The Road to Procurement
Like so many other Chief Procurement Officers (CPOs), Steve Listzwan, the senior vice president and head of procurement at Shire Pharmaceuticals (and the recipient of CPO Rising’s 2017 Leadership/CPO of the Year award), began his career outside of the profession. He earned a BS in Civil Engineering from Union College and for the first five years of his career, Steve designed environmental engineering projects for O’Brien & Gere Engineers in Syracuse, NY. Not long after beginning his career, Steve enrolled in a part-time MBA program at nearby Syracuse University. In June 1995, with his new degree in hand, Steve took a temporary assignment within the procurement office at Merck & Co., Inc., one of his firm’s clients, covering for a maternity leave. After six months, he was offered a permanent position within the Merck procurement organization, the first of many over a six and a half year period that would have him relocate to Italy and Ireland. He capped his tenure there as a Manager in Global Procurement responsible for implementing Merck’s first electronic P2P platform.
“Merck was great for my development as a young procurement professional,” he said. “I was given great opportunities, had the luxury of a great mentor, and learned the fundamentals of the procurement profession.”
In September 2001, Steve joined Cambridge, MA-based Biogen when it was a much smaller company than it is today (at the time, it was spending only about $400 million a year and has since grown significantly). He reported into the controller of the company and established Biogen’s first strategic sourcing team. In moving from Merck to Biogen, Steve went from pharma to biotech at a time when the two industries were still largely separate (now they are often intertwined). After more than seven years, Steve left Biogen and became the Director of Global Strategic Sourcing at MedImmune (the biologics division of Astra Zeneca), headquartered in Gaithersburg, MD. In 2012, he was recruited out of MedImmune to become the Global Head of Procurement (CPO) for Novartis Vaccines, a position he’d hold until the company was purchased by GSK in 2015.
Coming Home to Shire
Steve joined Shire in April of 2015 as vice president and head of procurement (CPO). “Being at Shire has been especially interesting given that it is such an acquisitive company,” he said, adding that the company has purchased four companies since 2015. When Shire acquired Baxalta in the summer of 2016, Shire’s annual spend doubled from $3 billion to $6 billion. Steve and his team “used that opportunity to accelerate the transformation of Shire Procurement” by finding synergies between the two companies (for example, 30-40% of the total integration synergies were delivered by procurement). Steve and his team merged and reorganized the two procurement teams and “used that opportunity to create a truly world-class procurement function and deliver substantial value back to the business.”
Earlier this year, Steve and his team learned that Takeda was interested in purchasing Shire, and as a result, they are in the process of preparing for that acquisition, which they expect to close in the first half of 2019. A majority of the team is focused on continuing to drive the procurement function and delivering results for the company. Steve has a small team that works with a team from Takeda to map out the future of the Shire-Takeda procurement operation – how they will merge, what kind of spend opportunities they intend to pursue, and standing up “clean teams” resourced by independent third parties to look for those opportunities.
The Procurement Game has Changed (and that’s a good thing!)
When Steve began his career in procurement, “it was thought of in a certain way as a transactional support function.” It’s gone from managing individual deals to managing categories and delivering total company value. For Steve, “the biggest transition has been procurement being looked at as a strategic partner by the business. That’s something that needs to be earned by procurement.” Procurement had to work hard to elevate itself to that level. Steve’s team at Shire has been very deliberate about creating a standard operating model for how the whole procurement team functions around the globe. There are four fundamental pieces:
- Stakeholder Engagement – Formal mapping and regular scheduled interactions with key stakeholders around the company to understand spend, needs and progress initiatives that deliver value. “Stakeholder engagement is not always a top skill of the average procurement professional” Steve said, “but it’s very important to build that skill to be successful in our model.”
- Category Management – “Procurement is the only group that has the ability to see spend across the whole company,” to see market trends, and find ways to optimize spend. Developing multi-year global category strategies in partnership with stakeholders transforms the relationship between the procurement function and stakeholders from tactical to truly value added and strategic.
- Sourcing Projects – Using standard processes, tools, and procurement team skills to implement strategic initiatives that are generated by the Category Management process. “The main process has stayed relatively the same over the years but the tools and techniques have advanced significantly,” Steve said.
- Supplier Management – Partnering with stakeholders and preferred suppliers to get the most out of each relationship.
A Sneak Preview of Steve’s Main-Stage Presentation
At CPO Rising 2018, Steve will deliver a presentation entitled, “Faster, Higher, Stronger: Building the Data-Driven Procurement Athlete.” As an avid cyclist, Steve will draw parallels between athletic competition and the procurement function – how technological innovations in both spheres are used to help individual performers, teams, and their managers improve their performances and realize their potential. As Steve will illustrate, given the use of modern procurement technology platforms, there is a significant amount of performance data available to procurement professionals and their leaders. The challenge for CPOs and procurement teams, as it is for coaches and cycling teams, is to collect and leverage that data in real time in order to measure performance, create custom improvement programs, and ultimately improve performance. Steve will demonstrate that, just as there has been significant technological innovation in sports and cycling, in particular, the procurement space abounds with innovation and robust business tools able to collect and analyze data in real-time and provide almost instantaneous visibility and control. He will then illustrate how Shire’s procurement teams use these innovations to measure and ultimately enhance their performance as individuals and as a total function.
Want to hear Steve speak at CPO Rising 2018? Register by clicking here and take advantage of standard pricing while it still lasts (expires after 11:59 PM on October 16).
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