CPO Crunch: Just add R&D
Procurement Leaders | A World 50 Group Community
Accelerated transformation starts here
A few weeks ago, a LinkedIn post from one of our members provided a tantalising and hopeful glimpse into the future.
This might be a bold claim but when Amanda Davies , Chief Procurement & Sustainability Officer at Mars Wrigley , announced that she was adding R&D to her remit to become Chief R&D, Procurement & Sustainability Officer, it provided a welcome reminder of the opportunity we have as a function.
Amanda is only one individual working for one organisation but, as a statement of how procurement’s role might evolve in the coming years, it was powerful and logical. And here’s why.
First, procurement sits at the centre of the value chain and CPOs have a privileged view of both customer need and upstream capability. At the same time, high-impact procurement teams are close allies of their business stakeholders, bringing their needs into the crosshairs of the right partners.
This brings multiple benefits – not least potential access to third-party investment dollars, as well as improved agility, faster decisions, and a greater degree of trust.
In short, key suppliers and partners become extensions of the enterprise; and the power of applying that extended network with internal capability to solving sustainable growth projects is an intoxicating prospect.
There’s no doubt that it’s the CPO who is best positioned to lead this.
Second, having R&D, sustainability and third-party spend under a single leader enables longer-term thinking and the development of strategies that can tackle some of the larger-scale challenges we face. By entwining the strategies of these functions into a holistic, ambitious, and long-term plan, real progress can be made on net zero, on supply chain redesign and on other critical business issues that require investment, patience and vision.
It would mean that organisations could make progress in shifting corporate thinking so procurement spend is seen as an investment rather than a cost; and that short-term, opportunistic, and savings-driven decisions are consigned to history.
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This in turn would mean that all procurement, sustainability, and R&D decisions are made on a total sustainable cost of ownership basis with the ultimate goal of delivering long term, sustainable customer value.
It’s a tantalising future, but one that Mars Wrigley has clearly acknowledged as an underexploited source of value. It goes without saying that we wish her luck.
Demystifying the ESG regulatory landscape
A recent Procurement Leaders CPO Connect Call explored the ESG regulatory landscape in both the US and EU, including contributions from Vandemoortele and DuPont. The conversation formed part of our ongoing ESG glide path work and highlighted the importance of cross-functional collaboration and supplier engagement to meet new requirements.
Over the coming weeks we will be exploring this issue in greater depth, culminating in the creation of a community output in the summer focused on examples of how members are gathering and utilising primary Scope 3 data.
Facilitator
9moTo work out why R&D, Procurement and Sustainability belong together you have to ask what they have in common. When you do, the surprise is why Procurement horizons are so restricted. (Actually it's because Procurement people self-limit their vision. But that aside, let's think about it.) Two sayings are reasonably well known: "Do I do what I always do or do I innovate?"; and "If it works it's out of date". Both are from Stafford Beer, regarding 'System Four' of his Viable Systems Model (VSM). Systems One to Three, and System Five of Beer's VSM are identifiable in any organisation. (I won't repeat them here.) System Four, - looking outwards to the environment to monitor how the organization needs to adapt to remain viable - is not. It is vanishingly rare due to the inward focus and short-term horizons of staff and job roles. That is what R&D, Procurement and Sustainability have in common. They look outwards. It's simple really, once you see it. Unfortunately it does not change the self-limiting outlook of most Procurement people, but it seems we cannot do much about that.
Strategic Advisor/Analyst Specializing in Emerging AI Tech, Sales and Marketing (Procurement) - A Trusted Voice in procurement and supply chain
9moGreat post, David Rae. I made reference to it in an article I wrote about negotiation - https://bit.ly/3Iy1y05 It seems that both Amanda Davies and Shauna Gamble share similar thinking regarding the expansion of procurement and supply chain experience and expertise beyond the traditional "silo." I believe that this added understanding has a direct and significant impact on how to effectively negotiate, or as Shauna puts it provides important insights into what "motivates the person across the table from you.” After talking with industry thought leaders on negotiation, such as Clive R Heal and Bill Michels, I am convinced more than ever of the following excerpt from my post: "In short, negotiating is (or should) not be based on an adversarial, game theory approach in which there is a winner and a loser. “Getting To We,” as Kate Vitasek calls it, is more an act of insight and understanding than an exercise in Sun Tzu tactics. By the way, while I am a fan of the ancient general, strategist, and philosopher’s advice, such as; If you know the enemy and know yourself, you need not fear the results of a hundred battles, I substitute the words “enemy and battle” with “partner and dialogue.” What are your thoughts?