Advice to wannabee CFOs – is it applicable to aspiring Procurement Directors?

I was invited to the recent Economist CFO Summit by 4C Associates, who were the main sponsor for the event held recently in London. Proxima was also a sponsor – interesting that two procurement service providers wanted to target CFOs.

As always it was a mixed bag. Some CFOs, you may not be surprised to hear, can bore a conference audience as well as any CPO! But the first speaker, David Tyler, provided much food for thought for procurement as well as finance executives. We'll analyse how his comments relate to procurement people in a couple of posts and we’ll pose some questions that might spark some debate...

David Tyler

Tyler had has a career as a Finance Manager, then a CFO with Christies the auctioneers and GUS. He then “went portfolio” and became a non-exec with Burberry and Experian, then Chairman of Sainsbury’s and Logica, the IT services firm. He came across as very down to earth and unpretensious yet he also appeared competent, knowledgeable and pragmatic. Today we’ll cover his views on what makes a good Chief Financial Officer, and whether his thoughts can also apply to those who aspire to being successful Chief Procurement Officers.

On the Board, he said, you have to be primarily a business person. There are eleven Finance “eleven technical competences” – he listed them and they included tax, audit, financial planning, pensions etc. They are a “given” - you must have at least a working knowledge of each of them.

But over and above that, he believes the two key areas for Board level people are business judgement and emotional intelligence. Business judgement is about understanding the markets, competitors, and being able to take an “enthusiastic interest” in the organisation's wider business. You should be able to debate with external and internal audiences, and take a view on key issues.

But he stressed that you still need to be “hands on around day to day activities” – in his view, a CFO should never purely adopt the helicopter view. “You must be able to get down into the detail but still see the wood for the trees”.  CFOs also need “real negotiating ability”, although I must say I’ve never known one who had any real training in that area – perhaps (like most senior procurement people to be fair) they think they're just naturally good negotiators!

Then all of these technical qualities have to be delivered with the right personal style – the emotional intelligence. That means working in an ethical manner, developing a culture of trust, and being able to motivate and communicate well – all adding up to leadership. It’s a good shopping list for CPOs as well as CFOs, but of course much harder to deliver than talk about.

But two key points for procurement. What is our equivalent of the eleven technical competences? If we want to be taken seriously as a profession, perhaps we should be able to define clearly what it is we cover, and what a CEO might reasonably expect their CPO to know?

And the point about the ability to get into detail reminded me of a conversation with one of the most respected CPOs in our business. It was essential, he said, to understand which issues top management were really concerned about, then have enough grasp of the detail that he could answer questions instantly.

Not “I’ll go and ask my category manager whether the supplier is on track with that key development – I’ll get back to you later”. Rather, “yes, I spoke to them this morning, here’s the latest plan, and it’s looking like next Wednesday for final approval”.

That is a key lesson – interesting that it applies in Finance as well, and it’s something that every aspiring CPO should bear in mind at all times.

And in part 2 we’ll look at Tyler’s views on how you can make yourself ready to step up to that board level position – he speaks from a finance perspective, but again we’ll see that it is just as applicable to our profession.

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