Malcolm Harrison, CIPS group CEO, talks to SM about his first 18 months at the helm, and why his focus is on ensuring procurement is as professional as it can be
When Malcolm Harrison took on the role of group CEO of CIPS, challenges around global trade, security of supply and responsible business practices – not to mention Brexit – were all suggesting a disruptive and challenging period was facing the procurement profession. But with more than three decades in procurement, spanning a range of private and public sector roles, Harrison has already faced many similar scenarios. And his most important focus, he insists, is on ensuring procurement is as professional as it can be – and that the rest of business fully appreciates what the function can do for organisations and broader society.
Supply Management caught up with Harrison to ask what he’s learned in his first 18 months, what happens next – and what he really thinks about the future of procurement and global trade.
SM: With changes to the profession in recent years, what do you see as the key challenges for procurement practitioners?
MH: When I came into the profession 36 years ago, it really was about only two things: ensuring continuity and consistency of supply, and delivering value. Today, the big priorities are increasingly being set by important issues for society: sustainability, how can you be sure you are using scarce resources responsibly? Ethics, how can you be sure you have no fraud, corruption, no modern day slavery in your supply chain? And then there’s the whole security of supply agenda, changes in tariff arrangements and free trade agreements.
Can professionalising procurement address these issues? Well, it’s the essence of why CIPS exists. We are here to improve standards and capability, to the benefit of the profession, those who work in it, their organisations and the wider environment. The challenge is that the context is always changing.
And today we have the entire risk agenda. That’s what CEOs, CFOs and COOs are looking for more and more from procurement teams – to protect their organisations from risk in their supply chain. Many businesses have very deep and complex supply chains and you could have a problem of modern day slavery, for example, somewhere in there.
That’s why it’s important for procurement professionals to remain current, and CIPS Chartered Status is a way for members to show they are both relevant and responsible. It’s about staying on top of your game at a time when the game is changing at pace. So, it’s really encouraging for me to see what CIPS has done with that – it launched the Chartered Status to drive the professional skills and knowledge forward. And I’d like to get to a place where one day every fully qualified professional is Chartered.
Since your arrival, what CIPS activities excite you most?
There were certain key initiatives that were well underway before I arrived. The Global Standard was being reviewed and refreshed, the qualifications were being updated – both great changes. The updated qualifications make students aware of issues and legislation and give them the skills to influence and design policy and lead and monitor on compliance. Procurement needs to strategically position itself as a champion for change, promoting the highest standards of ethical practice for their organisations and supply chains. The revised content in the CIPS Global Standard provides an in-depth focus on a number of crucial subject areas in the profession, such as modern slavery, sustainability and bribery, corruption and fraud.
In a world where everything is connected, understanding the impact of our sourcing and buying decisions has never been so important. Ethical and responsible procurement is now an economic and reputational imperative, and in some contexts a legal requirement too. The introduction of modern slavery legislation in Australia and the focus on carbon throughout New Zealand, for instance, is providing an opportunity for procurement and supply to show these issues sit firmly with us.
We’re also working on our membership offering and thinking about the different stages of a professional’s career to ensure we remain relevant to members as their professional partner for life.
Where has CIPS been having an impact most recently?
Through the CIPS for Business division, we’ve got involved in some interesting and different initiatives that are helping us to have an impact across the US. With a grant from the Bill and Melinda Gates Foundation, we are working with three different countries in Africa to help improve procurement practices in their healthcare systems, and increase skills and capability in the management of critical products and services. This is in areas where vital medical supplies often don’t reach the people who are most vulnerable, with shocking consequences. So this work is really exciting. But there’s an enormous amount more to do.
So what does good procurement leadership look like, and how does a CPO attract the attention of the CEO?
I’ve worked in CPO roles and leadership roles where I’ve been responsible for procurement at the top table and I would say that it’s not whether you’re at the table or not, it’s your ability to influence an organisation. It’s about understanding the business and your priorities, as well as the skillset and that mixture of technical and soft skills.
Breadth is important in procurement and supply but is that breadth of business type, culture, geography or function? I don’t believe there is any one perfect career path – what’s right for one individual may not be right for another.
The CPOs on the CIPS Procurement Power List are demonstrating the impact they have within their organisations, whether that is enabling business growth, innovating through digital disruption, embracing sustainability or improving wider communities. They understand their organisations and strategic goals and how they can bring value to the table. This is the kind of leadership that will drive the profession forward and stretch the boundaries, thinking business first and function second.
Do you think CEOs recognise procurement’s current capabilities and responsibilities?
