From the Archives (May, 18, 2010 but, with a few updates):

I was recently reminded of this article as I exchanged notes with the the CPO profiled in this article as he was discussing some of the interesting, new categories his team will be sourcing in 2013. He has recently moved cross country to take a new CPO position, the first in this large company’s history. As he builds a new procurement and supply chain function from the ground up, I am certain he will be continuing his practice “bringing a lieutenant” with him.

Bring a Lieutenant

I caught up with a top Chief Procurement Officer and friend the other day. This guy is probably a better manager than he is a CPO, and he’s a great CPO. He has a very natural style with his people and takes a very direct involvement in the development of his team’s on-going training and development. This year, one of his biggest initiatives is staff training (more than 100 FT staff). Some of his other big initiatives are sourcing-related, including some potential changes in his eSourcing program’s direction. In each of the past two years, the training has had a very specific theme and intent – collaboration is this year’s focus, specifically training staff on how to “work more difficult problems in a group dynamic.” He has also continued to make significant investments in process training.  If he can get approval from his internal PR team we’ll come back to some of the specifics around the design of this year’s training program/agenda, a few of the innovative sourcing initiatives that are now underway, and a revenue-generating program that his team recently launched in the near future [Publisher’s note: he did not get approval from his corporate PR team]. What I’ll focus on today is a somewhat off-handed remark that he made when talking about the relationship that he has with his manager.

In the course of our discussion, this CPO talked about the very good relationship that he has established with his manager, who is an EVP-Operations (Basically the corporations’ Chief Operating Officer). Certainly the relationship has been bolstered by consistent and strong departmental performance throughout the entirety of the CPO’s tenure, especially the “over-delivering” that happened in 2009. This CPO meets with the COO for a 60-90 minute one-on-one operations review every other week. The meeting has a baseline agenda but is fluid enough to include any specific circumstances that warrant inclusion. What struck me? The CPO told me that he makes it a habit to bring one of his staff lieutenants (or lower) to every operations review meeting with the COO. The lieutenant (or staffer) sits in for the entire meeting and gets to present or provide an update on at least one specific department initiative. I really like this idea. In the CPO’s mind, this practice accomplishes a few things:

• His lieutenants/staff get some visibility at the executive-level
• His lieutenants/staff get some experience presenting to an executive audience
• His lieutenants/staff get to hear what the CPO thinks is important
• His lieutenants/staff get to hear one executive present to another
• His lieutenants/staff get an understanding of what the company executives are focusing on, how they evaluate the procurement department
• With this exposure, his lieutenants/staff are more likely to give good feedback on how to improve operations
• Builds better relationships with his staff through direct interaction
• Helps the CPO better evaluate staff
• Over time, the COO gets a good cross-sectional view of the talent and make-up of the procurement department
• His lieutenants/staff are empowered and encouraged because they understand all of the above

I have participated (as panelist and moderator) in 4 separate panel discussions over the past 12 days and at least one CPO on each panel highlighted the challenges in hiring, training, and retaining top talent. In 2010 2013 (just as in 2010, 2011, & 2012), people remain a procurement department’s greatest constraint; but, also its greatest opportunity.

I personally believe that there are some very compelling trends that will make procurement a much more attractive place for employees within the enterprise and that many Chief Procurement Officers are already doing a good job with training. As superior talent begins to enter procurement, retention will be even tougher. I wonder how often procurement leaders think about talent retention in this light and focus on helping their talent gain the kind of experience and exposure that this simple exercise can yield? How many leaders have the self-confidence and wherewithal to bring their top lieutenants (and other staff) to meet with the generals on an operational review?

If you have one, the bimonthly ops meeting may not be the right forum in your enterprise, but there are probably many areas where your staff can benefit by participating. The CPO also benefits from these activities by developing a stronger team.

Tagged in: Chief Procurement Officer, Collaboration, CPO, People