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The Organization Chart Diversion – Part 4
November 21, 2007
As I’ve suggested earlier, selecting and implementing the right organization design is not a casual exercise.
Regardless of which option ultimately proves to be the best for your situation, there are two additional organization-related techniques worth utilizing: an Executive Steering Committee, and a Procurement Council. The Steering Committee is typically comprised of senior execs, representing corporate functions and business units, and provides high-level oversight and support. In the best of all worlds, members of the Steering Committee also act as sponsors of individual sourcing teams. That can be a powerful message both internally, and with suppliers.
The Procurement Council is typically comprised of the CPO and the next level in the procurement organization. Done well, it can be a valuable forum for driving change, sharing best practices, assuring alignment, and spurring results. I’ve used the Procurement Council device as a CPO, and it proved to be an important supportive piece of our transformation successes.
The final question is: Should supply management report directly to the CEO? It’s not always productive reporting directly to the CEO, as one of my friends told me shortly after that happened to him. He started getting invited to lots of “staff meetings” unrelated to his job, and felt that most of those meetings simply wasted his time and took him away from his core responsibilities. The key isn’t what lines are drawn on the corporate organization chart, showing reporting relationships. The key is access. The CPO should have regular and easy access to the executive suite, and to the heads of the business divisions.
Posted by Robert A. Rudzki on November 21, 2007 | Comments (3)
In response to: The Organization Chart Diversion – Part 4
Buyer commented:
My CPO does not lead the Procurement Council and only participates when asked to present a topic. His claim is that he does not want to inhibit the discussion or cause members to be shy or hold back. This is a huge problem in my opinion, as he is missing out on the information exchange and hearing directly from procurement leaders in the field.
In response to: The Organization Chart Diversion – Part 4
Robert Rudzki commented:
In response to the comments from "Buyer": It sounds like your CPO is more an "administrator" rather than a leader. Do you think he understands the difference? (We'll cover that topic in a future column.) And, perhaps more importantly, whose fault is it that a non-leader was placed in a leadership role? The person who was put in the job, those who placed him there, or both?
In response to: The Organization Chart Diversion – Part 4
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