Suppliers’ CEO choice not an issue for procurement professionals

Gurjit Degun
4 December 2013

Three quarters of procurement professionals say a supplier’s choice of CEO would not influence their contracting plans, according to the latest SM100 poll.

This month 100 buyers were asked: “Would you change your supplier if you didn’t like the company’s choice of CEO?” Some 75 per cent said it wouldn’t affect their decisions, with the remaining quarter saying they would.

It follows news that McDonald’s has ended its contract with Heinz for its ketchup after 40 years. A spokesperson for the fast-food company told SM management changes at the condiment manufacturer had prompted the switch of vendor. Heinz is currently led by Bernardo Hees, former chief executive of Burger King.

Responding to the poll, Cristian Martin, procurement and contracts officer at the Commonwealth Secretariat, said: “It is unlikely you have to deal with the CEO on a daily basis. If it’s the person you are dealing with on a regular basis that you have a problem with, I have previously asked for another person to be assigned to the account.

“If the organisation or CEO has done something that does not match my organisation’s ethical viewpoint then I would switch for those reasons.”

Andy Foulis, head of shared services at Highlands and Islands Enterprise, added: “Such a change should have little or no impact on the supplier/buyer relationship if it is well founded. Contract and supplier management would, I hope, be sufficiently robust so as not to be diminished or challenged by changes at CEO level.”

Of the 25 per cent who said they would change their supplier if they did not like the company’s choice of CEO, Tom Woodham of Crimson & Co said relationships between management teams is vital.

“If it is a key supplier then the relationship between the two senior management teams is crucial,” he said. “It is less about a personal preference and more about having the right relationship to ensure productive collaboration.”

Bill Fyfe, head of procurement at the National Trust for Scotland, added: “All decisions to chose a supplier should be based on data, but any organisation that is looking to be best in class cannot do it on their own so having a supplier relationship where both parties have the same aspirations and attitude would be key in achieving that.”

Matthew Carr, director of subcontracting and indirects for UK&I procurement at Atos, said that press and media coverage around the company and key personnel would also put him off choosing a particular supplier.

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