The New CPO's F100D

The New CPO’s F100D

The New CPO’s F100D – The CPO’s chair has become a true corporate hot seat with an average tenure of a CPO of four years or less. The first 100 days (F100D) in this hot seat can set the tone for the months ahead, and the F100D of a new role can be stressful;

How bad are things? What are the expectations of me? Will I fit the culture? Do I have what it takes to do the job? Can I win support to make the changes required?

These are all natural questions and concerns which are only amplified by the changing role of procurement, the ways in which it supports the organization, and what it takes to lead this complex function.

In this post I will attempt to answer for the first time the following questions:

Why is the F100D particularly difficult for purchasing leaders?
What tensions exist in the F100D?
How can purchasing leaders mitigate these tensions?
How can purchasing leaders pre-plan for F100D?
What should purchasing leaders do in F100D?
1. Why is the F100D particularly difficult for procurement leaders?

In a today’s economy where competitive pressures have intensified to new levels, getting off to a good start in a new job is critical. New procurement leaders in all sectors must demonstrate that they can integrate and deliver quickly in their new positions.

The new CPO is required to develop a corporate procurement strategy, build a procurement team, and establish strong governance. They do this by setting policies, procedures, defining procurement responsibilities, metrics, and devising a plan for aggressive savings and added value. Obtaining executive approval, senior management buy-in and securing the resources to accomplish these ambitious targets represents a monumental challenge.

2. What tensions exist in the F100D?

In situations where other functions are currently legitimately conducting procurement task, procurement is functionally aligned, and these functions may be sceptical and reluctant to let responsibility go. In such situations, new CPO’s have the opportunity to take full ownership and accountability for all procurement strategy, tactics, supply markets and procurement capabilities. But based on their unique circumstances they must find a balance, among the challenges they find, the strength of their mandate, resources in place, and the unique cultural environment of the organization.

CPO’s must, therefore, balance three distinct arena. Firstly, evaluating, building and then implementing purchasing resources. Secondly, simultaneously developing and focusing the role of the purchasing function, and thirdly, trying to assess and also address the particular business situation. Each carries its tensions.

CPO’s must consider the nature of the business situation he/she is facing. There is likely to be a tension between the short-term fix and the long-term gain. It all depends on what you inherit. If things just aren’t working, you have to make decisions quickly. If all is well, it is unlikely to be a wise move to make a significant change early.

Further factors may include the CPO’s character, and the corporate culture they are entering. While a CPO’s character (experience, skills, personality and networks) is their greatest asset, it can only be utilized within the confines of the corporate culture – which is always stronger than any CPO.

3. How can purchasing leaders mitigate these tensions?

The F100D challenge is, in many ways, just a special (but more intense) case of any leadership situation, where success depends upon adaptation and managing change. It is why you were hired, to bring about change. In any change scenario, there will be supporters and sceptics.

Success comes from managing the tensions that exist in the process of getting the supporters and sceptics to work together to achieve your plan. In managing these tensions, remember – Not every change is for the better! The past has value, and it will continue to have value. At the same time, the past shouldn’t have an automatic veto. We need to take the best from the past and best from the future to forge our plan.

Somewhere in the struggle for the best strategy you will need to keep the supporters and the sceptics talking together to get the best out of both. Neither has a stranglehold on the truth! As CPO, you must value and learn from both groups. What is worth holding onto from your organization’s past? What needs to be let go of to move forward? Don’t always view sceptics, in a negative way and remember sceptics help keep you rooted in reality. Your job as CPO is to unfreeze the status quo before you sell any change.

4. How can purchasing leaders pre-plan for F100D?

Well before the F100D, a new procurement leader needs a thorough assessment of their own ‘fit’ to the role, and a plan to gain early successes and team engagement. It requires a pre-plan to negotiate resources, gain current state insight and start assessing the quality of procurement resources and their effectiveness. The first task, however, is an honest self-appraisal that should identify gaps in readiness for the task ahead. The organization appraisal should assess its key challenges, the capabilities of the existing procurement team and understanding the corporate culture in which it operates.

The F100D is undoubtedly a challenge, but with a clear approach and operational framework in place, it can be a chance to create lasting impact and goodwill across the organization.

5.0 What should purchasing leaders do in F100D?

Taking charge of the top position in procurement must be one of the most thrilling moments of any purchaser’s career. With the new status comes a sense of achievement and new responsibilities, and unfortunately a high risk of failure. Experience tells you that you have to make a good start, but exactly what do you need to do and how do you need to do it? All you know is that you need to do it soon, and armed with a preplanned strategy, you should be ready to hit the ground running. Don’t take a honeymoon period.

5.1 Setting the Agenda

There are three primary strategies to consider:

Evaluating the current situation
Change everything
Business as usual

The right answer is a combination of all three, naturally; it all depends on what you have inherited. However, whatever the situation in your early weeks, you should also have the following goals:

To build good relationships, especially with your boss
To establish your credibility and image with the people who matter
Perform well

Don’t try to tackle too many issues too soon or determine the strategic agenda in isolation. It is crucial to develop a broad plan with the involvement of critical stakeholders and to spend time generating buy-in.

