Chief-Procurement-officer-purchasing-officer

CPOs
in the
C-suite
The chief
procurement
officer has
achieved strategic
importance and
more visibility.
What comes next
www.kornferryinstitute.com

1
Introduction
Across industries—including technology, manufacturing,
health care, and retail—the supply chain is far more than just
the purchase and movement of materials and components.
Increasingly, the supply chain offers distinct competitive
advantages, including but not limited to cost-effectiveness and
the social responsibility and environmental impact of material
sourcing.
With greater strategic importance placed on the supply chain, the
CPO—the chief purchasing officer or chief procurement officer—
is moving from a behind-the-scenes role into the spotlight.
Although not a universally adopted role, CPOs are becoming
more common in organizations—and they are increasingly near
the top of the leadership pyramid. The CAPS Research 2014 Chief
Purchasing Officers’ Mobility and Compensation Study, a survey
of more than 100 Fortune 500 CPOs, reported that 82% have
direct access to the CEO, an increase from 60% in 1999.
This increased visibility raises important questions: What are the
qualities and attributes of a best in class CPO What comes next
for the CPO Can this strategic position pave a career path to the
top of the organization, such as chief operating officer or CEO

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The best in class CPO.
In planning a career, an individual typically focuses on the
experiences, skills, and behaviors necessary to move into broader
roles. Workplace evaluations focus on past and present job
performance, but often skimp on examining a person’s potential
and preparedness for new and different roles. It is crucial to
understand all three areas—performance, potential, and readiness—
to determine how to develop oneself most effectively.
Using Korn Ferry’s proprietary methodology, we developed a best
in class profile of a CPO representing the aggregate assessment
results of those who are most effective in that position. Below,
we have plotted its leadership style, thinking style, and emotional
competencies to illustrate what it takes to be successful in this role.
Additionally, by comparing this CPO profile with that of a COO and
CEO, we can also understand any gaps in potential and readiness.
In other words, what needs to be different before an individual can
pursue greater leadership opportunities, such as moving up to COO
or even CEO
In leadership style (i.e., how a person outwardly influences and leads
others) the best in class CPO exhibits a highly social and participative
style, a quality commonly seen in CEOs as well. Simply stated, the
most effective CPOs know how to connect people by creating
an environment that fosters the development of trust. They are
inclusive and have highly developed interpersonal skills. Best in class
CPOs do not tend to be task-focused micromanagers or rely on an
authoritarian, command-and-control style. Rather, they leverage their
interpersonal abilities to influence others and skillfully build credibility
with stakeholders.

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Best in class CPOs…
are strong at
developing highperforming
and
collaborative teams,
and enhancing
cross-functional
relationships.
Figure 1
How best in class CPOs lead compared with COOs and CEOs.
Usage score
7
6
5
4
CEO
COO
3
CPO
2
1
Task
Social
Intellectual
Participative
Leadership style
The leadership style of best in class CPOs (see Figure 1) also reveals
that they are strong at developing high-performing and collaborative
teams, and enhancing cross-functional relationships. They build bridges
internally with peers and externally with supply partners. They empower
direct reports to function as “mini-CPOs” within specific spending
categories (e.g., chemicals or electronic assemblies). The result is a team
of people who are strategically focused on what they are buying and how,
and they demonstrate an in-depth understanding of the economic, social,
and environmental impacts. This team approach contributes to a strong
talent pipeline of CPO successors with similar leadership profiles.
Although the CPO profile is similar to that of the COO and CEO, the
CPO’s slightly lower use of social and participative leadership can be
attributed to the sheer diversity of relationships each role must cultivate.
The CPO is a bit closer to the action, while the CEO and COO rely on
others to execute plans and strategies. Their increased breadth of
responsibility drives the need for more varied relationships.

