Ardent Partners is pleased to welcome Jeffrey Ball, Chief Procurement Officer of Digital First Media, to CPO Rising 2017. Jeff will deliver a presentation entitled “Putting the ‘Strategic’ in Strategic Procurement” on Day 1 of the event. We sat down with Jeff to learn about his background, his views on what makes procurement strategic, and to get a preview of his presentation. The following transcript has been edited for brevity and clarity.
Christopher Dwyer: Please tell us a little bit about your background, how you got into procurement, and where you are today.
Jeffrey Ball: I took a circuitous path to the procurement profession and the CPO Role. After leaving the Navy in early 1992, I secured an entry level management position within Sears Roebuck’s logistics arm. The retail giant was revamping its entire distribution network to replicate Walmart’s successes, and I was fortunate enough to work for and help Sears during its halcyon days when their stock prices were enjoyed consistent double digit CAGR’s Specifically, I had the opportunity to hire, train, and staff my own organization as we assisted in revamping the entire supply chain. During my tenure I oversaw receiving operations and what Sears called “expedited merchandise processing operations.” I served Sears for about five years until I decided to go to business school and effect a career transition.
After earning my MBA at Yale, I moved into strategy consulting, joining a firm called Mitchell Madison, which had a fairly deep and robust sourcing practice. I ended up serving a number of clients in the media and entertainment space, including Rupert Murdoch’s News Corporation (now 21st Century Fox). I was employed in consulting for about five years when my former client at News Corp called offering me a position to help build a new procurement capability across the enterprise, which I accepted with alacrity. I had grown tired of the consulting lifestyle, even though it proved to be a great post business school experience. So I worked at News Corp/Fox for 10 years building a strategic sourcing and vendor management organization that was unique in that it focused not only on driving bottom-line growth or improving cash flow, but also proving top-line growth. That is to say I had the chance to experiment – to push beyond traditional boundaries and elevate the entire function. Later when Rupert Murdoch bifurcated the two companies, I decided to look for my next opportunity, which I found at the Great Atlantic & Pacific Tea Company.
The Great Atlantic & Pacific Tea Company was a struggling grocery chain, trying to turn around operations, and I joined at the tail end of the retailer’s history. It was very interesting to serve in a procurement and private label quality assurance capacity, helping to add value in order to make assets more valuable to those that might be interested in acquisition. So, not only did I work in the traditional procurement capacity while the retailer was still operating and winding down, I actually got to help sell a firm with many great assets. Thus in December of 2015, I joined Digital First Media, the nation’s second largest newspaper and digital advertising group. I’ve been serving in a CPO capacity here for nearly two years, helping to build out and solidify a Best-in-Class procurement function – not unlike what I did at News Corp. It’s intriguing to work both in retail and media because the landscape is so dynamic that it forces one to think out-of-the-box, to think creatively, and to constantly scan the horizon looking for new technologies and opportunities. So I very much enjoy the challenge here.
CD: Great! On that note, what’s so unique about being a CPO in a media company compared to a CPO in a manufacturing company?
JB: In media, you sit at the confluence of new technology, digital transformations, and the changing consumer socio-political landscape – they all come to bear in a very dynamic way. The same may be said of retail. There are a great many forces at work that have constantly, at least over the last decade or so, pushed and pulled at these industries. So many different competitors exist now, as audiences become fragmented and in the case of media, as politics becomes more polarized. These elements all play a part in the future and the evolution of the company. And as a CPO, I control or have insight into more internal and external relationships than probably any other function in the company, so it puts me right at the epicenter of the ecosystem of this dynamic industry.
CD: That’s awesome. What’s your two-to-three year outlook on the general procurement function?
JB: Well, to the extent that what I just said can be extrapolated across all industries and technologies, I think the function will be forced to become more ecumenical. I think it’s going to become more broad-based in its scope.
As I said, procurement is at the epicenter of all these different relationships. So by having meaningful discussions with vendors – not just about the bottom line or ongoing transactions, but also about creating synergies – you can figure out where your company’s strategies, objectives, and priorities lie versus those of your vendors and your entire ecosystem. You can create Venn diagrams where the opportunities intersect, and then you can identify pockets of opportunity to grow the top line or create joint ventures.
I think that in addition to focusing on budgets and bottom-line improvement, the astute C-level executive (whether it’s the CEO, CFO, CIO, or CPO) will look to the procurement function to help grow the top line. Procurement won’t just focus on the bottom line, on strategic sourcing, and on getting the right amount of goods delivered in the right manner and in a timely manner. Those are the necessary but not necessarily sufficient conditions, I think, for successful CPOs.
It’s all well and good to say, “Well, purchasers or CPOs are already strategic – they’re already interfacing because they have to go to the engineers, work with them, get the specs, and then work with the operations folks.” But that’s all tactical! Again Procurement officers need to be strategic. So, I think the CPO will be impelled to operate more as a strategy executive.
I’ll give you an example. In procurement, people throw strategic sourcing around far too loosely. There’s nothing strategic about sourcing office supplies, yet somebody will say “I’m working on a strategic sourcing project now for office supplies, paper, or print.” That’s not strategic. Strategic is sitting with the office supply retailer and figuring out ways that could encourage them to advertise more with your company if you’re a media company, or open up a store within a store-to figure out ways to grow the top line as well as the bottom line and improve cash flow.
I also think Big Data is going to open up many opportunities for the seasoned, experienced purchasing executive to create very dynamic dashboards that trace global commodity trends and connect them with global supply chains. These dashboards will track market movements, political factors, and other variables and overlay them with specific commodities, suppliers, and subcategories or functional areas. I think they will help the CPO become less reactive and more proactive because they will be in the driver’s seat – they will have a first-mover advantage, knowing how markets are going to change. Lastly, I would argue that the CPO also has to operate somewhat as a CIO, especially in the Big Data era. He (or she) has to understand which technologies have a reasonable shot of becoming de facto standards in the industries in which they participate.
CD: Great, thank you so much, Jeff. One last question for you: can you give us a sneak peek at your presentation at our event?
JB: It’s going to capitalize on a lot of the things that I’ve been talking about. But I’ll focus on a joint venture I created at News Corps with Fox News and the Wall Street Journal, around the small business sector. I was able to convince our entire sourcing ecosystem to participate in a transaction-based portal and extend a derivative form of News Corps’ purchase expense discounts to the small business sector. So we became a transaction engine – a broker for the small business sector as it relates to business travel, office supplies- all of the commodities that corporations tend to buy in large purchases and receive beneficial deals.
This partner ecosystem had a hundred million dollar pre-money valuation that elevated the Fox News and Wall Street Journal brands. That’s a concrete example of how, from the CPO’s unique perspective, something can be created to help grow top-line value.
CD: Jeff, thank you so much!
JB: It’s been my pleasure, Chris.