The Leadership Imperative: A CPO’s View (Part I)

People can be divided into three groups:
Those who make things happen
Those who watch things happen
Those who wonder what happened

- Author Unknown

Leadership vs. Management

The subject of leadership, and how it differs from management, has been a favorite topic of mine over the years. Why? It's a key factor that distinguishes successful organizations from those that will ultimately fail.

There is a significant difference between leadership and management. Leadership is about successfully creating and guiding change. Management is about coping with complexity. Both sets of skills are important in guiding an organization to success, but it is the rare person who is good at both.

One of the very best books on the subject of leadership and management is The Leadership Challenge by Kouzes and Posner. If you have not read it, do so. It is a classic.

The authors outline a five-stage process:

*Challenge the process
*Inspire a Shared Vision
*Enable Others to Act
*Model the Way
*Encourage the Heart

The purpose in “challenging the process” is to establish the belief that challenging the status quo is not only acceptable – it is desirable. The idea behind “inspiring a shared vision” is to develop excitement about where the organization is heading, and what management is trying to accomplish. “Enabling others to act” is about providing the support mechanisms that enable employees at all levels to succeed. The idea of “modeling the way” is to illustrate, through appropriate examples and small wins, the behaviors and results desired. And “encouraging the heart” refers to reinforcing the right behaviors and results and demonstrating positive consequences on a personal level.

Clearly, when understood in the above terms, leadership is all about transformation. And, there is a big difference between “leadership” and the day-to-day “administration” or “management” of activities. Most CPOs, and their organizations, seem to be consumed by the day-to-day tactical activities, leaving inadequate time to focus on, and lead, strategic initiatives.

Change the Game: Grab Control of Your Future

Shifting the procurement department from being tactically-consumed to strategically-focused can be a defining journey for a company. It can literally make the difference between a company's resounding success or ultimate failure. So, how do you – as leader – get the ball rolling in the right direction, at the right speed, and with sufficient resources?

Industry studies and research white papers make interesting reading, but they often aren't sufficient for obtaining senior management buy-in and additional resources. What is most useful is to develop a candid current state assessment, a desired future state description, a comprehensive transformation roadmap and business case, all specific to your company as outlined below. Done properly, this can shift the situation from: (a) battling for a small piece of your CIO's current IT budget pie to justify some new tools, to (b) successfully obtaining an entirely-new corporate budget allocation to support a well-thought-out, comprehensive transformation plan (of which technology is just one component).

What's involved in creating a first-rate procurement transformation roadmap? It starts with an independent, candid and comprehensive comparison of the “current state” at your company versus “best practices” in supply management. That provides input to an opportunity assessment, as well as input to constructing a roadmap that is tailored to your company's situation – and to your desired speed of advancement. In my experience, I can tell you that sequencing the roadmap elements is part art, and part science. Finally, a credible business case is developed which wraps it all together: what you are proposing to do, how you are going to get there, the $ results over the next few years, and the requested internal and external resources to accomplish the transformation.

Done well, this Assessment and Transformation Roadmap process creates executive understanding, excitement, and support (budget and otherwise). Believe me, this really works well when done properly. I say that as a former corporate finance guy who became a successful CPO at several companies (and obtained all the executive support you could wish for). In the last few years I've helped clients do the same as their trusted advisor.

Tomorrow: Part II Dealing with the Pressure for Quick Wins

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