new cpo - the first 100 days

©ALL RIGHTS RESERVED - Confidential

Real World Sourcing Spend Matters UK/Europe

New CPO – The First 100 Days


Guy Allen November 20th 2013




Part 1 – Introduction

The Real World Sourcing Series is a series of 6 sessions covering hot topics for procurement professionals.

The Real World Sourcing Series is promoted and supported by Tejari and developed by Peter Smith (Spend Matters) and Guy Allen (Real World Sourcing Limited).

Guy Allen started his procurement career with Ford Motor Company, moving through IBM, SmithKline Beecham and GSK before becoming CPO for Abbey National and VP Global Sourcing at Fujitsu before joining 4C as a Managing Partner. Guy has since left 4C and started his own consultancy, Real World Sourcing Limited.

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Agenda

1. Before you start

2. First day

3. Following an Action Plan

4. Strategic Mandate

5. Advantage of a new boy (or girl)

6. Stance

7. Summary




Situation Analysis What is going on and what is important

Implement quick wins/fixes Early action, demonstrating effectiveness

Establish Vision/Direction Alignment of team

Deliver Strategic Proposal CEO/Board mandate for change




Before you take the job

• What Does Success Look Like?

– For your boss

– For the organization

– For you

• Support for change

– Willingness to address poor performance

– Redeployment

– Resources for training

– Consultancy support

• What are the Organization’s key strategies?

• Advocacy for the role/change




Before you start

• Meet the Incumbent

– Understand Challenges

– Competing Departments

• Gather data

– Current processes

– Spend data

– Customer surveys

– Employee Opinion Surveys

– Glass Door

– Audit reports




Before you start (cont)

• Meet with industry peers

– What did they do?

– Did it work?

• Draft out action plan

– Circulate it to the new boss




Task 1 - Organizational Style

The style and culture will differ between various organizations. Consider a

– Defence contractor

– Fashion clothing manufacturer

– Public Sector

– Global food producer

• What might be the key management style differences between the organizations?

• How might you change your approach to each organization?

Discuss on your tables and feedback your answers




Key Stakeholders Key Categories

Set Expectations Establish process checkpoints

Days 1-30

Developing the Action Plan

Team Capabilities Establish Vision

Re Organize Establish targets

Days 30-60

Technology Requirements Processes Mandate

Days 60-100




First Day

• Make your first day a Thursday

• Get the admin sorted

– PC

– Access

– Mobile Phone

– Business Cards

– Arrange Meetings

Ready to start with energy on Sunday




The Action Plan - First 30 Days

• Meet Key Stakeholders

– Listen! What are their drivers?

– Supporters or blockers?

– Talk about what you need of them

– Address any perceived threats

– Summarise meeting back to them

• Understand the spend profile

– Key Categories

– Key Suppliers

– Key budget holders

•Organizations view of Procurement •Get the change message across •Get them onboard

•Prioritisation of actions •Identify key areas of risk



Taking on a New Category

Current Situation - Kraljic Matrix (adapted)

Low High

High

Magnitude of spend

Sup

ply

ris

k

Critical Strategic

Acquisition Leverage

Collaboration - close supplier management:

• detailed contract • collaborate • market awareness

Drive for value:

• market pricing • aggressive approach • use leverage

Minimum attention:

• price formula • call-off contract • look to rationalise

Ensure availability:

• long-term contract • price indexes • contingency planning




The Action Plan - First 30 Days (cont)

• Identify Quick Win – Ideally eAuction

• Establish Governance – Prior to full assessment, implement

simple governance from day 1 (eg CPO to review all contract over $xk)

• Early credibility

• Control • Visibility




The Action Plan - First 30 Days

• Meet all of Direct Team

• Set Expectations

– Be unequivocally clear!

– Immediately address any dysfunctional behaviour

– Promise a supportive working environment

• Win Hearts and Minds

– Role is impossible without the team

– Alignment to common direction

• Approachable • Feedback on colleagues

• Promise to address non performance • Organizational effectiveness • Good place to do ‘good’ Procurement

• Team become advocates and ambassadors internally and externally




The Action Plan – 30 to 60 Days

• Team Capabilities

– Work with team to assess current staff informally

– Identify skill and capability gaps

– Plan training programme to address gaps

– As

• Re Organize

– Redesign organization structure to meet business needs

– Use Re-organization as a means of addressing capability gap days

• Shared view of individual capability • Identification of skill and capability shortfalls

• Team aligned to deliver against organizations strategy • Non performers re deployed




The Action Plan - 30 to 60 Days (cont)

• Establish Vision

– Describe the journey and destination

– Invite team to join you

• Build targets

– Implement quick win

– Establish what is possible

– Set objectives to meet targets

• Shared view of target and journey • Fully aligned procurement

• Procurement clear on what success looks like • Team motivated and rewarded to deliver




The Action Plan - 30 to 60 Days (cont)

• Meet Suppliers

– Start meeting with ‘top 10 ‘suppliers

– Understand your organizations position in their priorities

– Establish what you do that makes them inefficient

• Success can only be achieved through the supply base • Establish which are willing to work with you and which represents an exposure




The Action Plan - 60 to 90 Days

• Technology

– Understand available technology and what needs updating

– Priorities with short term gains as opposed to 1 year implementations

– eAuctions and Spend Data are two obvious short term possibilities

• Understand Processes

– Purchase Order/Governance Process

– Risk process

• Clear Roadmap of what you have and what you need • Identification of investment required

• Establish the gateways for purchasing decisions • Identify and address key supply risks




The Action Plan – 90 to 100 Days

• Write the Strategic Plan!

• Socialise Proposals

• Obtain Board/CEO Approval




Strategic Proposal – Key Elements

• People Plan

• Governance

• Targets

• Resource Required

– Training

– Technology

– Consultancy




Approach

• The first 3 months in an organization presents a unique opportunity

• Key to make the most of this window as it closes very quickly




Advantages of a New Boy (or Girl)

• Ask naive questions

• Implied senior management mandate

• Be challenging

• Agent of Change

But Beware

• It doesn't last forever

• Some will see you as a threat




Stance

• Assume you have the Power to make things happen

If you think you’ve got it, you’ve got it

If you don’t think you’ve got it then even if you have got it then you haven’t




Task 2 ‘We asked newly appointed CPO’s which were their key priorities in a the role and they said.........’

On your tables agree the most popular response from those we interviewed

Guess the priority that you feel would have the most people identifying it as key

Score points = to the percentage of people who selected that priority!

Prize for the winners




Situation Analysis What is going on and what is important

Implement quick wins/fixes Early action, demonstrating effectiveness

Establish Vision/Direction Alignment of team

Deliver Strategic Proposal CEO/Board mandate for change



Real World Sourcing Scholarship

• 10,000AED towards any procurement based training

• Go to StrategicSourcing.ae with the URL you will receive tomorrow by email

• Complete the certification programme

• Answer as many questions right as possible

• The winner will be announced at the end of the series!





THANK YOU!

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