September is Sourcing month on CPO Rising and so, we continue today with Part Two in a series that considers the question posed in the article title (Part One is here).
I should note that we are considering the question, but not answering it because there does not appear to be one right answer – what works for one Chief Procurement Officer or procurement department may not work for another. Consider: the organizational design of a procurement department, who its leaders are, how it’s staffed, its industry, how it sits in the enterprise, how engaged it is with stakeholders, etc., all combine to make the needs of one procurement department potentially very different for similar job titles and roles.
A great analogy for why there is no single answer is the NFL Draft where the 32 teams select the top college
graduates players to join their squads and try to make their team. Before the draft, each team has a list of the top players it wants to draft and the position needs that it wants to fill based upon its current and long-term plans. Like the hiring process in procurement, draft day can set a team up for long-term success or it can help a team implode. Each team is playing football – obviously – but there are 32 distinct lists of top players and position needs that are prioritized based on the 32 different rosters, coaches, offensive and defensive schemes, and draft ideologies (among other reasons). What works for one team, may not work for another.
Two CPOs, Two Worldviews
Maybe you’re like this CPO (on the Rise) who aggressively pursues sourcing expertise. Says this CPO in the financial services industry, “We have gone out of our way to hire effectiveness. We looked for people with prior consulting experience, good analytical skills, and a strong client focus – people who can manage projects and present well.” He continues, “Recruiting to achieve the right technical skills is less challenging than finding the right soft skills.” He has worked to organize his department so that roughly one-third are focused on transactional areas while two-thirds of the team are focused on strategic activities. So, this is a CPO who is very focused on strategic sourcing and values business skills more than sourcing skills.
Take another “friend of the site,” Eric Beylier, Chief Procurement Officer at Tetra Technologies who invests his time in the development of job descriptions and commensurate compensation packages, because “if you really know what you’re looking for, you’re much more likely to find it.” Like the CPO above, Eric is very focused on strategic sourcing; but, he wants sourcing skills and does not want to explain strategic sourcing to anyone he hires.
Procurement Director Listing
Some time ago, I had spoken to an international recruiter who was looking for a new CPO and 8 procurement directors; below are some details on the position:
High-level description: The Regional Procurement Manager (the job is technically a manager title, but it looks and pays like a Directorship) is accountable for performing the responsibilities, modeling the behaviors and maintaining the technical competencies in his or her capacity as a member of the……….. Accountability means being answerable for managing quality, risks, results, institutional initiatives and compliance with all ENTERPRISE NAME’s policies and procedures.
Main competency categories:
- Business Management (including strategy, operations, and quality control)
- People/Talent Management
- Resource Management
- Knowledge Management
Business or Sourcing?
After a lengthy discussion with the lead recruiter and a detailed review of this position listing, it is clear that this enterprise and recruiter are looking for someone who knows sourcing and procurement processes but can lead, manage, and administer a team and serve as an executive presence in interactions with an extremely diverse set of stakeholders. To be fair, this is one anecdotal example of many potential listings that I could have used – I could easily have selected an open job requisition that is focused on hiring sourcing skills.
Becoming a CPO
To reiterate, the procurement position above is a senior one and maps to a director or senior director more than a manager. Accordingly, this group’s approach to hiring a procurement leader is similar to what we found in Ardent Partners’ research report focused on what it takes to “become a Chief Procurement Officer.” This report found that “there are a common set of operating responsibilities and skills that are shared by a majority of CPOs in place today. Interestingly, while the path to a procurement leadership role is often enabled by technical and functional prowess, it is a CPO’s leadership, communication, and relationship-building skills coupled with a clear understanding of business fundamentals and an ability to offer insight in support of the development of business strategy that enables them to thrive and succeed in the role.“
Business or Sourcing?
So, the trend among current CPOs is that their sourcing skills/experience are what gain them entry to the CPO role in the first place; but, it is their business skills that ultimately determine their success in the role. Nonetheless, what each CPO values most today, like the 32 NFL coaches, remains widely varied.There are arguments for why procurement pros should emphasize one area over the other and there are arguments why both should be highlighted. This is certainly something to consider the next time you revamp your resume (which I believe should be done at least every 18 months, if not every 12). One approach would be to have two resumes; another would be to organize your skill sets into two distinct areas – sourcing expertise and business/consulting expertise.