Are you a Dali, a Turing or an Austen? ©Getty Images
Are you a Dali, a Turing or an Austen? ©Getty Images

What makes a great CPO?

6 October 2017

SM put 45 CPOs through a psychometric assessment to find out. The results might surprise you…

There are more than 96,000 procurement and supply professionals in the UK alone, according to CIPS estimates. For the ambitious among this large group, there exist only a handful of strategic CPO roles to compete for. So what helps someone get there? Is there a secret sauce of competencies, skills and behaviours that the best of the best have in common? It’s something SM set out to explore in a first-of-its-kind study to assess the psychometric make-up of forward-thinking procurement leaders.

We handpicked 45 CPOs from large, global organisations, including FTSE-100 listed multinationals, government departments and high street brands, and put them through the Great People Inside Full Spectrum, a completely new assessment platform just launched in the UK by psychometric assessment company Great People Inside (GPI).

What the results show is this new school of CPOs, those pushing the profession forward, are as far away from the stereotypical or more traditional idea of procurement as it is possible to be. In the words of one participant: “This study speaks to a particular engaging and partnering character profile that I have seen being pretty successful in the procurement world in more recent times. The old school was definitely a bit crustier!”

Lucy Harding, who leads the procurement and supply chain practice at executive search firm Odgers Berndtson, and so is responsible for filling some of the biggest jobs in the industry, adds: “You wouldn’t have these results if you had done the study 10 years ago. It shows the evolution of the function.”

In short, the results show that the ideal profile for a CPO is someone great with numbers, brilliant at understanding and expressing ideas, as extroverted as a salesperson, better with words than a marketer, and with an artistic bent.

Surprised? Paul Bestford, CPO of John Lewis and one of the participants, says he would like to show these results to other functional leads to dispel some of the myths around procurement. “It would help get past that stereotype of procurement as the hard nosed negotiator and have a mature conversation about the skills that exist,” he says.

Psychometric testing

The Great People Inside Full Spectrum assessment measures the dimensions considered as most relevant to a senior role. These dimensions are categorised as: cognitive elements (how comfortable someone is working with various cognitive processes); behavioural traits (traits one is born with, which tend to be the default position in times of stress); and occupational interests (activities someone is most inspired and motivated by).

Each dimension is measured on a scale of 1 – 10. When a profile is created, the minimum width of a profile is three segments (ie. 6 – 8, 8 – 10), although it can be wider. The narrower the width, the more relevant that dimension. In this study, by looking at the percentage of respondents who fell into a three-wide band for each dimension, there was a significant correlation between the results across several key dimensions.

Coming up, you’ll find all the results, in order of significance. So read on to see whether you agree if it takes the following characteristics to get to the top in procurement…

Reasoning

Reasoning is a cognitive trait, defined as “understanding ideas expressed by using reasoning and logic”. Essentially, that means the degree to which you can use and interpret data, both numerical and verbal, in writing and orally. The higher the score, the more capable the person is of interpreting complex information and reading between the lines.

The CPOs who took part in SM’s test score well here: 87% scored moderate to high. In comparison to the average person, that is significant. If you tested a random selection of the working population, only four out of 10 people would score this highly, but almost nine in 10 CPOs achieved it. This means, says Martin Goodwill, CEO of Great People Inside UK, that “reasoning is the most essential trait for any budding CPO”.

Bilal Shaykh, CPO of Centrica, says reasoning is one of the key traits he would cite as critical in helping him get to the top. “It’s spot on,” he says, but adds that he worries slightly for the next generation, as many of the up and coming procurement professionals he sees are not as strong on reasoning or numerical skills as he would expect. “It might be why so many people don’t get to where they want to go,” he says.

Working with numbers

Another cognitive trait – and perhaps the least surprising find – is that, on the whole, our CPOs scored exceptionally highly when it came to dealing with numbers. As participant Joerg Strauss, global head of procurement and knowledge operations at law firm Freshfields Bruckhaus Deringer says: “Numbers are where you fight the battle in procurement, you need to know your percentages, your margins…”

In this study, working with numbers is defined as the ability to understand numerical expressions of ideas and correctly work out results from numerical problems. It’s less about doing calculations and more about being able to interpret, often quickly, what numbers are telling you and making sound decisions based on that information. Bread and butter stuff for any CPO, perhaps, and 82% of those involved scored highly (between eight and 10 on the 1-10 scale). Only 16% of the average working population would score so highly. “This high score shows this is a key development area for aspiring CPOs,” says Goodwill.

