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CPOs Speak: Earn and Keep a Seat at the Table

Posted 04-27-2010 at 07:54 PM by 95th Annual
Updated 04-27-2010 at 11:09 PM by 95th Annual
Four CPOs at the top of their profession participated in today’s panel discussion, “CPOs Speak: Earn and Keep a Seat at the Table.” Many attendees gathered to gain insights on developing and sustaining internal client relationships from Lisa Martin, C.P.M., senior vice president of worldwide procurement at Pfizer Inc.; Dave Nelson, C.P.M., A.P.P, senior partner at Fenix Group International, L.L.C.; Shelley Stewart, Jr., MBA, senior vice president of operational excellence and CPO at Tyco International and chair of the ISM Board of Directors; Sid Johnson, vice president of global supply management at Delphi Corporation; and moderator Nancy Q. Smith, M.A., director of strategic partnering at Exemplary Performance.

The lively discussion began with overviews by each CPO detailing his or her career path in supply management.

Nelson began his career in 1957. “Purchasing then, versus now, is day-and-night,” he said, because best practices are available for implementation today. “And now, you have to get a seat at the table – even if it’s sometimes a hot seat,” he added, laughing.

Martin joined the supply management profession in the 1980s with no intention of it being a career. At the time, she wanted to do public relations in Hollywood; however, an actor’s strike made that a difficult move. Instead, she was hired by a post-production facility to help build a procurement department from the ground up. “Anyone who knows me knows I love to shop!” she joked. Soon after, Martin met the then-president of her local ISM affiliate, and her career path became more solidified.

Today, she has been with Pfizer for 12 years. “When I got there, I’d say we had a stool at the table, not a seat,” she told attendees. “Today, though, we definitely do.” The most critical aspect of keeping that seat, she added, is the realization that although processes and practices are critical, supply management must also deliver the results the stakeholders want.

Stewart was the first child in his family to attend college. After graduating with a few degrees, he moved back to New York and went to work at an aerospace company. In the three years he spent there, Stewart recalled, he learned a lot – but, he’s constantly amazed at how prepared today’s young graduates are to function in the supply management role. Even so, he had a few words of advice for them: “You’d better not get the seat until you’re ready for it.”

Although Stewart now sits at a table with the CEO and all the presidents at Tyco, he reminded attendees that he “has to earn his keep” to keep that seat. This requires understanding the business strategy of the organization, as well as what other stakeholders in the company want from procurement. “You have to be an influencer,” he emphasized, referencing a key message from Angel Mendez’s opening keynote session (http://www.ism.ws/bulletin/blog.php?b=21) on Sunday.

For Johnson’s part, the trait that has helped him the most in getting to his professional level is the ability to work across the organization. “Everyone in [this room] gets things done through others,” he said.

When asked when each panelist realized the importance of getting a seat at the table, the answers varied. For Johnson, it was the realization that more is spent on materials – in some cases, double the amount – than on manufacturing. “Why WOULDN’T we be at the table?” he asked.

For Stewart, it was when his department delivered their first $1 billion over three years. “That’s when we got their attention,” he recalled. “And you do need to have a few successes first.” In Stewart’s case, his CEO gives constant feedback on the dollar impact of procurement on the bottom line, which indicates the function is very much on executive leadership’s radar.

Martin said that her boss at Pfizer expects procurement to be front-and-center, and – like Stewart’s boss – regularly calculates and communicates the function’s earnings-per-share (EPS) contribution. “At the senior levels of the organization, we’re blessed,” she said. “But, we’ve earned it.” True to form, ever since Martin and her team achieved their first $1 billion goal, the bar has consistently been raised.

In 1994, Nelson was called by the board at Honda to establish supplier study groups to help remove 30 percent of the cost of the ’98 Honda Accord. It was a new concept for him at the time; yet, when he gathered the suppliers together, they responded with around-the-clock cost-reduction ideas presented to Honda engineers. “I learned that suppliers are eager to help if you ask them,” he advised.

At this point in the session, the esteemed panelists fielded questions from attendees.

Q: Has your seat at the table ever been taken away? If so, how did you get it back?

STEWART: You have to live in your internal customers’ shoes. You’ve got to stay in their faces. Be proactive so that your value is constantly demonstrated. Don’t create the gap for them to walk away.

JOHNSON: You’ll make some significant structures during a crisis. Don’t lose those once the crisis is over.

MARTIN: I can’t tell you how many brick walls I’ve hit in my career [regarding executive hold-outs]. You have to be resilient, back up and try another part of the wall.

NELSON: Become their boss! [laughs] Things get a whole lot more simple after that.

Q: How are you recognizing internal partners’ successes?

STEWART: Nobody wants you to show up in their office with your target, so I think rewards and recognitions are really critical.

JOHNSON: I spend one hour with my CEO very month, and I always take a team with me to give them some high-level visibility.

MARTIN: Don’t forget to just say thank-you. Also, on a quarterly basis, I used to go to the top 40 people in the organization with a slide deck about procurement. I’d customize that deck for each person.

Q: What are some of your most crucial leadership lessons?

MARTIN: Resist the urge to swoop in and fix things, because people aren’t learning when you do that.

JOHNSON: I agree. Let people do their jobs.

Q: How can people at the middle-management level exert influence?

MARTIN: Have someone at a higher level to talk to. Also, try to practice your influence in a safe environment. For me, that was managing volunteers within ISM.

NELSON: Don’t try to fix it all. Delegate, delegate, delegate – and do it with expectations. If people have a chance to make a name for themselves, they’ll take it.

Q: Are any of you worried about talent retention?

MARTIN: I actually like it when people leave supply management to work in other parts of the business.

STEWART: I do, too. Then, they become disciples.

Q: How likely is it that more CPOs will be CEOs 10 years from now?

STEWART: There’s a whole evolution toward that happening right now. Our operational skill sets mean the sky’s the limit.

NELSON: We’ve already seen instances of this. There are lots of examples already.

Q: How do you know you’re sitting in the RIGHT seat versus being seen primarily as “the cost guys” by senior management?

JOHNSON: As Shelley said, you’ve got to be ready for that seat. Once you get it, everything you do must be focused on growing the business. For me, it is.

NELSON: Be replaceable; you can’t be promoted if you can’t be replaced. Also, be open to relocation and a wide variety of opportunities.

MARTIN: Your question shows how we’re evolving as a profession. My advice is to talk about things in terms of the business as a whole.

STEWART: You don’t have to always lead with cost reduction. Focus on process improvement and agility.
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