I interviewed Sigi Osagie who discussed Leadership Effectiveness in Procurement/Supply Chain Management.
It’s nice to speak with you today, Sigi, and today this is going to be an interesting topic on leadership effectiveness in procurement and supply chain management. Can you first provide a brief background of yourself?
Excellent. Thank you very much for the opportunity to share some of my perspectives, Dustin; I appreciate it. My background is probably best described as—I often say to people that I have a broad end-to-end supply chain management background. I've had responsibility for pretty much all functions in the supply chain spectrum, from forecasting and demand management at the front end of the supply chain through procurement, strategic sourcing, and manufacturing to the back-end, logistics.
I’ve done that in both SME businesses—small- and medium-size enterprises—as well as large, multinational blue chips in several sectors. In my corporate carrier I worked for large organizations like Viasystems, GEC Marconi, and Bombardier including as a global supply executive, responsible for different functions across the supply chain domain, I think probably the key thread running through my carrier background has been 'change', managing change.
Pretty much all the roles I’ve had have been about going in to set up brand-new functions or going in to transform functions, drive or turn around performance capability. I have robust change-management experience, including running big business processes of engineering initiatives, as well as being a Six Sigma black belt.
That’s in terms of the corporate side, and on the academic side, probably the more pertinent thing to mention is, as part of my M.B.A. studies many years ago, I carried out a novel research, looking at management effectiveness and organizational performance, how the effectiveness of leaders in businesses affect the performance success of organizations.
That work pretty much informs what I do today. I bring the findings from that research together with my end-to-end experience across supply chain to help organizations up their game in terms of improving effectiveness capability and performance in the procurement and supply chain space. I do that as a business adviser, or sometimes clients want me to actually sit in the chair and drive the change, so I act as an interim executive. I act as a coach and mentor to folks in the procurement and supply chain space, and I also share my expertise as a speaker and writer and have just had my first book—Procurement Mojo—published a few months ago. That’s my background.
What is leadership effectiveness?
That’s a good question to start off with. I smile to myself when I think about it because it’s probably one of the most common things people think about when they start getting into this area of organizations. The truth is, Dustin, there isn’t a single preeminent or ultimate definition of leadership effectiveness because there are so many facets and so many angles and so many components, both in terms of what leadership is and how it applies to organizations and then how you apply effectiveness to that.
If you look at the literature out there—either by academics or by practitioners—you will see so many definitions and descriptions. But I think they have a common thread. If I was to offer a simple definition or description—I do like to keep things simple—I would say leadership effectiveness is about embodying effectiveness in our conduct as leaders.
There are three important points to pull out of that description. One is: When I talk about the word conduct, I’m referring primarily to how we think, how we communicate, and how we act, the behaviors that we exhibit. Then the other important point, as I talked about, embodying effectiveness through our conduct as leaders. The truth is that when we talk about leadership or leaders, we often think about people who lead functions or organizations—managers or executives who have responsibility for a function, which typically might involve managing people but not necessarily all the time.
Really, there are two aspects of leadership. There’s an element of leadership that’s about leading yourself, what I call self-leadership. Leadership effectiveness applies as much to that as it applies to the more common dimension of leadership that most people think about, which is leading others.
Then the final key point to pull out of the description I gave is about effectiveness itself. I’ll remind you what I said: Leadership effectiveness, in simple terms, is about embodying effectiveness in our conduct as leaders. But what does effectiveness really mean? It’s really about doing the right things or taking the right actions to achieve the goals or outcomes or objectives we’re trying to obtain. It’s important for people to grasp that.
I think the way we manage organizations today and a lot of the KPIs and performance metrics we use are so centered and biased toward efficiency that it’s so easy to get lost and forget about effectiveness, which is actually more important than efficiency. You can be very efficient at doing the wrong things, and you will fail, whereas if you’re effective—even if you’re not efficient at doing it—you will be fine. In a sense, if I was to wrap all that up, I would say that leadership effectiveness is really about thinking, communicating, and acting in the right ways relative to the goals, objectives, or outcomes we’re pursuing.
