Updated: Jul 31, 2019
In 100 days between March and June of 1815, Napoleon Bonaparte escaped from his prison on Elba, assembled 1000 supporters, returned to Paris where he was welcomed by cheering crowds, ousted Louis XVIII and began what came to be known as his Hundred Days campaign. He built his army to 280,000, invaded Belgium was finally defeated by Wellington and an allied Anglo-Prussian force at Waterloo – he was then carted off to another island prison at St. Helena – Phew!
Unfortunately, (or fortunately, depending on your point of view), the first 100 days of a CPO do not normally make their way into the history books, although in reality they can be “make or break” in the ultimate success of the incumbent.
Having studied the effectiveness of procurement as part of my doctorate programme, it is clear that the first 100 days is significant indeed, and I have identified 5 factors as part of a “Procurement Effectiveness Model” that is key to success and that have to be addressed within those 100 days. Often it is the specific situation that dictates the priorities for the individual, however the 5 factors relate to common themes that are transferrable across business, industries and sectors.
I may be biased, however I truly believe that we have the best, and one of the most influential jobs in the organisation. What other job allows you to improve quality, improve delivery performance, lower the cost base, and line up the extended supply chain to add significant value to the bottom line (or in the case of public sector / third sector organisations, to improve outcomes). It is surprising therefore that the role of CPO is still relatively immature, with many organisations still seeing procurement as a low level function within the business.
This brings me on to the first of the factors that are important to address within those first 100 days namely “The compelling case for change”. In my experience this is one of the most important things that a new CPO needs to address as a matter of priority and is to build and communicate a solid case for why procurement is important within the organisation. A company heading for bankruptcy is typically motivated to make the required changes that keep the receivers at bay, and in this situation the compelling case for better procurement is strong. In other organisations however, especially if they are profitable, the need to do things differently needs to be made very clear to all of the stakeholders. In a previous role where the compelling case was initially low, there was nodding agreement in front of the CEO, however when the same senior managers went back to their own departments their activities were more motivated by “appearance of compliance” rather than to embrace the change. This was due in part to a view that they were profitable so “why bother” and a perception that this initiative may degrade their own particular “power base”. This was addressed by making clear the benefits for the business in terms of lost opportunity cost as well as ensuring that the whole programme was inclusive in its nature and that they could get improvements by operating in an inclusive way. The direct correlation of performance improvement on the back of enhanced procurement activity to their personal bonus’s also helped!
In part 2 we will look at the remaining 4 factors that need to be addressed in order to give the new CPO a fighting chance to succeed