A couple of weeks ago, I hosted a call for Procurement Leaders’ CPO community during which the CPO of a major healthcare organisation shared his function’s transformation journey, the lessons learned and its impact.
One of the keys to the success of the transformation was that it had a clear purpose and was fully aligned with the organisation’s need to pivot following the impact of Covid, and subsequent earnings and share price underperformance. Safe to say, the CPO in question had a (burning) platform for change.
But on top of that platform for change was a laser focus on outcome and, by extension, the inputs that would drive success. And, to this latter point, he shared three secrets to the success of the programme.
First, was a commitment to building the right culture, bringing in new high performers to replace those who weren’t up to scratch. At the same time, he sought to instil common values and behaviours in his new team: a willingness to take risks, a collaborative mindset, being prepared to accept accountability and a pioneering mindset are among the traits he looks for in talent.
Second, a focus on ensuring his leadership team was fully aligned – both with the vision of the transformation, but also with the goals of key executives across the enterprise. Ensuring the procurement leadership team possessed complementary skill sets and good chemistry was an important enabler of this.
The third secret – and a vital one – was to embrace an “all or nothing” mentality. While many other functions across the business were in transformation mode at the same time, a clear motivating factor for procurement was the sheer ambition of the programme. Having a clear, ambitious but achievable destination helped to rally people and build momentum.
Yes, he invested heavily in technology to enable the transformation, but the crucial differentiators were people. He shifted the balance of the team to be 50% strategic, 25% transactional, and 25% support-focused. In doing so, he succeeded in tripling savings compared to before the transformation.
The result? A permanent ‘seat at the table’ as a strategic partner across the business and the opportunity to move on to harder, but even more impactful, areas of value beyond savings.
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