The role of today’s leading CPOs stands in stark contrast to what the role entailed even just a decade ago. Instead of being holed up in their offices figuring what cost saving to next pull out of the hat, modern CPOs have their hands in numerous pots and ensure a large part of their focus is connecting with all the different parts of the business, as well as their supplier ecosystem, to build a high-quality roadmap to innovation.
This will become even more important in the future with the role of procurement extending to all areas of an organisation’s innovation strategy as the function evolves at pace. It is no longer enough to simply have year-on-year cost savings; modern, winning CPOs have to balance multiple responsibilities across both savings as a given, and the evolution into a top line revenue growth driver as demanded by the C-Suite.
While the opportunity ahead is an exciting one, it’s also a challenging time for CPO’s. Procurement has languished toward obsolescence and will die without a transformation. Today’s Chief Procurement Officers have just one job: adopt a future-focused model to meet users’ needs. However 62% of CPOs do not believe their team have the skills and capabilities to deliver their strategy. (Deloitte: Procurement at a digital tipping point?)
Perhaps this is why today a huge amount of CPOs are struggling to bring their procurement functions more into line with delivering what the business requires – innovation and growth.
For those CPO’s that understand how to lead – and take advantage of today’s continually evolving business environment – the potential is huge.
Here are the 10 key pursuits for the 2020 CPO:
- Work across every department
Procurement is no longer isolated. As a future leader of revenue growth, the CPO needs to include departments like R&D and IT in their conversations and be well-versed and aware of their projects.
- Use analytics to drive performance
It’s a data-driven world. Modern CPOs should understand analytics and use data to drive their strategy and performance.
- Impact strategy within C-Suite
The CPO has a potentially huge role to play at C-Suite level and needs to bring a fresh, outside-in perspective to other executives.
- Think ecosystems
No company is an island. CPOs need to think beyond borders and involve partners and suppliers more heavily in their innovation strategies.
- Act as a Chief Innovation Officer
In order to leverage technology, the CPO has to be aware of its capabilities and be competent in multiple programs, while also staying ahead of new advancements being developed within their partner ecosystem.
- Be socially responsible
CPOs need to connect with a cause. Consumers favour brands that are socially responsible and want to support companies that take a stand.
- Be Proactive
CPOs need to push the envelope. Staying within the current reactive behaviour when it comes to being world class is no longer enough; the best CPOs set trends for the future and lead the charge.
- Collaborate with suppliers
To be effective, CPOs must truly know and understand their suppliers deeply. Interact with them, learn about them and build deep rooted relationships based on equity and transparency.
- Develop future procurement leaders
Procuring innovation is a team sport. The CPO can’t do it alone and needs to mentor rising talent to create the next generation of great organisational leaders.
- Build trust cross organisationally
Good supplier partnerships centre around trust. The CPO leads the way in creating open and honest relationships with suppliers.
Winning CPOs of the future will need to do more than just lead procurement. They need to take a stand on innovation, connect with their supplier ecosystems and find ways to build out their competitive advantage through best in class leadership.