Oh, definitely. When you think about what many senior leaders, businesses and organisations are looking for from their procurement and supply team, it’s not only about delivering value or ensuring continuity of supply. It’s about managing risk. Of course CEOs are not happy if you don’t hit your savings targets, but it’s much worse if slavery is found – and publicised – in your supply chain.
Rooting out slavery is not an easy task, so how does CIPS – and indeed its members – go about tackling this?
Every procurement professional must ensure they are informed of exactly what is happening throughout their supply chains. Modern slavery, sustainability – the ethics agenda is now part of every business decision we make daily, and it needs transparency right through the supply chain. Ethics has to be second nature. By incorporating the ethics test into the CIPS Chartered Status, members can demonstrate that they remain current in their work, and own that space.
CIPS is also doing a lot of work with individuals and organisations, with the UK Cabinet Office and in Australia since the introduction of their Modern Slavery act, to put in place the right practices to ensure procurement is addressing this horrendous crime right through the supply chain.
The most recent CIPS/Hays Salary survey revealed a concern about the talent pipeline. Should CPOs focus on resolving this?
I’d love to have more high-quality people coming into the profession. Do we have a massive problem with the quality today? No. Could we be doing better? Yes, of course. And while 56% of respondents are still looking for talent to help shape their business goals, procurement professionals should continue to develop and improve their own skills and abilities. That way they will continue to be the most effective and most sought-after – and that will help to develop the skills needed in the profession.
Attracting higher calibre people is about communication and marketing the profession, connecting and aligning with some of the challenges that are important to society – and that comes back to ethics, sustainability, use of plastics, consumer values. It gives us a chance to portray the profession in a relevant and really attractive way. The uptake we’ve seen in recent years on the CIPS apprenticeship programmes in the UK is encouraging news that more young people are seeking procurement as a career choice.
The survey also showed an increasing gap between the pay of MCIPS and non-MCIPS procurement practitioners.
It should come as no surprise that MCIPS professionals are earning more than their non-qualified colleagues – 15% higher – and are the first choice for recruiters in many sectors. That’s a clear indication of the value of professional development and staying relevant. They can take heart that the work they do makes a difference and they should be confident in the knowledge that the professional continues to be in the ascendancy.
What procurement technology excites you?
Well, there is a huge amount of hype out there. But there are some good examples too. [Global supply chain director] Ninian Wilson [on this year’s Procurement Power List] and Vodafone, for example, have been applying some really leading-edge solutions to exactly the right areas – getting the right data, controlling requisitions and purchase orders, paying suppliers on time.
What excites me about tech is how you bring efficiency to routine processes. Where people are essentially just turning the handle, how can you take out those repetitive tasks where mistakes can be made. Also, where you get better information to make better decisions in terms of forecasting, greater transparency or which suppliers exist in the marketplace? This is where you get real return on your investment.
Are geopolitical risks threatening the future of global supply chains?
When you start talking about global trade and trade barriers – be they tariff barriers or non-tariff barriers – that’s a concern to anyone who is used to operating in free markets. Most professionals would prefer a barrier-free environment because it enables them to really concentrate on finding the absolute best supplier with the most innovative approach and the best cost. But I believe that globalisation will continue, with an increasing reliance on the application of best professional practices. In many ways it’s all about local implementation of global standards.
And what about Brexit – is procurement prepared?
With all the uncertainty it’s hard to be prepared for what’s ahead. The CIPS Brexit reports show that over a quarter of respondents felt unable to prepare for Brexit. But whatever happens, Britain must keep investing in the skills, relationships and technology to take its new place in Europe and beyond.
However, there’s no doubt that changes in a supply chain will mean professionals in procurement and supply will be more in demand because you will have all these new complexities. And if you end up with a no-deal Brexit, the demand on the profession will be huge – people will have to move quickly to re-source and you may find that you don’t have any suppliers of a certain item in the UK.
So, what’s on the horizon?
There’s no doubt that CIPS has grown a lot in the last five to 10 years. We may be based in the UK but our activities are increasingly not just in the UK – working with governments, organisations, international companies and philanthropic bodies. I’ve visited members across the world, all at different stages of maturity, and the challenge for CIPS is understanding where people are on their journey, the nuances and challenges in their regions and how we support them. There are opportunities everywhere and the US has been a particular focus for us, where we have been invited to assist in the development of the profession as well as supporting large organisations. We’ve seen growth in all areas and especially the Middle East.
These are exciting times for the profession and for CIPS and we must both adapt to seize the opportunities ahead.