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Figure 2
CPO thinking style compared with COOs and CEOs.
7
6
Usage score
5
4
3
CEO
COO
CPO
2
1
Action
Flexible
Complex
Creative
Thinking style
In thinking style (i.e., how a person solves complicated problems
on his/her own), best in class CPOs, like other C-suite leaders,
are at ease with complex situations and are reasonably creative
thinkers (see Figure 2). Highly effective CPOs see the links between
all elements of a situation, gaining a “helicopter view.” Their
creativity manifests as exploration of innovative solutions, while
also addressing interconnected issues. They are equally adept at
working with the details of implementing a solution, developing
thorough plans, and ensuring that all activity drives toward a longterm
goal.
Best in class CPOs, however, are notably less action oriented than
CEOs or COOs, both of whom make rapid decisions based on best
available information. In contrast, the CPOs are more analytical
and methodical in their problem solving and long-term strategic
planning, and are less likely to make snap decisions. In addition,
they are unlikely to act on intuition, but prefer to maintain a clear
direction based on careful analysis of risks and opportunities.

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A best in class
CPO demonstrates
a mental tenacity
in the face of
complex and
persistent
problems, but also
remains calm and
professional under
pressure.
Figure 3
CPO emotional competencies compared with COO and CEO.
Usage score
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6
5
CEO
4
COO
CPO
3
2
1
Ambiguity Composure Empathy Energy Humility Confidence
Emotional competencies
In emotional competencies (i.e., how a person handles difficult interpersonal
situations), the best in class CPO displays a profile of moderately high intensity
on all six competencies: dealing with ambiguity, composure, empathy, energy,
humility, and confidence (see Figure 3). This reveals a well-balanced executive
who accepts and enjoys the changing demands of the business environment.
A best in class CPO demonstrates a mental tenacity in the face of complex and
persistent problems, but also remains calm and professional under pressure.
He or she is generally an effective and reassuring role model during crises,
while also being able to adapt or modify an approach when necessary.
The best in class CPO is highly capable of understanding the motives,
aspirations, and likes/dislikes of others. Combined with a CPO’s social and
participative leadership style, this emotional competency bolsters the ability to
“read” a room quickly and intuitively, and connect with others and make them
feel heard. In addition, by perceiving the skills, strengths, and perspectives
of others, highly effective CPOs are able to facilitate mutually beneficial
outcomes. They also share credit with others when the moment demands it.
In contrast with the levelness of emotional competencies of the CPO, COOs
and CEOs score higher on empathy, energy, and confidence, and lower in
humility. This lower humility/higher confidence combination suggests greater
comfort in taking large, visible risks, and the ability to withstand the pressure.

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Career development for CPOs.
Recent research into CPOs reveals a position with significant
mobility; among CAPS Research survey respondents, 64% had been
in their job less than four years. In addition, 51% had been at their
current employer less than six years.
Reflecting the newness of this position, 41% of CAPS Research
survey respondents were the first person in their company to
hold that specific title. When there is a predecessor in the role, in
28% of cases the individual left the firm (quite possibly recruited
away), and 17% of the time the predecessor retired. Two interesting
statistics are that nearly 9% of predecessors were “reassigned” and
nearly 4% were “promoted,” both of which suggest internal careerpath
possibilities for current CPOs.
The question, then, is where did these executives go What roles
can current CPOs evolve to meet
CPOs who have their sights on becoming CEOs one day need to be
deliberate about their career development. A CPO’s potential and
readiness to make such a move will require focus on closing specific
gaps in order to match the CEO profile. As previously noted, these
gaps include:
© Leadership style. Increase use of social and participative styles of
leading. CEOs spend a great deal of time cultivating relationships
(social) with diverse parties, including investors, analysts, and
customers; exposure to this greater diversity of people instills
confidence. Best in class CEOs are also skilled at getting other
people’s input and listening (participative) to find solutions to
problems.
© Thinking style. Increase action orientation. CEOs have a
deliberate action focus and are not bothered by making a move
before they have all the information.
© Emotional competencies. Increase empathy, energy, and
confidence. Build upon existing strengths in understanding
others and reading the room (empathy) and handling complex
issues, as well as the complexity of multiple issues (energy), while
expanding one’s comfort level with taking risks (confidence).

