The traditional procurement skills are no longer enough to stand out as a successful leader. To effect lasting transformations, today’s CPOs will need an enhanced set of competencies
The role of the chief procurement officer within a business has changed. Gone are the days when CPOs focused solely on cost control and timely purchases of goods and services: now, more companies are recognising the wider value of these leaders and the procurement function as a whole.
Geopolitical developments, in addition to a shift in business priorities, have contributed to transforming the role of the CPO in today’s business climate. As a result, more companies are considering how procurement can be used to achieve their ESG objectives, for example, and procurement is being viewed as a driver to achieve business growth, sustainability and resilience.
This has meant more CPOs now have a seat at the table, empowering them to transform their business and giving them more of a say in where budgets should be spent. To ensure success, CPOs need to have the right balance of vision, purpose and collaboration while remaining flexible and open to driving forward business transformation.
Below, I have outlined the top five core capabilities CPOs will need to overcome today’s challenges and bring about lasting change within a business:
1. A willingness to take risks and disrupt the status quo
Modern corporate leadership is largely about driving change. While procurement leaders have traditionally focused on establishing and maintaining disciplines and methods designed around cost management and compliance, they are increasingly becoming champions of breakthrough innovation and business transformation.
The nature of innovation involves experimentation, calculated risk-taking, and uncertainty, so new approaches should be viewed as learning experiences and any unexpected setbacks seen as stepping-stones to ultimately positive outcomes, including company and personal leadership growth.
To help drive this positive change, transformative CPOs are partnering with start-ups, thought leaders, networks, suppliers, advocacy groups and internal stakeholders which can act as catalysts for innovation and demonstrate how existing models and processes are no longer the only, or the best, way to operate.
2. Agility and adaptability
To remain competitive in volatile economic environments, companies must evolve and be able to pivot quickly. Holding onto outdated technologies and manual processes can result in businesses being left behind. Leading CPOs have recognised the need to develop best-of-breed digital ecosystems which allow multiple innovative technologies to work together and deliver superior user experiences for both their teams and business stakeholders.
Procurement leaders need to help the function become more agile and adaptable, enabling it to embrace ongoing uncertainty at the heart of business and see each challenge as an opportunity to revisit models and processes, increasing the value it brings to both the top and bottom lines.
3. Build new types of teams
Successful CPOs ensure a wide range of voices are heard across their teams, with people from different backgrounds bringing fresh perspectives, insights and experiences to the table. Rather than hiring managers with many years of procurement domain experience in various category roles, transformative leaders are actively seeking to recruit varied new talent. This new talent has well-developed business or functional expertise, exceptional digital literacy, sales or relationship management backgrounds, or a consultancy background with strong, creative problem-solving skills.
Further, they must be able to unite these diverse people into an effective and successful unit. And, leading by example, these CPOs are demonstrating that they have the ability to challenge convention and seek new approaches to solving procurement’s most pressing challenges during uncertain times.
4. Redefining procurement’s role
Increasingly, procurement leaders are being asked to help other teams across the business with complex supply challenges. Therefore, understanding the roles, goals and challenges of colleagues in IT, HR, finance, or legal enables procurement to partner with those functions, empowering them to drive their own digital transformations.
Indeed, the career paths of tomorrow’s CPOs are likely to involve working in different areas of the business to develop relationship building, account management expertise, and even the sales and change management skills that are needed to fulfil the broader mission of the procurement function. They are also redefining how value is measured across the function to align with their vision for the future of procurement – the new scorecard includes factors such as growth enablement, increased social inclusion, sustainability and development of new products.
5. Aligning resources to corporate priorities
One of the biggest challenges for CPOs is that their functions need to take on a more strategic role, rather than focusing primarily on day-to-day transactional procurement activities. Procurement leaders are focusing on the opportunities and areas that will have the greatest impact on the entire organisation, whether leading the way on stakeholder experience, digital transformation or driving the ESG agenda through responsible and transparent business practices, and sustainable operations.
To help guide this more strategic thinking, leading CPOs are using new technologies that free up their talent to focus on the more human aspects of procurement, such as relationship management, supplier innovation and business partner problem solving, while at the same time exceeding the stakeholder expectations created by the consumerisation of enterprise buying.
Overall, it’s the adaptability, agility and openness to new and developing technology and ideas, willingness to take risks and try new things that underpin what it is that makes this new generation of CPOs successful.
☛ Keith Hausmann is chief revenue officer at B2B marketplace and platform, Globality