How is leadership effectiveness applied in procurement and supply chain management?
That’s an excellent question, Dustin. I think it’s important, also, to think about this because, for all organizations, including procurement and supply chain management functions, effective leadership is a primary requirement for success. Leadership is the glue that holds everything else together. If leaders in an organization—whether that’s procurement, supply chain, or any other functional area or the whole enterprise—if the leaders are not effective, then chasing success will become like the pursuit of a mirage.
In Procurement Mojo, I address this idea of leadership effectiveness within procurement and supply chain in great deal. I’m conscious, of course, that here, we don’t have too much time, so I can’t go into as much detail as I did in Procurement Mojo, but I’ll give you a few pointers. In essence, it’s really about leaders first and foremost recognizing the importance of their roles. That’s absolutely critical leadership is the single biggest factor that affects organizational success, and that’s about how we motivate and inspire people within organizations and how we manage performance.
Also, leaders need to recognize that there are many elements that come together to help us achieve success in procurement and supply chain. There’re obviously the strategy, the tools we have, and what's happening in the marketplace and all of that, but people are also a key aspect of that. With the best strategy and world-class systems and processes, if a leader is not focusing adequate attention on his people, on growing them, on bringing the best out of them, on helping them to perform, on aligning their efforts to the enterprise priorities, and helping them demonstrate the right attitudes and behaviors and how to deal with stakeholders across the wider enterprise, basically aligning the whole of the procurement and supply chain organization to the enterprise priorities, if the leader isn’t doing that, then he’s never going to achieve success for the function.
I think that’s one of the first aspects of applying leadership effectiveness to procurement and supply chain management. Another key angle is about focusing everything the supply chain and procurement function does on what the enterprise is trying to achieve.
One of the mistakes I find when I work with clients today in helping them up their game is that many procurement and supply chain functions get caught up in the technical elements of the job, or what I call the task, and they completely lose sight of what's important and forget that we’re not actually there to do procurement or to do logistics or to do inventory management or to do any of that functional activity; what we’re there for primarily is to serve the business. We’re the custodians of that organizational activity within the function, but primarily, we’re there in the business eight hours a day, five days a week to help the enterprise achieve its goals.
I think a key element of leadership effectiveness in procurement and supply chain is for leaders to make sure that they are channeling all the efforts within procurement and supply chain on helping the enterprise achieve its goals. That covers the organization, which I mentioned earlier, also, the enablers—processes, systems, tools, strategy—as well as managing performance robustly.
Within all of that, without spending too much time on it, certainly, the key thing I would like to highlight and draw attention to—and probably an area where many procurement and supply chain leaders have a deficit in terms of their focus—is really their people. Organizations are, first and foremost, about people. If we can build 'people capability' within the procurement and supply chain function and help our people manage their interactions with others outside their functions, then we’re already over 50 percent of the way to success.
When I talk about focusing on people within procurement and supply chain, I’m talking about things like providing clarity of purpose, giving people a vision of the supply chain and procurement function we’re trying to create, what the long-term intent is, which, as I mentioned, must be aligned to what the enterprise priorities are, making sure we’re targeting people with SMART goals - that's the way we make the procurement and supply chain functions more relevant to the enterprise, by disaggregating the functional goals into individual objectives for the people and the teams. Also inspiring and mentoring people to help them reach beyond what they think their capabilities are, instilling self-belief, help them light the fire in their bellies and ignite their passions, help them “build muscle” because you often find that procurement and supply chain functions are frequently held back by people’s perspectives.
