Procurement as a Career Stepping Stone – 5 Things You Need to Learn
The skills and experience you learn in procurement could propel you all the way to the top. Why is Procurement such a vital stepping stone in your career?
Not only did 2020 show us just how critical a well-managed, efficient procurement department and supply chain are to an organisation’s success, but it also added fuel to the fire that, if you want to reach the top, procurement experience is a must-have.
Having the knowledge of how procurement operates effectively and efficiently is a way people choose to differentiate their CV and skills when it comes to internal promotions. And with most CEOs still being promoted from within, procurement skills are seen as a real advantage when progressing to the highest levels.
Executive Aspiration
In the past it has been common for IT or Quality professionals, Engineers and Quantity Surveyors to ultimately end up in procurement thanks to their experience in buying goods, services, or systems as part of a previous role. Having experienced the role first-hand, they then choose to make procurement their career.
But what of the aspiring executives who may have once viewed their rotation through procurement and supply chain with dread? It has become clearer to top level executives the world over that modern companies are supply chains, and without understanding the supply chain, you cannot fully understand your own company. And without that knowledge, how do you expect to one day run that company?
If there isn’t a clamour for executives for the future to get involved in procurement and supply chain, then there’s an issue somewhere. When the chance comes for an individual with C-Suite aspirations to rotate through procurement, it should be seen as an opportunity to be seized and savoured, taking as much learning and experience from it as possible.
CPO to CEO?
Traditionally CEOs have come from a Financial or strongly Operational background. Now, however, CPOs are now seen as having the ‘right stuff’ by proving procurement’s value and delivering on business strategy. There is a great opportunity for someone coming up through the ranks to get outside their operational silo and learn from other areas and to make a lasting impression on their way to the top.
Procurement will benefit in the long-term from having advocates at the highest level of an organisation. They’ll understand the value of the function because they have actively worked in it. For CPOs, who already have the grounding and experience in the function, it means it’s more likely than ever for them to reach for the C-Suite and beyond, following in the footsteps of these procurement giants:
Mary Teresa Barra
Mary Teresa Barra has been the Chairwoman and CEO of General Motors since 2014. Prior to her appointment, Barra was GM’s Executive Vice President of Global Product Development, Purchasing and Supply Chain. There she built up a reputation for innovation and excellence in products and sourcing and is credited for improving the quality of GM’s vehicle fleet.
Gerry P. Smith
Gerry Smith is the current CEO at The ODP Corporation and formerly the CEO of Office Depot. Smith was previously in charge of end-to-end supply chain management, including all things procurement, at Lenovo. He won Supply Chain Executive of the Year in 2009, and his rise to CEO at Office Depot was built upon his operational experience in supply chain management.
Tim Cook
No look at a procurement leader to CEO list would be complete without current Apple Inc. CEO Tim Cook. Cook was working responsible for procurement and supply chain at Compaq when he was headhunted by Steve Jobs to transform Apple’s supply chain. Cook reduced the supply base, allowing for the negotiation of better discounts, and reduced stock inventories from two months to two days in just 18 months. This exceptional track record led to Jobs to name Cook as his successor as CEO.
Critical Procurement Skills
Whether you are planning on staying in procurement for your whole career or using the profession as a stepping stone, you need to take advantage and learn the key skills that are now in demand at the top while you are there.
1. Supply Chain Management
As we can see from the examples above, organisations prize operational-focused skills in their CEOs and what better one to have than experience and success in managing your business-critical supply chain. Organisations need to be able to trust the supply chain, and the people managing it, to deliver consistently and, as supply chains become more complex, the skills will be prized even higher.
Developing these skills will allow you to build up full visibility of all tiers of the supply chain, understand transactional and strategic requirements in the supply base, as well as know how and where to adapt the supply chain to minimise disruptions and survive in our ‘new normal’ environment.
2. Innovation and Change
Unlike many other functions in an organisation, procurement needs to constantly adapt and change to meet business requirements. In many cases these skills will be linked to how you work with your key suppliers to foster a culture of innovation and product development, much like Mary Teresa Barra did so successfully at GM.
Through developing supply relationships, understanding how and when to work collaboratively with suppliers and even when to wield the axe, you will be able to build your own portfolio of success in providing solutions to add value and reduce costs year-on-year, while still meeting organisational time and resource objectives.
3. Risk Management
There is a definite shift in thinking at the top of organisations when it comes to risk management and business disruptions. While it’s ok to be reactive to some risks (for example, unforeseen global pandemics…), leaders need to be much more proactive too and tackle other risks head on. Procurement and supply chain roles will allow you to get experience of managing suppliers in volatile markets, in uncertain times.
Mitigating risks in the supply chain is also critical, particularly when it comes to hot topics in the public consciousness like Modern Slavery or Environmental or Sustainability performance. You need to have the skills to limit disruptions that hurt the business or risk damaging your own credibility in the organisation.
4. Relationship Management
The common thread running through the skills so far is a reliance on your wider team, from the analysts at the bottom, right up to senior category managers, to pull together. By working on your Emotional Intelligence (EQ) and soft skills, you’ll make yourself a better and more rounded leader. It will allow you to build a stronger procurement team, as well as bringing your suppliers on board with your vision externally.
It’s also going to help with your internal stakeholders in other departments and lift procurement out of the silo that it can often find itself in. This helps create a better understanding of procurement’s role, increases advocacy for the function and means you have more support or backing when it comes to stepping up to the C-Suite.
5. Digitisation
The requirement for digital skills across the organisation is critical due to increased remote working and demand for more advanced technologies. In procurement these skills will be necessary to enable efficient and effective use of technology to increase visibility throughout the supply chain and help with the management and monitoring of risk.
Over the coming years, organisations will likely increase their spending on technology and accelerate digitisation programmes that were either slow moving or not a top priority previously. However, there is no use in investing in and integrating this technology without having the skilled people to use them. Putting yourself at the forefront of this digitisation in procurement, you will not only increase your profile, but learn skills you can take forward to your next roles.
