14 May 18

Can CPOs sell their way to into the CEO’s chair?

Can CPOs sell their way to into the CEO’s chair?

By Alan Day, Chairman and Founder of State of Flux

On the face of it, CPOs are ideally positioned to reach the top spot in any company. They work with all business functions, have an insider’s view of business drivers, understand customer value and have a hard nose for negotiations. All are valuable assets when vying for the CEO’s chair.

Earlier in my career, leading in-house procurement teams and working as a consultant, I never understood why we didn’t see more CPOs becoming CEOs and it wasn’t until I started State of Flux that it began to dawn on me. I see the reason even more so now that we have put in place heads of regions to run our business Europe, the US and Asia Pacific. Having to recruit for these roles reinforced my thinking.

Procurement is a great function to gain a breadth of business experience. We get to meet lots of supplier CEOs and talk with them about the strategic alignment of our businesses and how we might work together. We get to understand how the organisations works operationally, we network at a senior level, run large teams and look after big budgets.

But there’s one, rather large, problem: CEOs need sales skills. While procurement is an important function, it never really has to sell. Sure, we do, in a sense, sell. We get people to invest their time in our approach to procurement and trust us to help meet their business goals through our work with suppliers. We sell business change within procurement, and so on. Sometimes these things are tough to sell, but they are nothing like as hard as getting another company to part with hard cash, or convincing banks or investors to provide capital.

For the business, selling is the difference between life and death. If you don’t have revenue or access to capital, then you don’t have a business. It is why sales people are always focused on closing deals, I love the phrase, a sales (wo)man ABC’s – Always Be Closing. It is the reason they are obsessed with the speed of response to sales leads, managing the sales funnel and countering objections. It explains their obsession with the powerline: the point above which management holds budgets and can make purchasing decisions.

Where can procurement leaders gain sales skills to strengthen their case as a contender for the senior roles outside the function? To start with, account management is one thing both sales and procurement do (well, purchasing should do it). Done correctly, supplier relationship management (SRM) offers experience of creating joint account planning which, from the other side of the table, is an essential part of selling to existing customers.

The more you get into SRM, the more it can help nurture skills for the wider business. Through managing relationships with the right suppliers, in the right way, it is possible to uncover opportunities to generate revenue, by working together on research, combining marketing resources and even forming joint venture companies. Procurement professional who can demonstrate their strengths in heading up these projects may even get the chance to lead a resulting JV, learning about access to capital and working with investors, as well as selling to other businesses or consumers.

There is a path from procurement to the CEO position. But the journey involves building experience in selling, as well as buying. SRM offers the first step on the map to help chart the right course.

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