One of the most common phrases you’ll hear is “We’ve always done it this way” or complaints about having the right reputation within the organization or dealing with the challenges of stakeholders across the business. We have to help people build the muscle that allows them to cope with these sorts of challenges, create the right environment for them to actually grow and demonstrate their abilities. Probably another angle to leadership effectiveness in procurement and supply chain is about the functional leader using his/her position as a senior executive to champion the function, to clear the way for the guys on the team and steer the function towards success; steer the function and know how to dance the organizational dance we often have to go through, especially in large organizations, and really be the number one champion of the procurement and supply chain function. It’s a very important aspect of leadership effectiveness in procurement and supply chain.
Where have you seen success?
Good question, Dustin. In Procurement Mojo, I give an example of the CPO of a health care, finance, and insurance-services group. He shared some tips from his experience of transforming his supply-management function in his organization, and some of the things he talked about were great examples of what leadership effectiveness means. I’ll just pull out three.
He talked about aligning the team’s goals to the corporate priorities, which is one of the key things I mentioned, and also about managing individual’s performance, what I call making sure we’re calibrating people to recognize that we must deliver performance to support the enterprise; pretty much in line with I said earlier, and something else I mentioned about communicating to the business sensibly.
If I look at my own career, another example of success in leadership effectiveness in the procurement and supply chain space was when I worked for a chief procurement officer while at Marconi. Probably one of the best things he was really good at—and I learned a lot from him—was he was very adept at managing inter-functional stakeholder relationships.
We were a business developing, designing, and launching products in the technology space, as well as services related to that, so as you can imagine, stakeholder interactions was a big element of our day-to-day activities. Dealing with other functions like engineering, marketing, and finance, he was fantastic in managing those interactions, as well as the organizational dynamics, and he helped put our supply-management function on the consciousness of the organization as a key function. A great example of using one’s position as a leader to actually create success in a procurement and supply chain function, which is one of the elements of leadership effectiveness.
More recently, in the past three months or so, I met a chief supply officer for a household luxury brand who was talking to me about his efforts to transform his function. When he shared some of his thoughts about what he was trying to do, I wanted to give him a big hug and a kiss because, to me, he demonstrated that he got it; he understood what leadership effectiveness was about.
I’ll just summarize a phrase that he used. He talked about "the journey", and what he said was that he wanted his team to be aware and think about the experience stakeholders in the business had when they went through a journey of dealing with a supply-management function. It had to be seamless; it had to be painless; it had to be effective; it had to be efficient; ultimately, it had to be focused on delivering value for those stakeholders. It’s a fantastic demonstration of how the way we think, especially as leaders, impacts our ability to take the right actions, which is what effectiveness is about, to create success for our procurement and supply chain functions.
And then about a couple of months or so ago, I gave a talk on effectiveness within procurement, and I met the CPO of a large multinational facilities-management business. We got into a discussion after my talk, and she was telling me about deliberately spending a significant proportion of her time, effort, and energy on people issues. That was music to my ears because, again, it was great to speak to an executive who really got it.
As I said at the start of this interview, organizations are about people, first and foremost. The more procurement and supply chain leaders can grasp this and leverage it, the more successful procurement and supply chain functions will be. To be effective and achieve this, it’s important that procurement and supply chain leaders always think about the end goals and the outcomes that they’re trying to get to. These might be hard, tangible outcomes like cost savings or on-time delivery or inventory turns or supplier performance, or it might be soft elements like the reputation of the supply-management function. Ultimately, it’s always important for us to make sure we’re delivering value to the enterprise.
One element to remember is that 'success' is not just about numbers, but making sure the supply chain function is baked into the fabric of the enterprise. Leadership effectiveness is a key element of procurement and supply chain functions achieving that. I think those three examples indicate some of the things that effective leaders do to achieve that.
Thanks, Sigi, for sharing these really insightful views on leadership effectiveness in procurement and supply chain.
Thank you very much. It’s been great speaking to you, and I appreciate the opportunity.
About Sigi Osagie
Business Adviser, Coach, Speaker and Author – “Procurement Mojo"