Evaluating the current situation:

If there is no current crisis, then the right way to start is to become an observer and a student of your new environment. In other words, stop and listen. Don’t try to fix what isn’t broken. Your goal is to build a function that is fit for purpose, so don’t make assumptions, successes cannot simply be carried from one organization and implanted into a new organization. You must establish what the problems are using both fact-based data and the views of influential stakeholders, to determine the requirements of the purchasing function.

Go out of your way to getting to know what is good and bad about your new organization. Meet with board members and senior stakeholders and ask questions. The questions you ask should provide you with a starting point for prioritizing the things you need to do and the things you want to do. For example:

“If you were me, what would you focus attention on?”
“What do you want to keep?”
“What do you want to change?”
“What do you want me to do?”
“What are you afraid I’ll do?”
“What else do you want to ask me?”

The questions you ask need to give you the knowledge that will enable you to create the future state strategy that will make you successful. We need to take lessons from wherever they come, including the sceptics:

Listen to sceptics, as most have legitimate concerns about the organization that you are inheriting. Value the past and keep what is good.
Commit from the beginning to act on what you learn. Even if you have to change the look and feel of your organization, do it.
Don’t try to win arguments about debates that occurred in the past. Asking people to change their views about the past is the same as asking them to admit they are wrong. Show them the future so they can focus on what’s important.

Change Everything

But, what if there are problems when you enter the organization—problems that can’t wait months to resolve? Remember, they looked long and hard for you because you had something they needed in the organization. Now is when you get your hands dirty and become an instant part of the fix. In other words, go deep toward understanding the issues. Attend meetings you wouldn’t normally attend and work closely with the hands-on folks. Use the phrase, “At my last company we did it this way” sparingly because it gets old fast. It is also the time to use all of your expertise and experience to analyze the situation and make decisions. Remember some of your best decisions are made before you have all the facts because you instinctively know what needs to be done. Take copious notes so that when the crisis is over you know how to prevent it from happening again.

It is also a great time to see what process and/or procedures are in place and how they affect the outcome.

Business as Usual

It is seldom the way to go. If the people that hired you wanted business as usual, would they have hired you? Understand that you are bringing ideas and methodologies that you have picked up over time. Now is the time to leverage them and create workable solutions. Everything that gets fixed isn’t necessarily a problem, however: Creating efficiencies or cost effective solutions for things that aren’t broken can contribute as much as fixing broken processes.

Once you have determined the most appropriate primary strategy, the following secondary strategies should be your main focus:

5.2 Learn the culture and the way of doing things.

Learning about the formal and informal culture of the organization is vital. Learn by asking questions and observing how the system works. Get a feel for the ways in which the culture is going to support your vision by absorbing all you can about:

Corporate strategy, understand their mission and corporate strategy
Corporate culture, establish which values and attitudes to emphasise so you can adapt your working method.
Organizational goals, find out about goals or statements of intent on areas such as customer service, product quality, market positioning.
Products and services, whatever your role, you need to know the range and market position of products or services which will affect your organization’s performance.
The hierarchy, establish, both formally and informally:
Who sets the pace
How decisions are made and who makes them
How problems are solved
What the real power structure is
Is it important that you appear decisive early on? Or will it be more appropriate to spend time listening?

If you rush in to make changes without understanding these issues, you may be perceived as a threat to the organization.

5.3 Manage Expectations:

As you get to understand the culture, think carefully about the kinds of expectations you want to create and make sure you will be able to deliver them later on:

Setting Expectations

Expectations are set by all kinds of events. Something you said or did, or even the way you said it, something somebody else said or did. It’s important to know that expectations, rational or irrational, valid or invalid, are not developed in a vacuum.

Capturing / Monitoring Expectations

You can’t know what the expectation setting is unless you actively search for it and continue monitoring it. You might even have to test it, to see how it’s set by dropping hints and clues of your next steps and watching how different stakeholders react. You cannot manage expectations unless you monitor them. That requires listening to stakeholders and understanding them.

Influencing Expectations

Once you have pinpointed the expectation and you know the source, the next challenge is to influence the expectations of others. This is what our managers usually meant when they said “manage their expectations.” Often they overlooked the setting and monitoring components and expect you to “talk your way” out of anything. But it’s so hard to talk your way out of anything unless you address the root causes.

Managed expectations drive your success.

5.4 Communication strategy

It’s important that all procurement leaders implement a communications plan from the start. Good communications between procurements internal and external audiences are vital to success. It requires strict planning of what and how you are going to communicate in order that people can understand what you are proposing to do, the rationale behind it and what it means for them. In the absence of such a plan people will fill the communication void with rumour and speculation, which is certain to be less favourable than your version. The following list covers the main stages in developing your communications plan:

Determine your communication objectives
Determine your key messages. What and how much are you going to communicate?
Who is your audience? Consider all your stakeholder groups (primary and secondary) and think about what drives and motivates them.
What is the appropriate medium for your message for each group?
Consider the timing of delivery. Is it different for different groups?
Call on internal expertise. Your communications plan should be drawn up in consultation with the PR department, at the draft stage, also include consultation with the board; ask for their views and seek their formal approval.

