Rick Hughes, ex CPO of Procter & Gamble – Procurement Provocateur (part 2)

Today, we conclude our “procurement provocateurs” interview with Rick Hughes (see part 1 here). Until his retirement last year, he spent over 30 years with Procter & Gamble, ultimately as CPO. He is now pursuing a portfolio career, including working with GEP, procurement solutions provider.

 Why should organisations care about procurement?

Procurement, like Finance, touches every part of the business. Suppliers work with every part of the business – we can deliver dramatic value, not just in cost savings but in many other ways - cash management, revenue growth, use of technology. For instance, I was involved in the P&G technology outsource back in 2001 to HP – that brought us a huge step up in capability, and raised the game for our own IT organisation.

That’s an example of procurement helping to re-shape the business strategically in a way that could not be done purely internally. Now we have to deliver cost management and savings as well – if you don’t do that, you won’t ever be allowed to do the other stuff! But the scope and opportunity for procurement is so much wider.

Where is procurement going?

The good news is that procurement people are becoming more professional. Their skill base is broader, they are becoming business leaders, growing in stature within organisations, working at Board level. I was once told some years back that “the best procurement organisation is one that the business never hears from”. We all know how far from the truth that is now. We’re waking up to the broader value of procurement, to re-shape relationships, address corporate social responsibility issues – even to help at national level as countries work to improve their economies, or to reduce corruption. It’s very exciting to see the impact we can make, I’m very positive.

The biggest risk is we get too myopic and focused too much on the immediate job in hand. One reason I like working with GEP and our professional Institutes is the focus on improving the profession overall – encouraging people to look beyond their day to day work to invest in the wider discipline. When I’m coaching or mentoring CPOs I always encourage them to get involved in that wider professional manner, it will help them and the whole profession.

 And finally, tell us about your role with GEP? How did this come about?

I met executives from GEP while still at P&G , and when they heard I was retiring they suggested a chat. One thing I like about the firm is that they are totally procurement focused, across software, outsourcing, consulting. I spoke to some other consultants who are great firms but have a broad focus and they wanted me to work across that wider area. But really, I wanted to use the procurement knowledge I’ve got, not just the address book! So I felt I could add most value here.

 So what are you actually doing with the firm?

It is a mix. I get involved in some GEP consulting assignments in a formal manner, at senior level or even providing some category level input in areas like Marketing Services where I have relevant experience - P&G spent some $15 billion a year in that area. I’m also doing some coaching and mentoring with CPOs – as a young CPO, who can you get that from? An experienced CPO seems to be the perfect answer to that. And sometimes it is a case of being able to offer advice and input to whoever might find it useful, whether client, or indeed GEP themselves.

I’ve also got some other portfolio activities outside GEP – I do some training and speaking, a bit of private equity related advisory, and I’m the Chair of the Billion Dollar Roundtable, which works with large firms to encourage supplier diversity in their supply chains. So I’m keeping busy.

Thanks to Rick Hughes, and to GEP for arranging the session. It was a real privilege speaking to one of the giants of our profession!

 

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