What Your CEO Wants to Hear

CIPS 26 July 2019

Procurish | pro 'koor ish | noun: the jargon of procurement: He lost me when he lapsed into procurish, instead of telling me how the purchase was going to give our company a competitive edge.

What Your CEO Wants to Hear

OK. You won’t find “procurish” in your Webster’s dictionary, but I expect you know exactly what it is because you use it every day. It’s the talk of cost analyses, market hedging, contract compliance and RFPs. It’s the stuff we might have learned in college, but mostly by just doing our jobs in purchasing, procurement or whatever name they have given our department. Perhaps you have done well up to now based on your fluency in “procurish” and the actual procurement skills to back it up. And with the economy up and employers slightly desperate, that might be enough to get by for now. But I’ll bet you have already felt the pace of change accelerating, the basic skills of making a purchase and managing contracts becoming automated and the collaborations with other parts of the business more demanding. 

Welcome to the future.

While I was conducting a seminar recently the skill gap that was most obvious among the class of supply managers was the ability to look at the big picture and to describe how their work was contributing to the overall business. We did an elevator speech exercise with the group where we asked them to succinctly answer the question posed by their CEO, “How are you helping the business?” It was horrible for most of them, but a powerful learning experience as well because they saw how you have to be able to see from a high level and communicate your views concisely, yet with specifics.

According to the report, CIPS Supply Century, which looked at the future of procurement and supply management, “Professionals will need to be more polished, creative, influential, persuasive, visionary and strategic and exhibit more general management capability and leadership traits for a new type of business relationship.” Not much room for speaking “procurish” there!

That report also identified a significant list of issues beyond cost savings that procurement professionals are being asked to address. Among them: managing risk, finding new business, generating social value, discovering innovation, building relationships, maintaining integrity and sourcing based on value over cost. To manage those issues requires both analytical and people skills: capturing and sharing information, engaging stakeholders, building procurement capacity, managing major suppliers and delivering business benefits.

Many sourcing decisions now are based on a need to solve a problem that may have significant complexity. People across divisions within an organization may need to coordinate work with one or more external partners. Communication and other interpersonal skills are often essential to make those cross-functional teams work. Team members who are willing and able to learn from each other also increase their chances of success. Often, out of that pool of common knowledge comes the consensus needed to move forward.

So, when an executive asks me, “who should I hire?” I tell them to look for qualifications beyond procurement skills. Look for someone extremely curious, emotional intelligent and understands business. Find someone who is asking “how is it made, what happens here, how can we increase the value of that?” If you can find those qualities, it’s a straightforward task to teach them how to analyze costs, write a contract and negotiate terms.

In the next five years artificial intelligence software will be able to search the Internet, find suppliers, build RFIs or even RFPs, and make recommendations on sourcing. The supply chain of the future is going to be linked, with integrated data systems, so supply managers are really going to have to be able to manage innovations and the value chain. It will require a high degree of collaboration with suppliers through every tier to take costs out and put value in. The work won’t be buying, it will be architecting and managing an entire supply chain. That will require great communication and people skills to succeed.

CIPS plays an important role in all this, first of all by maintaining the CIPS Global Standard for Procurement and Supply. It has researched the work and identified the skills needed at every level of procurement or supply professional. It also updates those standards with annual research to track how jobs and the skills needed to do them are changing.

CIPS certifications are also globally recognized at a university-degree level. There are a number of ways to get them – with a combination of online modules and tests or a structured process within an organization that involves projects that bring a return to the organization. And finally, CIPS members have access to an excellent knowledge center that has research it has done or sponsored through partner organizations.

All this underscores the fact that a typical ad hoc training effort is not likely to generate long-term results. An effective professional development program should be customized for each person. It should assess your current skills and what your goals are and the needs of your organization are likely to be in one, three or even five years. Based on that, you can build your unique professional development pathway. CIPS has both the Global Standard, which identifies skills needed for professionals at different levels within the organization – and the certification process to allow people to grow those skills. It’s a powerful combination.

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