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The Leadership Imperative
October 11, 2007

Companies that have successfully transformed their supply management activities into world-class performers have paid attention to six key dimensions of transformation.

As shown in the Figure, those dimensions are Procurement’s Role, Objectives, Leadership, Organization, Best Practices, and Innovation and Technology. Underlying these six dimensions are more than 30 specific initiatives that ultimately comprise a comprehensive transformation plan. 

Over time, we’ll be touching on many of these initiatives, and related topics, in this blog.

Depending on your starting point, it may be impractical to try to advance all 30 plus initiatives from the very beginning of your transformation effort. What you need is a roadmap that takes into account where you currently are (the so-called “as is” state), and establishes a logical sequence of new initiatives that build on each other. There is some art and some science to constructing such a roadmap.

You might wonder: why not keep it simple and focus on one theme, e.g. strategic sourcing? Some companies have done just that, focusing on just “strategic sourcing,” as their path to glory. Often, after an initial flurry of quick wins, those companies have seen their results disappear, as the program failed. Why? Such single-focus programs often lack the necessary pillars of support for a successful, sustainable transformation – the six dimensions or pillars shown in the chart.

Before you can even start to construct the transformation roadmap you’ll need a leader willing to sponsor this entire transformation process. The logical place to look is the head of procurement or supply chain management. If that person is not comfortable in a leadership role, then you’ll need to look elsewhere. It’s a sorry fact that not enough people are comfortable in leadership roles. (As an aside, Lee Iacocca’s new book, “Where Have All the Leaders Gone,” is a great read on this subject.)

Simply stated, the transformation leader has to be willing to propose change, and put his or her neck on the line. Let me explain what I mean. First, they will need to develop a bold vision with stretch objectives that relate to the interests of senior management. As mentioned in an earlier blog, this must be communicated in the language of the executive suite. The transformation leader must be willing to lay out a specific transformation plan and roadmap, with concrete milestones (achievements, not just activities).

Fundamentally, the transformation leader must be willing to construct a business case that offers a performance commitment (i.e. $ X million of new cost reductions to the bottom line in each of the next few years), in exchange for the executive support (budget, people and tools/systems) needed to make it happen. Without that show of confidence and commitment by the transformation leader, why would the rest of the executive team be willing to commit people and budget to the effort?

When I was a corporate CPO, I did exactly what I’m describing – and it made a huge difference. It also helped to create the excitement and commitment within the organization needed to energize such a transformation effort.

Believe it or not, once you’re willing to go down this path, once you are comfortable with the leadership imperative, the rest is easier than it might seem.


(note: the Figure is excerpted with permission from the book “Straight to the Bottom Line®, J. Ross Publishing, 2005. See www.StraightToTheBottomLine.com)

Posted by Robert A. Rudzki on October 11, 2007 | Comments (0)