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The Self-Disruptive CPO: Why We Need a New Kind of Procurement Leader

23 March, 2020 | By Bernhard Raschke

Only a few months ago, the stock market was looking strong and the ongoing trade war between China and USA indicated future pressure on the global supply chains. No one could have predicted that schools and universities would close, companies would tell employees to work from home, and people would be stock piling toilet paper, of all things.

COVID-19 is causing far more than just financial damage. CPOs around the world in all industries are scrambling to secure supplies, and keep fearful employees motivated to work. And, in some cases, they’re seeing their bold strategic plans that have been years in the making fall apart.

This is the real test to all CPOs. An important first point is that managers should acknowledge that they do not have all the answers and that they need to make a move to Plan B, C or even D.

To help CPOs guide through this difficult time, Digital Procurement World spoke with Korn Ferry’s Bernhard Raschke, one of the top leadership experts in the procurement industry to understand what kind of future-ready procurement leader is needed to survive in a rapidly changing business world. Here is what Raschke said.

The changing role of the CPO in times of disruption and crisis

CPOs always deal with ambiguity – it comes with the job. During crises, ambiguity becomes exponential. As fear becomes contagious across organisations, CPO resilience will be tested to the limits.

The role of the CPO during such times very quickly shifts from driving sustainable supplier value and innovation towards managing supply risks and preserving cash to ensure business continuity.

Knowing what to do when you don’t know what to do: There’s nothing like a crisis to accelerate learning. This is learning agility on steroids – applying lessons from the past to new and unfamiliar situations.

Introducing the self-disruptive CPO

Extensive research by the Korn Ferry Institute of over 150,000 executive profiles reveals the best prepared leader for tomorrow’s disruptive business environment: The Self-Disruptive Leader.

Self-Disruptive CPOs are highly learning agile, self-aware, emotionally and socially intelligent, purpose-driven, and assured but humble. They proactively modify their own methods and attitudes, enabling them to keep pace with the rapidly transforming supply chains and risk scenarios.

This model of high-performing leader incorporates and builds on existing concepts of agile, digital, and inclusive leadership. In this model, the source of competitive advantage is a leader who can connect resources and people to build an innovation ecosystem.

Future-ready CPOs need to ADAPT

ANTICIPATE: Listen rather than dictate. Listening helps them to identify possibilities ahead of others, and secure “first-mover” advantage. Their instinct is to create, while integrating differing views and making quick judgments to help others reach consensus decisions.

DRIVE: Energise people by fostering a sense of purpose; manage the mental and physical energy of themselves and others; nurture a positive environment to keep people hopeful, optimistic, and intrinsically motivated. These leaders are empathetic and can relate to the thoughts, emotions, and experiences of others, but they also know that emotions can be contentious, so they watch for and manage their own.

ACCELERATE: Manage the effective sharing of knowledge to produce constant innovation and desired business outcomes; use agile processes, quick prototyping, and iterative approaches to rapidly implement and commercialize ideas. These leaders grasp how businesses can be gripped by the fear of missing out. They know innovators may not originate ideas, but are the first to successfully execute them, so they act swiftly and courageously.

PARTNER: Connect and form partnerships across internal and external boundaries; enable the exchange of ideas; combine complementary capabilities to enable high performance. Leaders with the ability to partner effectively understand that innovation is created collectively and by diverse teams, not alone. By avoiding restrictive hierarchy and the “command-and-control” leadership models, these leaders facilitate empowered and original thinking. The objectives is not always to create team harmony. Productive confrontation can spark original ideas and sometimes needs to be encouraged.

TRUST: Those who inspire trust understand that diversity is crucial and requires a mindset of inclusivity, sharing goals, sharing responsibility, and sharing power and risks. Leading based on trust means to take considered risks but to foster dialogue through frequent and high quality and transparent communication. Sometimes that means admitting to stakeholders about being afraid, and other times it may mean admitting you don’t know everything. Communications always include, “Here’s what we know, what we don’t know, and what we’re trying to find out,” says Andrés Tapia, Korn Ferry’s global diversity and inclusion strategist.

It seems counterintuitive, but in a crisis, CPOs must learn to let go of control which means actively engaging and enabling others so that they can perform. This shift in leadership styles requires trust — both in others and in their ability to contribute without being micromanaged, and in one’s own ability to deal with unexpected outcomes.

Plans are fluid and change day to day. Admitting that the strategy is bound to change, too, should build trust and improve collaboration. “You need to be clear and you need your team to understand what your priorities are and what you expect of them, but you need to lead from the human side first,” says Ann Francke, chief executive of the UK’s Chartered Management Institute.

In a crisis, CPOs must connect with, motivate, and inspire with their team, suppliers and stakeholders – and show genuine compassion. In the military, for example, leaders put the safety and well-being of others before themselves.

Do you have what it takes to become a self-disruptive CPO?

We can expect that the COVID-19 crisis will change our businesses and society in many ways. It is likely to fuel areas like online shopping, online education, and public health investments, for example. It is also likely to change how companies configure their supply chains, and to reinforce the trend away from dependence on few mega-factories. When the urgent part of the crisis has been dealt with, companies should consider what has changed, and what they’ve learned so they can reflect their findings in their plans.

COVID-19 is not a one-off challenge. The CPO who wants to remain in the driver’s seat will start preparing for the next crisis (or the next phase of the current crisis).

Outlook

Let’s hope that the crisis will turn out to be less serious than anticipated, as was the case with the SARS outbreak. The full effect of the virus won’t be known for months, but it is going to test the adaptability and nimbleness of supply chains for every global industry.

While some have drawn comparisons between the coronavirus outbreak and the SARS epidemic of 2002, there is one big difference for business operations: a lot more data analytics are available now. Supply Chain leaders that have invested in digital capabilities can track the coronavirus’s impact across a range of data points to better forecast risk and response for the next outbreak. 

Goldman Sachs suggests that there will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. There is no systemic risk, governments are intervening in the markets to stabilise them, and the private banking sector is very well capitalized. “It feels more like ‪9/11 than it does like 2008”.

Bernhard Raschke is Senior Client Partner & Head of EMEA Supply Chain Centre of Excellence at Korn Ferry

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