The Mind of the CSCO

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Experience navigating the complex web of stakeholders has chief supply chain officers well positioned to move into CEO roles.

By Peter L. O’Brien

The role of the chief supply chain officer, or CSCO, seems to grow in complexity and strategic relevance over the years. Two decades ago, we could barely conceive of one individual overseeing the entire end-to-end supply chain. A study in 2004 showed that only 8 percent of Fortune 200 companies had a CSCO. Today, the percentage of organizations having someone responsible for overseeing a combination of end-to-end supply-chain functions has increased to 68 percent. Several prominent companies have even considered tapping leaders with specific global supply chain experience for the CEO role. These developments compelled Russell Reynolds Associates to look more closely at what traits make CSCOs different from other executives, what traits enable or hinder CSCOs looking to step into a CEO role and how the CSCO role is evolving more generally.

Transforming from Tactical/Functional Role to an Interconnected Strategist

CSCOs in most large organizations have moved from a hands-on, tactical operator to a leader driving growth, agility and strategic advantage. Costs are still important, but today’s best-in-class global supply chain leaders are making strategic decisions that enable the business to expand in the most efficient way. When we examined their attributes relative to other executives, we were not surprised to find leaders who tend to be significantly more strategic and innovative, inclined to act independently, persistent and determined. CSCOs tend to contemplate the future, anticipate change and think innovatively about solutions. They lead change, cut through bureaucracy, set clear directions and do what it takes to reach their goals. More than other executives in the management team, CSCOs have to navigate a complex web of stakeholders. During interactions with those around them they are very aware that they are part of a global, interconnected supply-and-demand network with profound interdependencies. They therefore tend to have an objective and logical approach, remaining fairly formal and reserved in their interpersonal relationships.

Stepping up to Shape C-Suite Agenda

The CSCO is increasingly active on the senior management team, sometimes even stepping up to the role of CEO. CSCOs are equipped with some unique attributes that will help them to flourish in a general management role, but also own some behavioral facets that may hold them back. They will benefit from their entrepreneurial spirit, strategic long-term focus, and ability to search for innovative solutions to thrive in a general management role. Perhaps more than other potential candidates, CSCOs are skilled at seeing the bigger picture. They are comfortable in cutting through bureaucracy to make things happen and will confidently lead change when needed. Attributes that may hold back the typical CSCO include their preference for a professional and logical approach and for setting their own agenda. While these attributes are necessary as part of a supply-and-demand network with many different stakeholders and interdependencies, as CEO, a more open and informal approach toward others helps build better relationships.

More than 65 Percent Global Supply Chain CEOs have Worked Abroad

When we looked at the professional careers of supply chain executives who have made it to the CEO position, we noticed that those executives have in most cases not spent their whole career in supply chain functions. Almost all global supply chain CEOs (90 percent), in fact, have held senior management positions across two or more business areas. Furthermore, a majority of those executives have experience working abroad (65 percent), often in two or more countries outside their home country. This is perhaps not unexpected, given that today’s global supply chains have suppliers, operations, and end customers spread across the globe. Leaders who have dealt with multiple countries and cultures, preferably in both developing and developed markets, are better positioned for success because they have worked with various languages, cultures and backgrounds and have been exposed to different types of risk and disruptions. Finally, most CSCOs who have made it to the top were promoted internally to their role (90 percent). More than a third of these internal hires spent more than 25 years with the company before getting promoted to CEO. Successful executives tend to have a deep understanding of the organizational structure, leadership style, and culture of their companies. They have gained the support of a wide internal network, on the executive board as well as within the senior management team and below.

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The next generation of global supply chain leaders will be called upon to steer the company through complexity, digitalization, and volatility. Successful CSCOs of the future will be those who can better structure, coordinate, and manage relationships with their partners, working in a global interconnected network committed to stronger, closer, and more agile relationships with the end customer. They will have to continue to demonstrate strategic, innovative, determined, and results-oriented leadership traits, and need to develop further their political savvy and influencing skills. CEOs and boards of companies should proactively assess their global supply chain talent pool and think about their future pipeline in the short, medium and long term. Their global supply chain talent may well become the future CEOs of the company.

Peter L. O'Brien leads executive search firm Russell Reynolds Associates’ Global Supply Chain Practice.  As a member of the firm's Global CEO/Board Practice, he advises clients across all sectors, from Financial Services to Consumer/Retail to Industrial/Natural Resources on senior leadership, succession and search requirements. Peter assists organizations, both in Australia and internationally, build strong and highly effective leadership teams and boards. He is also a key member of the Global Industrial/Natural Resources Sector.

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