In ten years’ time, the procurement profession and the role of the Chief Procurement Officer (CPO) has changed in many unique and profound ways. Yet, just like 2010, CPOs and other procurement leaders are entering the new decade grappling with intense challenges (some old, some new) and driving forward to achieve aggressive goals and objectives.
On that front, I’m pleased to continue with our exciting, new series on CPO Rising – “20 for 2020” which examines a broad range of CPO-driven topics. Today we continue with 20 for 2020: Key Themes for the Modern CPO’s Agenda (#9 – Boldness), which is designed to help procurement executives set their organizations’ course for the critical months and years ahead. Enjoy!
20-for-2020: Theme #9 for the Modern CPO’s Agenda: Boldness
Following my last installment in this series (#8 — Risk Aversion), I’d like to remind our readers that the average tenure of a CPO today is less than five years. Being overly cautious is not going to lengthen a CPO’s job tenure, in fact, it may shorten it.
What’s needed is BOLDNESS!!!
This is defined as the having the confidence to take calculated business risks to pursue next-level performance. The tendency to favor decisions that lead to more predictable outcomes pushes many organizations to take more measured steps or simply stay in place. The net effect of this behavior is that in general, procurement organizations are less aggressive than they should be in driving change. Chief Procurement Officers must work to counteract organizational prejudices and more actively push boundaries, challenge limits, and rethink paradigms.
While the CPO has been able to move into the same “neighborhood” as the other C-level executives, the procurement chief’s residence has often been found on “the other side of the tracks” when compared to their other higher-profile neighbors. Due to the broad impact of procurement’s many efforts, such as cost savings and efficiency gains to name a few, many executives raise the question of just how much “farther” the function can go when looking at future investment in the procurement operation. This inquiry, today, is easily satisfied because of the average company’s overall desire to become more digital, providing the CPO and the entire procurement team with the exciting new potential to push the boundaries of enterprise value. The opportunities that sit before procurement to drive more value as a result of digital transformation and data intelligence are sizable and, more importantly, attainable. And, though the other executives may not be giving the CPO the keys to a new castle anytime soon, by continuing to make an impact, CPOs may be able to move to a nicer part of town.
As is, from where CPOs “live” today, a majority of them already believe that their departments’ impact is making a difference, which has been a part of a larger three-year trend. What is perhaps most interesting is that no respondents to last year’s state of procurement survey see a downward trend in impact over the past three years; 72% believe that they are trending up, while 20% believe that they are trending up significantly. At worst, just eight percent (8%) see a flat three-year trend. It is both curious and surprising that not a single respondent of the more than 300 who answered the question feel as though their momentum is trending in a negative direction. It is also unlikely to be true.
An important follow-up is whether or not this view is shared by the rest of the enterprise, or simply wishful thinking on the part of today’s CPOs. Many may be living in the same neighborhood as they were last year, but their view of the neighborhood may be very different from reality. What is certain, however, is that a procurement department’s momentum will not be sustainable unless new elements are added to the mix. In fact, it is Ardent’s view that most procurement departments have not yet added important new innovations and have either hit a figurative wall or will soon see one approaching.
Final Thoughts
Failing fast is more acceptable today and the opportunities merit taking greater chances. If you only have a limited time, don’t you want to play your best game? Rise up, rise up, it’s time to take a shot.
RELATED ARTICLES
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#1 – Visibility)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#2 – Agility)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#3 – Innovation)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#4 – B2B Payments)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#5 – Digital Transformation)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#6 – Disruption)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#7 – The Future of Work)
20 for 2020: The Key Themes for the Modern CPO’s Agenda (#8 – Risk Aversion)
