Perhaps it is because I spent the first half of my career in finance as a consultant and banker and the second half of my career dedicated to procurement (or supply management) that I have been interested in troubled by fascinated by the relationship between the Chief Financial Officer and the Chief Procurement Officer and their respective departments. Perhaps I am fascinated by it because CPOs report into the CFO more than any other job role. Perhaps I am fascinated by it because the two executives (and groups) are seemingly well-aligned (cash management for example – as shown by the bullets in this article) and yet struggle to thrive as partners. Perhaps I am fascinated by it because so few organizations seem to have figured it out and I love trying to solve complex problems.
To be fair, over the past month I have been working on a CFO-CPO themed research report (that will publish in early January) and have interviewed a few CPOs that have “figured it out” with their CFO; I expect I will interview a few more who have also “figured it out” or have started to do so.
What’s interesting fascinating is that in many of these cases, “figuring it out” basically means that there is a clear and relatively unambiguous way that each group has agreed to use in the measurement of savings. To be certain, this is no small feat; but at the same time, I am not sure that this qualifies as truly “figuring it out.” Having alignment on measurements is not the same thing as having alignment on values. But it’s a start, since only a minority of CPOs today have alignment on measurements or anything else. Fascinating. ________________________________________________________________________________
I met with one CPO and “friend of the site” yesterday who’s been masterful in developing relationships across all areas of his company. He wonders how much of the CFO-CPO relationship is personality driven. Is the CFO a bean-counter or a “business or ops” person on rotation through finance? Is the CPO an outgoing, outspoken leader or some other kind? What are the implications? I wondered if what the CPO is charged with managing as defined by his/her region or industry plays a significant role in defining the relationship – for example is it easier to develop this relationship when direct materials comprise most of the spend? We both wondered about the business leaders and the roles that they can play in supporting each leader. Again, I say, fascinating. ______________________________________________________________________________
A few weeks ago, I had the opportunity to speak in front of 80 or so senior procurement and finance executives in the Kensington Gardens area of London (technically the City of Westminster, I think) at the home of the Finnish Ambassador to the UK. It was a lively crowd in a splendid venue on a surprisingly sunny October day. I began this article with the intention of discussing my presentation that day only to pause – I’m now deciding to wait until the report publishes. Rather than detail it here and now, I’ll provide a link to it for you to download (registration required). The presentation is provided by my host at the event, Sievo. I think the presentation works without a narrative for now – I like the visuals in this one and I hope you find it….. yes, you guessed it – fascinating.
Tagged in: CFO, Chief Procurement Officer, Collaboration, CPO, Finance
