CPOs will become peers with the C-suite in terms of responsibility and influence © Morsa Images via Getty Images
CPOs will become peers with the C-suite in terms of responsibility and influence © Morsa Images via Getty Images

The top four skills CPOs need in a changing world

12 January 2022

Data-powered technologies, accelerated digitalisation and the evolution of supply chains have “significantly elevated” the role of procurement professionals, according to a report.

The report by executive recruitment firm Heidrick & Struggles (H&S) said: “The role of the chief procurement officer (CPO) across most sectors has been more fundamentally transformed over the past couple of years than many other leadership roles. And yet the transformation is far from complete.”

The report, Resetting the Role of the Chief Procurement Officer, involved interviews with 11 procurement leaders from companies including Unilever, BT and Vodafone. It said procurement leaders were at the “centre” of modern business models and had been “significantly elevated from a role that not long ago was primarily focused on process efficiencies, cost control, and compliance”. 

Covid-19 “perfectly illustrated” how extreme disruptions in the supply chain have forced procurement organisations to confront limitations in traditional operating models, the report argued, driving companies and procurement teams to adapt. 

Bertrand Conquéret, CPO at chemicals company Henkel, said: “While traditional skills will become less important for the CPO, they will still remain important for the procurement organisation as a whole.”

These are the skills CPOs should foster to be prepared for emerging trends:

1) Building relationships in complex ecosystems

A study by strategic management company Korber found 91% of businesses were unable to stay ahead of their supply chain complexities. Consequently, H&S said to succeed CPOs will have to “up their game” and immerse themselves in “the ever-growing maze” of relationship-building with suppliers, partners, customers, employees, investors, and stakeholders. 

Kai Nowosel, CPO at Accenture, said in the report: “The CPO is becoming more of a connector; the role is not about competition anymore but integration and collaboration. The role is more and more anchored in connecting networks and ecosystems rather than in running processes and competitive tenders.”

Hervé Le Faou, CPO at Heineken, said: “The CPO is evolving into a ‘chief value officer,’ a partner and co-leader to the CEO who is able to generate value through business partnering, digital and technology, and sustainability, which are new sources of profitable growth in a shift toward a future-proof business model.

“As a result, we see a new breed of procurement executive that is externally focused, able to bring the outside in and advise the CEO on how to win better.”

2) Embedding sustainability at the heart of procurement 

Research by consulting firm McKinsey & Company found two-thirds of the average company’s ESG footprint comes from its suppliers. “CPOs are therefore responsible for the largest proportion of their companies’ ESG performance,” H&S said. 

Conquéret argued: “CPOs also need to be sustainability leaders. Both roles require superior influencing and networking skills.” The report highlighted how companies including Diageo and Givaudan rolled supply chain, procurement, and sustainability into one executive role.

Cyril Pourrat, CPO at BT, said: “When it comes to ESG implementation, it is often down to procurement to make it happen with suppliers, which involves significant effort and resources.” 

Other than the environmental and social benefits ESG factors bring, there is also a strong business case for them – not considering sustainability factors can cost a business its reputation.

Angela Qu, CPO at Lufthansa Group, said: “Any unethical or unlawful shortcut will lead to long-term damage to a company’s reputation and market position.”

3) Leading on digital innovation

“Getting an edge on data use throughout an organisation can prove a critical competitive advantage,” the report argued. According to a recent Deloitte survey of CPOs, only 6% of organisations have fully deployed predictive analytics systems, and only 15% are scaling them.

Pourrat said CPOs do not need to focus on implementing specific e-sourcing tools, but instead move their businesses toward “new ways of working”.

This can be achieved by managing processes and connecting more deeply with the business through establishing procurement-originated tools in the company for wider use.

Jane Liang, CPO at British American Tobacco, added: “The CPO can become a key partner to many parts of the organisation by bringing digital innovation to the business – for example, in the form of platform buying and advanced data analytics.”

4) Providing strategic business insights 

The procurement leaders interviewed told H&S they predict CPOs will become increasingly embedded in the business and viewed as a peer to the C-suite executives in terms of responsibilities and influence.

Sebastian Bals, CPO at biopharma company UCB, said this was due to CPOs’ ability to have a “fully transversal view of the rest of the organisation”, which meant they were “geared to provide the best insights and services to all stakeholders, without any selfish ambition or agenda”.

Klaus Staubitzer, CPO and head of supply chain at Siemens, said Covid-19 had helped raise the profile of CPOs and “earned procurement a bigger license to act”. 

He said: “Now board members and business CEOs ask procurement for their view on the supply situation ahead of talking to investors.”

Consequently, CPOs should have the confidence and ability to influence at board level.

Ninian Wilson, CPO at Vodafone, said: “We see internally that boards are requesting sessions directly with the CPO on supply risk and are more concerned and involved in topics relating to the supply chain.

“Externally, we interact with a lot of new external stakeholders, such as NGOs, governments, regulators, and even prime ministers.” 

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