However, eight of those who took part scored lower. This shows it is possible to get to the top with less natural ability in this area, explains Goodwill, but adds that “you may have to work harder to find a company where there is a natural fit”. 

But this may not be the case for much longer, warns Harding from Odgers Berndtson, as more executive search processes now involve psychometric testing. “The rise in assessments like this means it will be increasingly hard to become a CPO without those numerical skills, so don’t be complacent,” she cautions.

Objectivity

Objectivity is a behavioural trait, defined as a tendency to prefer the use of logic more often than intuition. High scoring individuals make decisions based on fact and logic; low scoring individuals make decisions based on intuition and emotion. Our CPOs sit towards the higher end of the scale, with 82% scoring 7-9 – almost three times higher than you could expect to find in the working population.

But there is a potential downside to this quality, says Goodwill. “This could suggest that these CPOs are not as entrepreneurial as we might have imagined,” he explains. “A higher degree of intuitive decision-making is more likely to characterise an entrepreneur – and CEO.”

Harding says that to rise up the executive scale, CPOs should focus on their ability to be more intuitive and think on their feet. “Less intuitive decision making going on will limit your progression outside the function,” she says. “Intuition doesn’t mean being reckless; it’s having the confidence to base things on the experiences you’ve had.”

“As a functional expert you can make a decision based on facts and data but at a senior level your ability to do that reduces because of the amount of information you need to consider,” adds Bestford. “I’ve seen people struggle to step up to senior roles because they haven’t felt confident in their judgement.”

Working with words

It turns out verbal ability – cognitive – is only very marginally less important than numerical ability and reasoning for CPOs. Three-quarters of those who took part scored in the high 8-10 range, where you will only find 16% of the working population. These CPOs work at a higher level with words than a group of senior marketers who also completed the GPI assessment (maybe don’t tell your colleagues in marketing that…). “Good communication skills are key to success,” says CIPS director Cath Hill. “Great CPOs don’t make decisions in isolation. They take people with them and lead from the front. They influence.”

“Senior people in procurement have to be extremely articulate,” agrees Bestford. “To be effective you need to be skilled at selling a message – and listening. At a senior level, it is all about those internal relationships and influencing is highly dependent on [verbal ability].”

Participant Juliet Sotnick, CPO of Babcock International, adds: “Working at CPO level you have to work with other senior people with different views. You have to make your voice heard in a constructive way.”

Emotional intelligence

Cognitive traits can be trained; behavioural ones are more difficult to train. They are inherent in each of us and are the default we fall back on, unconsciously, when under stress. So, what behavioural traits – aside from objectivity – make up a stellar CPO?

The first, potentially stereotype-busting one is extraversion, defined here as: A tendency to trust and enjoy interacting with people. More than eight in 10 of our CPOs scored at the top end of the scale (7-10). This makes them reminiscent of sales people, who are also expected to sit here, says Goodwill. 

“Sales people are typically perfect to work in procurement, because they are all about influencing and getting their ideas across, while also listening and aligning their message to what they are hearing,” says Sotnick. “We [procurement] have to be good sales people, selling ourselves internally,” adds Shaykh.

Our CPOs scored highly on conscientiousness (the tendency to be thorough, organised and dependable) and stability (the tendency to be confident, to display a calm and steady presence and effectively manage difficult situations). They tend towards being open to experience (curious) and are resilient and flexible. And most of them scored highly on the agreeability scale, being more friendly and compassionate than competitive and self-focused. Hardly the hard-nosed negotiator…

For Strauss, all these behavioural traits add up to one critical quality: emotional intelligence (EI). “The profession has changed so much; it’s not all about negotiation any more,” he says. “You have to get people together, fitting square pegs into round holes. That’s agreeability. It’s about challenging and aligning your colleagues, especially when working internationally, as you need to understand it’s different in Washington to Paris to Tokyo. You need EI to get your people aligned before you go to your suppliers.”

As procurement rises up the organisational hierarchy, CPOs often have to interact with the CEO and the board, says Strauss. This increases the importance of having these behavioural traits. “You have to be able to talk more on a strategic level.”

Hill agrees. “What distinguishes the best leaders from the majority is their level of emotional intelligence, and procurement leaders are no different,” she says. “EI is not a nice to have. It’s a must have. High EI is the biggest predictor of performance in the workplace and the strongest driver of leadership and personal excellence.”

