Today’s SC Leader, Tomorrow’s CEO
Supply chain leaders are increasingly coming to the attention of boards, investors and analysts, says UT’s Shay Scott.
September 9, 2015
A decade ago, most supply chain leaders were focused on functional operational issues within their own areas of the supply chain such as procurement, logistics, or manufacturing operations. The C-suite was several managerial levels removed, making direct communication rare. Cost cutting was often seen as the major value that supply chain could provide to the business.
The supply chain profession has since transformed itself from those disparate functions into an integrated amalgam, and in doing so, raised its prominence to occupy the minds of corporate boards and the attention of Wall Street investors and analysts.
Notable supply chain leaders such as Apple’s Tim Cook and GM’s Mary Barra have risen through the ranks to lead their companies, and this trend at least anecdotally appears to be increasing. Supply chain leaders undergo excellent development for top leadership roles through the normal course of doing their jobs. They must not only deliver customer value profitably but also work almost every area of the business to do so—customers, suppliers, sales and marketing, finance and senior leadership.
Gartner has called this balanced approach between growth and efficiency the ‘bimodal supply chain’ and has noted how top companies seem to excel in its practice. While achieving this bimodal balance keeps many supply chain leaders in a continual state of anxiety, it does prove to be excellent development for senior leadership positions. Increasingly complex operations and more geographically distributed global footprints only improve the development of supply chain leaders for the jump to C-suite roles.
The notion that customer service or the supply chain itself often has more importance than the product – think of Amazon - only serves to further emphasize the value of supply chain expertise in senior leadership. In addition to delivering results and forging a balance between growth and efficiency using the bimodal approach to supply chain, what else should supply chain leaders consider to best develop for a C-suite role? These three things will maximize success:
- Communicate like a CEO. Supply chain leaders tend to speak in terms such as inventory, fill rate and purchase price variance. Instead, consider how your organization delivers value in the marketplace. Speak in terms of the financial impacts (revenue, margin, working capital, free cash flow) of a course of action. Do not expect board members and investors to appreciate you unless you can speak their language.
- Think like a generalist. Supply chains and businesses are driven by political, social and macroeconomic impacts. Your supply chain should anticipate and proactively address these types of issues in addition to the more familiar operational ones. Focus on the big picture and become well versed in global politics, economics and social trends. Use this to proactively position your supply chain for success.
- Connect people like a matchmaker. Supply chain leaders have the luxury of regularly communicating with people from all aspects of an enterprise. Develop the deliberate habit of connecting people and bridging relationships. Your connections will deliver value that would have otherwise gone unrecognized. Connect the customer who needs something directly with the product development team. Tell the U.S. sales team about the innovative approach the Chinese sales team is using for success.
After 40 years of intense specialization where we have all become experts in narrow functional areas, the pace of change and connectivity of today’s businesses seem to be signaling the need for the return of business generalists. Supply chain leaders have a distinct head start to be those generalists, so use this for the advantage of your business and your career. Who knows, maybe that will lead to you to the opportunity to be the ultimate generalist, the CEO?
Shay Scott, Ph.D., is the managing director of the Global Supply Chain Institute and Executive MBA for Global Supply Chain at the University of Tennessee’s Haslam College of Business. He has significant industry experience at Dell and Honeywell and holds degrees in business, engineering, and education.
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