Are CSCOs prepared for tariffs?

The whiplash chief supply chain officers are feeling from tariff announcements is reverberating among the community, with only 15% of CSCO’s surveyed by Egon Zehnder feeling moderately prepared to handle their impact.

More than seven-in-ten respondents (72%) identified cost pressures as their biggest challenge. Tariffs only add to that pressure. Those are just two of the highlights from the recent Chief Supply Chain Officer Insights survey conducted by the advisory firm.

“The chief supply chain officer (CSCO) has progressively become a cornerstone of a company’s success. The ability to bring products to market swiftly and efficiently in the face of complex geopolitical and economic challenges, rising customer expectations, and the ongoing digital revolution have placed the CSCO at the heart of corporate strategy,”
 the firm wrote in the introduction to the report. “However, this evolving role is not without its challenges. As CSCOs face an extraordinary combination of factors—from trade disruptions to technological advancements and climate change—what is emerging is nothing short of a ‘perfect storm’ in supply chain management.”

The survey found that 72% of CSCOs report directly to the CEO and 84% are male. The majority—58%—have at least 25 years of experience.

Top motivators

According to the survey, what drivers CSCOs is the challenge of the job. Eighty-one percent said their primary motivation was driving transformation/turnarounds, while 57% said they were motivated by the complexity of the challenge. Just more than half (51%) cited career/personal growth as a motivating factor.

Interestingly, the people and organization did not receive high marks, with only 25% saying the company is a primary motivation, and 22% citing the compensation package. The team they work with was cited by just 9%, as was the line manager, also named by 9% of respondents. Only 7% said the job location was a big motivating factor.

“Our findings indicate that these CSCOs are primarily motivated by the opportunity to drive transformation or turnaround initiatives, tackle complex challenges, and achieve career or personal growth,” the report noted. “While compensation or location were important, these factors were much less significant for CSCOs. This was reflected in interviews, where CSCOs described their decisions to change organizations in order to face new challenges and tackle more complex problems.”

Top challenges

When asked the top themes impacting their businesses, the CSCO’s responded with cost pressures as the top challenge, cited by 72% of respondents. The remaining list included:

• Customer demands (46%)
• Stakeholder expectations (38%)
• Sourcing/materials complexity (35%)
• Technology (32%)
• Regulatory environment (19%)
• Geopolitics (15%)

“The comparison between what CSCOs consider top priority and where they actually spend their time provides valuable insights—and raises some questions,” the report noted. “Unsurprisingly, CSCOs prioritize and spend most of their time on building operational excellence, driving cultural change, and managing board/shareholder relations. However, building commercial advantage and anticipating and adapting to future challenges seem to receive far less attention than they warrant.”

When asked their top priorities, the top items on the CSCO list were:

• Operational efficiency/costs (40%)
• Board/shareholder expectations (31%)
• Driving culture change (29%)
• Building commercial advantage (28%)
• Anticipating and adapting for future trends (26%)
• Digital transformation (25%)
• Talent acquisition and development (22%)

“Another interesting anomaly emerges with driving cross-functional initiatives: While only 13% of CSCOs consider them a top priority, 25% rank them among the most time-consuming activities. Do these insights suggest a mismatch between the skills required and the expectations placed on CSCOs?,” the report asked.

CSCOs are also spending a majority of their time on other tasks, with 50% citing operation efficiency/costs, and 35% on board/shareholder expectations. Only 18% said digital transformation was consuming most of their time and just 4% said building commercial advantage.

Survey participants were also asked to identify three to four of the most strategic initiatives they’ve initiated in the past two years. The most popular answers were culture/organizational change, people and talent, digital transformation and technology integration, operational efficiency and excellence, and strategic sourcing and cost management initiatives.

Asking for help

“When reflecting on their current and future business priorities, most CSCOs highlighted the need for building new capabilities in anticipating and adapting to future trends, championing their organizations’ digital transformation, and driving cultural change,” the report found “CSCOs from larger organizations emphasized the challenges of managing operational efficiencies, risks, and stakeholder relationships as their global footprint presents extra geopolitical and organizational complexities. Meanwhile, CSCOs from smaller organizations reported facing greater pressure to accelerate talent acquisition and management, build commercial advantage, and pivot their strategic direction.”

When asked for areas were more support was needed, anticipating and adapting to future trends was identified by 41% of respondents. Digital transformation was a close second at 37% followed by driving culture change at 28%. The rest of the top items:

• Talent acquisition and development (24%)
• Operational resilience (22%)
• Building commercial advantage (21%)
• Operational efficiency/costs (19%)
• Driving cross-functional initiatives (16%)
• Sustainability (13%)
• Managing risks/compliance (12%)
• Change of strategic direction (10%)

In interviews with some respondents, a theme of the possible emerged, but there were questions about how to get there. One interviewee noted they needed to find people that understood what is possible, while another noted the challenge of changing the thinking that technology is a silver bullet that will solve all the problems.

“Finding the right technology is the easy part; getting the people and processes to align with that technology is much harder,” they said.

Finally, the survey asked respondents what three things they would change internally for their organization to be more successful. The answers varied, but three general themes emerged: accelerating digital transformation and agility capabilities, improve team cooperation and ownership, and accelerating/improving leadership and cultural change.

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