Occupational interests

A further element of the Great People Inside Full Spectrum was based on research developed by American psychologist John Holland, which describes how every job is made up of six ‘occupational interests’ in different proportions. These are:

  • Enterprising: Energetic and confident individuals who are comfortable expressing themselves and persuading others to work with them.
  • Social: Individuals who enjoy helping others and building relationships. They are cooperative and patient with others.
  • Artistic: Creative individuals who tend to be more expressive. They are typically comfortable working with ideas and concepts.
  • Conventional: Conservative thinkers who appreciate order and detail in their pursuits and activities.
  • Realistic: Individuals who enjoy working with things more than people. They tend to be practical and pursue activities where they work with their hands.
  • Investigative: People who enjoy working on practical tasks that are often technical in nature. They tend to be good investigators and observers.

 

So which top three did our CPOs fall into? In order of preference they are:

1) enterprising; 2) social; and 3) artistic.

Again, hardly the process-driven spreadsheet jockey some might assume…

The future CPO

Our study, detailed as it was, only scratched the surface of the range of procurement professionals out there. “While there’s no doubt that your path to a top job would appear to be smoother if you share the traits of the majority of our respondents, there remains a significant minority who don’t share them but are still, by any standards, hugely successful,” Goodwill caveats. “Procurement is a broad church. It’s about finding the right pew.”

But despite that, there is no doubt the business world is changing rapidly, and with it the role of the CPO. “It will continue to evolve, and faster than it has before,” says Sotnick. “Those skills [that come out in this study] are robust enough for now and in the future. Being a stereotypical procurement person doesn’t lead to success in [today’s business] environment in leading companies. The more stereotypical skills would mean you are [only likely to be] successful in a smaller or more traditional organisation.”

Going into any executive role means taking a leap beyond technical expertise, and displaying the kind of qualities uncovered by this study will help make that easier. It is executive competencies and strategic thinking, not just operational excellence, that make the difference at this level. As Bestford says: “I’m a far better CPO than I ever was a buyer.” Strauss concurs: “I don’t need to be the best person at procurement. I need to be the best person to lead procurement.”

The CPOs SM spoke to off the back of this study, on and off the record, agreed that the characteristics that stood out matter, but also raised a number of important areas we did not measure on this occasion. For example, the importance of digital awareness and global experience, not just visiting but working and living in different geographies.

“As companies grow and scale, procurement people need to be more agile,” says Sotnick. “Those influencing skills and openness to experience will become more important in an environment where we are competing for resources.” That means, she believes, “opening up and getting people from different backgrounds into teams”.

The CPO role, says Strauss, is rising in profile as the value strategic procurement can add becomes clearer. CEOs are increasingly interested in their CPO. And as Harding says: “They don’t want that old-school profile of procurement.”

Is it time for business to forget the traditional procurement image, banging fists on the table and squeezing every last penny from suppliers, in favour of a more modern, collaborative and emotionally intelligent procurement leader? After all, given these findings, who wouldn’t want to be a CPO?

CPO to CEO: the road less travelled

So, you’ve reached the top spot – that coveted CPO position. What comes next? And which role is most suitable, based on the qualities demonstrated by our sample? Freshfields’ Strauss believes the CPO role shouldn’t be “the end station”, something he is embodying himself, as he is moving into a non-procurement leadership role – head of pricing for Europe – shortly.

According to SM’s study and GPI’s data, the cognitive dimensions displayed by the CPOs most closely mirror that of CFOs. CPO to CEO is not an obvious comparison. “CEOs need to be more entrepreneurial and prepared to act more intuitively,” says GPI’s Goodwill.

Lucy Harding from Odgers Berndtson says it is positive that the “traits the modern CPO demonstrates are aligned to CFO, which is a board level role”. She cites Apple’s Tim Cook, who came up from procurement to claim one of the biggest leadership roles around, as a role model.

“It’s good news that CPOs are similar to CFOs, as CFOs are perceived as board operators,” she says. “What does that mean for a CPO who wants to become CEO? You need to get more general management experience to take you closer to the board. Be strategic about your career and target a board level role that is broader than your function.”

LATEST
JOBS
West Sussex
£85K + 20% bonus + car allowance + pension + health
Beaumont Select
Cambridge
c£30-£35K p.a. + benefits
GPA Procurement
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE