has immediate impact with lasting initiatives for sustainable change as part of the transformation your company is focused on. Regardless of how you came to this position, the first 90 days can be summed up as follows: understand, manage, and develop the way forward.
Understand – the business culture, its requirements, and stakeholders.
Understanding your businesses’ culture may be a quick reality check if you have moved up the ranks, or it might be a more in-depth assessment if you are coming from the outside. Knowing and aligning all the elements and players on the playing field before you begin to drive change is critical to understanding the environment and your business partner’s priorities.
In the case of an internally promoted CPO, you may think that you understand the business and culture. However, depending on your level within the organization, your perspective can be very different. You need to be aware that your stakeholders’ perspectives will change when dealing with you as the decision-maker and influencer in the C-Suite versus when you were in a more junior role. Be open and prepared to adjust any preconceived perspectives; only then can you determine how you will manage the desired change you will be pushing both up and down the business.
Understanding the expectations of your new CPO role is critical. Reinforce or assess very quickly the elements that drive success and what your external business partners need for support. Tailoring your organization’s structure and prioritizing procurement and sourcing initiatives for initial quick wins in your first 90 days will build the respect and confidence of your business unit peers for deeper more transformative opportunities in the future. Collaboration with your internal business partners is a key part of this. You may find that there is a disconnect between the executive team’s expectation of your role and that of your business partners. Quickly bridge these gaps to build integration points between your stakeholder’s agenda/priorities and any expectations of transformational speed that the executive team has.
Your stakeholders will generally fall into three buckets: Your immediate team, broader business unit partners, and the external market. Understanding each of these stakeholders’ priorities will enable you to position yourself and your procurement organization as a true business partner.
The above activity can take place while you are working to understand the organizational framework and players. Concurrently, you should build out the quantitative data and analytics that will begin to craft your go forward procurement and sourcing strategy and initiatives, as well as provide insights into how lacking or compliant the company’s spend management policies are. We often refer to building and analyzing the spend profile, executing of sourcing strategies or events, and developing compliant buying channels as “finding the money, getting the money, and making it stick”. By simultaneously understanding your stakeholders’ priorities, you will be able to tailor your early strategy as a true business partner and avoid your team being labeled as the “policy police”.
In helping you understand the maturity of your organization and better position it for success, we will take deeper dives in our next posts on how you can Manage and Develop your way forward to a new CPO procurement strategy within your first 90 days.