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Complexity should be prioritized over spend or team size when it comes to evaluating a senior supply chain role.
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Supply networks are a natural focus to help advance an organization’s ESG and social justice initiatives.
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As the CSCO role becomes higher profile, the responsibility – and corresponding salary – continue to grow.
How has the supply chain leader profile evolved over the last few years? What are organizations and boards expecting out of supply chain leaders now?
With more than 20 years in executive search, partner Heidi Hoffman is recognized as an expert on executive hiring in the supply chain, procurement, and operations space, working with growth companies and Fortune 500 organizations to place board, C-level, and senior executive searches.
Here, Hoffman shares her top six insights on how the supply chain space has evolved, including the impact the pandemic has had on the industry, the increasing importance of ESG and social justice, and other megatrends that are changing the profile of the supply chain executive.
NEXT Supply Chain Leader_ON Partners_2022
{Want more of the NEXT series? Check out volume 2 exploring the evolution of the chief revenue officer, volume 3 identifying the evolving profile of the next ESG leader. and volume 4 discussing the demand for chief marketing officers.}
Understanding Supply Chain Needs
When we are asked to undertake a senior supply chain executive search, our first question is, what is included? In the broadest sense, supply chain includes everything in the process – plan, source, make, deliver, serve. But supply chain roles will often include only a subset of these responsibilities, so we first must set the baseline of “what is included.”
Once we set functional qualifications, then we shift focus to business priorities: Are they in recovery mode? Growing globally? Feeling the pressure of traditional or non-traditional competition? We spend time with the client to determine not what they are, but what they want to be, and what kind of executive will help them get there.
Prioritizing Complexity
Clients understandably tend to focus on numbers – spend dollars, budget, team size – but it’s really about the level of complexity and how it all fits together. In this market, where access to chips is limiting the manufacture of, well, just about everything, supply of ocean containers limits how quickly your product can ship, lack of drivers limits the ability to get resources where you need them – this is all about the complexity of the network.
The person who can optimize the network, leverage relationships and devise creative solutions, is the executive who is in the highest demand. The numbers are secondary.
Executives in the Spotlight
Right now, supply chain is front page news but unfortunately, most of it is not good. “Supply Chain” is the evil monster that has left our supermarket shelves bare and made it difficult to get a new car. At the center of the conversation are the supply chain executives. These executives are getting a new level of respect and the position is moving up the executive chain of command.
CEOs are coming to their top supply chain executives before quarterly Street reviews to get an update on product availability. Supply chain is now a key agenda item at board meetings. Boards themselves are adding supply chain executives to the director ranks. The supply chain leadership role is evolving quickly, and the expectations of these executives are growing.
Supply Chain and ESG – An Expectation
Companies are no longer focused simply on making money. Of course, they want to make money, but underlying their actions is a growing attention to values and global impact. How a company’s leadership approaches and strategizes around these topics indicates their level of responsibility and accountability to the greater ecosystem. ESG and social justice are significant topics of conversation in the supply chain world. The interconnected web of relationships present in the supply chain makes top supply chain roles critical to the conversation.
You can’t just look at who your supplier is anymore, you need to also look at who supplies your supplier. It requires managing a massive number of relationships. A significant portion of a company’s ESG footprint is in the supply chain. How is the material being mined? What type of labor is being used? Are we using suppliers from under-represented or under-served communities? Are we set up to appropriately serve disadvantaged communities? These are all key considerations now.
We don’t get asked for executives who understand ESG per se, it’s just a natural part of what they do. These executives understand supply/demand and how the pieces fit together. They need to have a multifunctional understanding outside their own role. The supply chain career path is not a straight line, but more of an amalgam of roles and skills that link together the relationships that are critical to supply.
Compensation and Culture Are Evolving
As these roles become more complex, compensation packages have also evolved – often on par with other direct reports to the CEO – and many companies are not prepared for that. Consistency and resiliency of supply come at a price. The market dictates what they cost, and companies must figure out how to fit it into their structure.
One publicly traded client quickly doubled in size and went outside to bring in talent who knew how to help the company continue to innovate and grow. Much of their supply chain talent is new from the outside, which is also good from a cultural standpoint as the culture shifts to accommodate the new innovations and processes, which in turn attract the more innovative talent. As they say, the only true constant is change.
For Supply Chain Leaders, it’s All About Focusing on Relationships
As supply chain roles continue to evolve, candidates must learn how to better develop and market themselves. Functional skills are important, but evidence of the ability to optimize and cultivate relationships is key to the future. These executives must be able to influence across functions and businesses internally, as well as develop new, creative and sustainable relationships externally.
The leadership profile of a supply chain executive is much broader than ever before and actually looks more like a general manager than a functional leader. The best leaders combine technical and business knowledge with collaboration and communication skills. Relationships are the lynchpin of supply chain success.
For more information about ON Partners and recent executive search work in the first half of 2022, read the recently published Executive Talent Report. And read more insights in our recent supply chain upheaval article published earlier this year.
{Want more of the NEXT series? Check out volume 2 exploring the evolution of the chief revenue officer, volume 3 identifying the evolving profile of the next ESG leader. and volume 4 discussing the demand for chief marketing officers.
