Making the Most of Change: When Opportunity Knocks, Your Chief Procurement Officer can help you open the Door
Observations on Partnering to Capture the Potential Value of Change
It is an axiom in business—which too often goes unexploited— that change brings opportunity. Regardless of whether the change is planned and welcome or it has been sprung on you, the more disruptive the change, the greater the opportunities it presents.
The strongest resistance to change can come from within an organization, whether it’s Procurement or IT
A change in leadership is one example. When a CIO steps into a new role, it’s natural to look around and see what’s working well and where there are opportunities. It’s a good time to update practices or policies, review the nature and mix of the work done in-house or outsourced, and identify which suppliers show the best promise to become or remain strategic partners.
At DuPont, we are in the midst of an historic merger with plans to create three separate companies. We have new CIOs who are in the process of designing IT and Business Process capabilities to support these new companies. Everywhere you turn, we are looking for more effective and efficient ways to do things, where we can find savings, and where we need to invest in our future.
I sat down with one of our new CIOs, Steve Larrabee, CIO for the Specialty Products Division of the merged DowDuPont, to get his view. At the junction of two mega-drivers—a complete restructuring and a new CIO—we have an unpreceded opportunity. We agree that change of this magnitude doesn’t simply allow you to take a fresh look at things: it demands it. And we agree that your CPO can help, especially when it comes to factoring in external insights and capabilities to build any top-level IT organization.
Here are a few thoughts we tossed around on how a good partnership between the CIO and the CPO provides support in the midst of change, applicable to any scale of change.
A Strong Team
Nothing is more essential than a strong leadership team. Does your team include a strong procurement resource? Part of my job of CPO is to staff your team with a strategic sourcing leader who can, as Steve expressed it, be “your eyes and ears about trends in the industry.” An IT category manager—your window to know not only what new technology is out there, but how others in your industry are using it—is a must to create your change efficiently and effectively.
Insights from Inside and Outside the Company
With a broad, cross-functional/cross-business-unit view of your company, your CPO has an unparalleled view of who is doing what, trying what, and working with whom around your company and the supplier community. Your CPO can share how others have built the business case for new expenditures and can you calculate the ROI.
In addition, they are in contact with other CPOs with the same insights into their own companies. Are you thinking about a particular consultant? Moving something to an external provider? Considering a specific new supplier, or using an existing one in a new way? Ask your CPO what they’ve been hearing from their other internal clients and their peers across the industries about past experiences with these suppliers.
A Way to “Rally the Herd”
The strongest resistance to change can come from within an organization, whether it’s Procurement or IT. External change can create a “hunker down” mentality, leading people to cling to the familiar and doing their best to not draw attention to themselves, just when innovation and new ways of doing things are needed the most.
CPOs love to share success stories. If you’re feeling resistance, tap your CPO to help rally the herd by sharing how value was created elsewhere through challenging the status quo in capability and/or organizational design. It draws a more concrete vision and demonstrates that an established path to the future state does exist. Use stories to create a hunger for change so your organization pulls with you instead of pushing against you.
A Final Thought: Context is Everything
You don’t have to convince people that the way things were done in the past were wrong; you can and should respect that past and what was exactly right in the old business context. Taking things in a new direction is an easier sell when your context is changing too—and it doesn’t take change as dramatic as a merger. Steve’s parting thought was that even standing still creates a shift in context within the IT industry, where change is so rapid that the landscape is constantly shifting around us. Leave things alone, and you’ll have a new context, whether you want one or not—so you might as well take every chance you can to create your own future.