Spend Matters welcomes another guest post from Jeff Amsel of The Hackett Group.
As a member of senior management, we are expected to hit the ground running and show how we are driving change for the company. CPOs typically report to a C-Level member of the executive team, and being prepared before you arrive is critical. Many of us have our own beliefs for how to measure success, but I would argue that there are some fundamentals involving people, process, data, and technology to exceed in our role and achieve company goals.
Evaluate your team. Do you have the right people in the right roles? You will need to evaluate your existing team to determine if they have the technical and interpersonal skills to successfully interface with your internal and external clients. Work to understand what roles they play in the organization and if the staffing model is ideal for your experience and vision.
Meet your key stakeholders to build relationships. Help them achieve their goals by listening and understanding their needs and perceptions. Demonstrate that you are credible, bring subject matter expertise, and can drive change. You must understand your company culture to operate effectively. Quickly align with such areas as your HR business partners to drive needed change in your department, Legal for their instrumental support in your sourcing process, Risk / Internal Audit to create governance and policy, and the Executive Team as they will sponsor your efforts.
Demonstrate your enthusiasm, collaboration, and confidence. Show your team and others you are dedicated and committed to drive change and will do this in a collaborative manner. People want to see that you have the strategy and vision of what we want to be when we grow up and how to get there. Most importantly, you want to motivate, inspire, and show charisma.
Evaluate your team's job profiles and compensation levels. Is your team compensated well and is their job description clear and relevant for what your future vision holds? Is there a clear career path for your team? Remember the saying "you get what you pay for." Attracting and retaining top talent will pay dividends down the road for the company.
Develop a governance policy. Does procurement have a clear mandate to go after the savings? Does procurement have the right visibility within the business? Are the roles and responsibilities clear of how procurement will interface with the Business? Work with members of HR, Legal, Risk, Internal Audit to draft a document which can then be socialized with the Executive Team to sponsor and champion.
Create early wins. Take on projects to build political capital and drive early wins for your team. Celebrate and communicate success often. Look for areas that are less complex, non-disruptive to the organization, and easy to implement. Perhaps it is assisting with contract negotiations for in-flight projects, demand management efforts around shipping packages, or renegotiating office supplies.
Have the right tools, templates, and processes in place. Make sure you have a sustainable and repeatable sourcing process that is clearly understood by your stakeholders. Does your team have the right tools to be successful in their jobs?
Have clear and open communication: People want to be kept informed and know that there is a plan in place. Some ideas to achieve this include developing a project charter, setting up regular staff meetings and one-on-ones, providing regular updates to the senior management team, reviewing performance goals, and understanding what projects are in progress so you know how they are being managed.
Establish a PMO structure for large transformational projects. Setting up this group will provide you an audience for periodic project updates, aid in removing obstacles, and address key concerns. As this group will be a champion for your work, it should consist of senior members of management and the Executive Team.
Understand your data. This is a critical step and, if not done correctly, you will lose credibility in the organization. A thorough opportunity analysis should be performed so that you know how much is being spent, who in the company is spending the money, and which suppliers are being paid. You can then begin to create opportunity models of areas to explore with your business partners.
Know the sources of your data and their limitations. Data is never 100% accurate, whether this is due to system inefficiencies, timing issues, miscodes, etc. If you understand what you have and where there are gaps, you can effectively manage expectations. Once you get your data, you will need to perform tests to validate and make sure you review with your business stakeholders before any reporting is done. Another way to kill your credibility and lose support is to present findings that are not accurate and have not been shared and socialized with your business partners - be collaborative!
Understand what tools and systems exist today. Take the time in the first few weeks to see what systems and tools are in place at the company. Areas to focus on include spend analytics, savings tracking, contract management, P2P, and PMO reporting. You can then build into your strategy for the short and long term, your vision of what might need to be built, changed, or implemented.
For example, do you have visibility into existing contracts for key suppliers? If audited (which you will be), can you clearly show how you are protecting the company assets and reducing risk for the company?
How are your savings being tracked and validated? Others will be looking to poke holes in your savings assertions and look to discredit your work. You must have the right systems and tools in place so that the numbers are factual, can be supported with data, and have been socialized and signed off by your business partners.
Having a well thought out plan before you arrive will make your chances of success that much greater. It will also set your foundation for what you want to do over the next few years and establish long lasting relationships with your business partners. Building a collaborative and trusting organization with the right people, process, technology, and data will pay enormous dividends. You will be looked at by senior management as one who knows how to solve problems and gets things done. Good luck in your first 100 days as the new CPO!