Not all successful procurement leaders have the heady designation of Chief Procurement Officer (CPO). Forget the title, it is just a label. What is important is that for any person to lead a procurement organisation, he or she requires a basketful of skills and abilities.
The good news is that no one person in a leadership position in procurement is in possession of all these skills. Most technical skills, such as strategic sourcing and contracts management, can be learned over time through training and experience. The jury is still out on whether behavioural traits, like the ability to lead teams and communicate effectively, can be developed.
Many recruitment advertisements ask for attributes using undefined phrases such as “good communicator”, “visionary”, “innovative”, “collaborative”, without knowing what they really mean. Here are five main attributes that procurement leaders need:
1. Ability to Drive Change
Many mid-sized organisations are grappling with the transition from a tactical function within the Finance Department, to a strategic function within the supply chain. The main objective will continue to be cost reduction, sometimes combined with or expressed alternatively as value creation.
Managing change is difficult. It needs a firm hand and a strong will, while being calm under pressure. The ideal person to manage the transformation may be a new hire from another industry, or a seasoned executive from another function in the business. What is important is that he/she has a track record of influencing top management and internal stakeholders across all functions.
Dapo Ajayi, CPO at AstraZeneca, came into procurement management from the sell-side of the business. She has paid her dues, having worked in a variety of senior marketing and branding roles in multiple countries over a period of 10 years.
2. An Affinity for Leading People
It is generally accepted that a collaborative and participative style is a preferred trait. Although traditionally successful, an autocratic approach now doesn’t work, particularly with the under 30’s. Retaining top performers is a constant battle.
Leaders will spend a fair portion of their time on competency development and building teams, as well as understanding what subordinates want and need from their managers to perform well. Because cross-functional teams are established features of best-in-class procurement organisations, leaders also need to nurture non-procurement members and earn their trust.
3. Talk Less, Listen More
For many CPOs, one of their goals is to gain the trust and support of their main internal customers or stakeholders. The key to understanding their problems is to listen intently and absorb their concerns without making knee-jerk assumptions and providing instant solutions. The desired result is to develop open relationships with peers and provide workable solutions for their users in line with corporate objectives.
The successful leader will develop a high level of skill in influencing the more difficult stakeholders and persuading them of the value that professional procurement adds.
Opening two-way communications, across all available channels, can increase cooperation and support from peers in other functions or divisions.
4. Global View, Local Focus
It is becoming increasingly important for procurement leaders to have had global business exposure. This can either be from working in virtual teams or preferably by having completed international assignments. Progressive firms are looking for those with process-driven experience, often in similar sized companies from other countries.
When recruiting from outside, people from management consulting firms, and those with re-engineering experience within the supply chain, are regarded as attractive candidates. Know global, think local.
5. Expertise in Procurement
Last, but not least. To have any credibility with top management, internal and external stakeholders and subordinates, leaders need to have some or all of the following knowledge and experience:
- Category Management – By understanding the concept of leveraging spend across multiple commodities to deliver cost savings and create value, the leader who has shown results this way will be ahead of the competition.
- Problem solving – Our prospective leader needs to be able to focus on the root cause of an issue and devise and test various possible solutions.
- Procurement technology – A familiarity with the relevant available systems and tools will provide opportunities for speeding up and automating some routine functions or even outsourcing them.
- Negotiation skills – Everyone has some experience of negotiation in their everyday lives. Upgrade those skills and get as much practice as possible.
What is likely is that you did not make the decision to become a leader in the procurement function, but guess what? Here you are, ready to launch! Opportunities are emerging for new types of leadership roles that did not exist a decade ago. Find one that suits you.