A communications plan forms the foundation on which the CPO’s results are shared and marketed. Also remember less obvious soft issues such as yours and your staff’s behavior, the style of dress, the presentation of documents, and even how you physically organize the office.

5.5 Understand your job and what’s expected of you

The selection process will have given you an insight into what your responsibilities will be and your reporting structure. However, initial impressions from interviews are rarely fully accurate or complete. Early on – ideally within the first four weeks – you will need to clarify:

Your precise responsibilities
The expectations of your superior and any other senior staff whose objectives you are supporting
Your budgetary and management responsibilities
The current structure of the procurement function and its place in the organisational hierarchy
How is the procurement function is perceived within the organisation
Lateral lines of responsibility and liaison
Key internal customers and suppliers with who you need to establish effective working relationships.

5.6 Establish your performance measures and targets

You are likely to operate in a performance review system, where you are set or agree a series of objectives with your boss. It is important that you are given clear parameters and targets to channel your contribution effectively. If you are not given any specific targets in the initial period, you should agree with your boss:

Your key job functions – the areas where you will make a significant contribution
A series of measurable objectives that you regularly review (e.g. how you contribute to the overall profitability and development of the organization)
The measurement criteria for you and procurement (so you can check that your performance targets are realistic and achievable)

If your organization does not set objectives or targets, set yourself a series of similar goals to work towards and discuss them with your boss. They will also help you to monitor your progress.

5.7 Consider your training needs

From you pre-planning you should have identified the gaps in your experience or skills that you need to fill. It should include both technical training, which your employer is more likely to provide, and ‘softer’ training in management and interpersonal skills. Draw up a training plan that will address your needs and act as a framework for your personal development.

5.8 Stakeholder Strategy

It is important to develop an understanding of the values and issues that stakeholders have, in order to address them and keep everyone involved in your plans for procurement. If your plans do not have the necessary support from those in positions of power, providing resources and those who will be directly utilizing your services, it is unlikely to be successful. The creation of a coalition of interest and support for your plans is important, so establish key personal relationships quickly:

Your team

Getting the team right should be the priority for a new CPO. Find your key players quickly and then build the support team. The quickest route to failure is not having the right resources, so assess resources early and address the shortfalls.

The composition of your team needs to address two aspects, ensuring that you have the right complementary blend of:

Competencies and expertise
Blend of personalities

As a newly appointed leader, you need to have, and communicate, with crystal clarity the specific role and contribution of each team member. You will probably find your new team welcoming and supportive. However, if you are replacing someone they particularly liked, they may be suspicious and uncommunicative. Stay positive and allow time to get to know each other.

Senior management team

Other senior people in the organization will be central to your success. Find out how they work and what they expect of you. Get a feel for the internal politics and those that hold disproportionate power. Your first meetings will be important. If asked for your first impressions don’t go into too much detail too early, be constructive – don’t demolish the ideas of a potential ally. What each senior stakeholder needs to know is that the CPO recognizes their point of view and has clear ideas about where improvements may be possible. This influential group can be critical to success; once you have lost their confidence failure is never far behind.

Your boss

Establishing an effective working relationship with your boss is one of your main priorities, and now that you have some data points you can have a better, more detailed discussion on what your focus should be. Quickly pick up his or her working style and see how you can adapt yours to meet his or her needs and expectations. Look back at the information you need to establish about your job. Be proactive in planning some goals and setting an agenda to discuss with your boss. Fix a date for an early review.

Internal stakeholders

Collaboration is critical. A proactive, collaborative approach with key stakeholders is a key strategy. A passive approach will not work. Take control by developing a formal stakeholder management plan for key players. Who are they, what power and control do they have influencing their ability to support or block your ideas. Build alliances with those you need, and those who need you. Develop plans to neutralize the power of those who oppose you.

External Stakeholders

Any leader needs a network of alliances, and these alliances become even more important in procurement, where establishing and maintaining good relationships with supply partners is crucial. While the internal resources should come first, it makes absolute sense to review your external resources. The objective is to exploit their capabilities and link them to your objectives.

Consultants, non-executive directors, etc. can offer valuable support. But be strong enough to accept whatever help you need to get the job done. Try to find a mentor who can give you valuable support.

Get yourself known

Take steps to make your-self known. Use your networking skills to establish key contacts in other divisions or organizations and try to draw out what their priorities are. Invest in your relationships with external suppliers too.

Conclusion

Your F100D will tell your new company what you are all about. It is also the best time to introduce change because that’s what you were hired for. Your new role presents you with great opportunities. A strong F100D programme sets the stage and builds firm foundations for sustainable career success. However, this period is by no means a guarantee for your future. The key is to listen, learn and review the situation and modify your behaviors from time to time.