Our “Procurement Experts on CPO Rising” series continues today with an excerpt from my 2021 episode of the Procurement Rising Podcast — Alejandro Gusis, former Global Vice President Indirect Procurement and Real Estate at Univar Solutions (click to listen to the full interview). Note that this excerpt has been edited for readability.
Andrew Bartolini: You bring a couple of different things to bear that many CPOs have, and that is a strong technical background, coupled with particularly good experience on the process side with a finance overlay. Talk about how you have put those skills to work in the more senior positions that you have had in procurement.
Alejandro Gusis: When I was in finance, everybody talked about total cost of ownership (TCO). But to be honest, I have not seen it implemented to the extent that I like across the board, ever. It is easy to focus on savings, but much more difficult to focus on the real impact of the decisions that you’re making both today and tomorrow. This is where finance helps a great deal.
And I hear procurement professionals asking questions about their purchasing decisions. I’ve made this decsision, now what? What if I continue going down this path? What is the impact today or tomorrow on those worries? Is what I am buying have any residual value? Will I need to pay insurance? Are there extra risks if I do not pay insurance?
That type of mentality of analyzing every single aspect of the relationship that you are setting up with your vendor partners is extremely important. And you get it through financial knowledge. The other aspect is that the higher you go in a career, the more legal knowledge you need to have as well. That is also part of what makes up TCO.
And operations is extremely important as well. The actions that you take today, like changing vendors, affects how your company operates. If you decide to replace the outsourced provider for your facility management, there is going to backlash and challenges. You must understand the processes that you are changing. When that backlash comes — because not everything is going to be perfect — you need to solve those problems. That is how you win buy-in from your staff — solving problems. It is quite easy to contract something, but much more difficult to make it successful within the first year or two.
That is where an operations background is beneficial. I can speak one on one with a COO or a supplier from a technical perspective about a variety of issues. In my previous role, I oversaw capital expenditure purchasing, which required speaking with engineers and commenting on specifications. Of course, they are the experts, but you should develop some understanding of engineering to converse with vendors on what they are proposing and the effects of those decisions.
AB: When you are recruiting and hiring at the more senior level (e.g., senior manager, direct reports), what are the skill sets you are looking for in those candidates?
AG: I am looking at whether you have that fire in your belly. For me, that is extremely important. And then of course your fit with the organization. In terms of skill sets, people with analytic skills are critical. I am an engineer after all and I need people who can develop and use complex spreadsheets and run models. That allows me to then report on those results. Similarly, having PowerPoint skills is essential. It is easier to teach PowerPoint than Excel.
Also, when I hire direct reports, I am asking myself whether this person can replace me in three or five years. I need to think about succession planning, so it is important that I bring people into the organization who want a career, not just a job.
MORE CPO TOPICS
Procurement Experts on CPO Rising — Planning for the Next Iteration of Source to Pay
Procurement Experts on CPO Rising — Changing Mindsets for Digital Transformation
Procurement Experts on CPO Rising – Achieving Big Returns on Spend Under Management
Procurement Experts on CPO Rising — Moving Procurement into the Spotlight