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How can a CPO bridge gaps
CPOs’ traditional ambit involved sourcing and procurement of goods
and services. They are now strategic partners on CEOs’ leadership team.
Over the past decade, the role expanded—driven by the need for
improved cost control, response to increasing competition, and
market demand for innovation. CPOs are now involved in supply risk
management, accounts payable, contingent workforce management,
new product development, M&A due diligence, compliance with the
Foreign Corrupt Practices Act and ethical sourcing, sales force training,
the make/buy decision, as well as other responsibilities.
The expanding scope of the CPO’s responsibilities leads naturally to a
wider set of relationships within the organization and among external
supply partners. Thus, some style gaps may close organically, as a selfaware
CPO evolves with the job, taking on broader responsibilities and
developing his or her leadership, thinking, and emotional styles.
Getting to the next level.
Career conversations among CPOs frequently center on what’s next and
how to get there, particularly as succession plans for CEOs are developed
and the competencies of candidates are assessed. In order for CPOs to
be considered for the CEO position, they must demonstrate potential and
readiness, as well as performance. The differences are important: High
performance means a person is good at his or her current job. Readiness
suggests that he or she is prepared for the next promotion. High potential
means there are indications that he or she will succeed at the highest
levels of leadership. According to research, only about 29% of high
performers are also high potentials, whereas 93% of high potentials are
also high performers (Corporate Leadership Council 2005). To advance
upward, CPOs need to show they are in the latter group.

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Potential is directly linked to another essential attribute: learning
agility. Korn Ferry defines learning agility as the willingness and
ability to learn from experience and then apply those lessons
to succeed in new situations. Learning agile leaders are known
for seeking challenges, soliciting feedback, and being selfreflective
and resourceful. The desire to continuously learn and
do something new or different is a challenging characteristic
to develop; yet, it is also the most essential to leadership
success. In fact, research shows that learning agility is the most
significant predictor of success, more so than IQ, education, or
emotional intelligence (De Meuse 2011).
Even for CPOs with true high potential, rising to the top is more
likely to be realized in organizations that consider procurement
to be strategic and in which CPOs have a direct link to CEOs.
This level of visibility and reputation makes them attractive
as CEO candidates. It is not enough for CPOs to develop a
slate of skills if others are not aware of their strengths and
competencies.
The career development path for CPOs often involves taking on
additional responsibilities in order to make a bigger contribution
to the organization. That might involve a title expansion or a
new role that comes with a bigger purview and higher profile.
A logical advancement is from CPO to COO, which may increase
one’s chances of becoming a candidate for CEO.
The bottom line for CPOs is to ask for more. And also do
more. CPOs with greater aspirations need to actively manage
their careers and seek to gain visibility on the senior team
and recognition as a strategic contributor. At the same time,
they need to attend to their personal skills and attributes,
by developing the qualities that will make them attractive
candidates when the next opportunity arises.
Pressing questions
for the CPO.
© How do I accelerate my
procurement strategy
with the talent on my
team
© Are my senior leaders
achieving their full
potential
© Am I ready with
leadership succession
plans
© How can I jump-start
my new executives to
lead well now
© How can I find the
perfect executive and
the top talent we need
© Is our “branding”
attracting and retaining
the right talent
© Am I optimizing my
leaders and the human
potential on my team

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References
CAPS Research. 2014. Chief Purchasing Officers’ Mobility and
Compensation Study 2014. Tempe, Ariz.: CAPS Research.
Corporate Leadership Council. 2005. Realizing the Full Potential of Rising
Talent (Volume I&II). Washington, DC: Corporate Executive Board.
De Meuse, Kenneth P. 2011. What’s Smarter Than IQ Learning Agility.
Los Angeles: The Korn Ferry Institute, Proof Point, October 2011.
Hoffman, Heidi, and Rachel Johnson. 2013. “Your Secret Weapon in the
War for Talent.” White paper. Los Angeles: The Korn Ferry Institute.
Available by request.

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About the authors
Heidi A. Hoffman
Heidi is a senior client partner with Korn Ferry and head of the firm’s
Supply Chain Management Center of Expertise, North America.
heidi.hoffman@kornferry.com
Karen H.C. Huang, PhD
Karen is the manager of Assessment Services based in the Korn Ferry
Washington, DC, office.
karen.huang@kornferry.com

About Korn Ferry
At Korn Ferry, we design, build, attract and ignite talent. Since our
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The Korn Ferry Institute, our research and analytics arm, was established
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increase understanding of how strategic talent decisions contribute to
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