I attended an Invitation Only roundtable for CPOs during the first afternoon of the conference.
- Executive Keynote by Colonel Anthony Wood
- Online Survey and Open Discussion
- Breakout sessions 1 & 2: Topics of breakouts are revenue impact, risk management, stakeholder management, performance tracking, and earlier engagement for outsourcing
- Networking breaks
There were approximately 30 CPO level participants from across different industries. Some notable companies were Coors, Bloomberg, Boeing, Moody’s, HP, JPMorgan, HP, Northwestern Mutual, Deloitte, Equifax and yours truly Russell Investment.
The roundtable was kicked off by Colonel Wood (a Marine who led the organization of the evacuation of Saigon in 1975). He gave a talk about moral courage in business – how one needs to do the right thing, be truthful to your team, and lead by example. He was also the Opening Keynote Speaker in the morning about the evacuation of Saigon in 1975 (see earlier post).
For a little networking fun, they organized a game ” 2014 Executive Forum Fun Facts – How Well Do You Know Your Peers?” We were given a card and was asked to match the executive attendee with their most unique or odd job. There were about 12 exec facts – mine was about a job in Australia as a cook on a PADI Dive boat for three months.
In my first breakout, we discussed the different opportunities to help with the revenue generating side of the business. There were examples of Procurement helping the business negotiate with clients. I shared with the group an example where I had to conduct a day long negotiation with a Tier 1 supplier where the CPO showed up and sat kitty corner from me taking notes. I think he was there just to mess up my mojo. The rest of the discussion centered around “How to leverage your performance to drive more investments into Procurement”. Most CPOs expressed frustrations about the usual expectations where Procurement had to demonstrate superior performance and deliver significant savings to the company just to maintain the current or a reduced investment level. The Boeing CPO shared the approach of focusing on risk management as a way to demonstrate value. He told the group that over the last 10 years he never had to justify his budget at all. The group agreed that this is an exception rather than the rule. I shared with the group my approach at Russell where we grew the group to 3X its size over a three-year period by writing business cases for additional funding or to transfer services into the center. My perspective shared with the group was that Procurement has to be “jack of all trades” to constantly add value to the business. The Procurement scope at Russell ranges from the typical strategic sourcing, SRM to less familiar areas such as risk management, invoice accuracy auditing, facilitation, and change management.
The second breakout discussion focused only around Outsourcing. I think people were a little tired after a long day. There were some good discussions from Equifax about their management of offshore vendors (TCS and Infosys). It appeared that they really pushed the performance and ownership onto the suppliers and kept the business very thin.
We also did some fast around the room surveying. One particular one of interest to the group worth mentioning is “How much do you earn with upside bonus annually?” The percentages below are based on my notes and recollection. I believe there were some director-level people in the group (i.e. non-CPOs) that drove some of the lower compensation numbers. Overall, it was a valuable senior level discussion and benchmark.
- Greater than $500K (10%)
- $350K – $499K (10%)
- $250K – $349K (20%)
- $150K – $249K (35%)
- $100K – $149K (20%)
- Less than $100K (5%)