In episode 95 of the Leadership Minute, Acceleration Economy practitioner analysts Joanna Martinez and Manny Korakis discuss the relationship between the chief procurement officer (CPO) and chief financial officer (CFOs). Recently, Manny and Joanna wrote articles about this relationship, Manny from the CFO’s perspective, and Joanna from the CPO’s standpoint. Then they dug in deeper by talking about what they learned from one another.
This episode is sponsored by “Selling to the New Executive Buying Committee,” an Acceleration Economy Course designed to help vendors, partners, and buyers understand the shifting sands of how mid-market and enterprise CXOs are making purchase decisions to modernize technology.
01:29 — Manny says there must be a strategic relationship between procurement and finance leaders. Procurement coordinates vendor relationships and ensures suppliers are diverse and not concentrated in any single area. The CFO has insight across the enterprise, including what the CEO and board are thinking, and can ensure that vendor selection and procurement spending are on the right track.
02:53 — Joanna now realizes that when the CFO declines a CPO’s request, it could be that the CFO has information — such as business pressures, projected shortfalls, or information from the CEO and the investor community — the CPO doesn’t have. She says she needs to strengthen her requests with data, “but understand that sometimes I don’t know what I don’t know.”
03:46 — Manny tries to have open discussions with the CPO, but there is some information he can’t share, such as merger and acquisition activity and, for public companies, material non-public information. This often puts him in an awkward position.
05:07 — In manufacturing organizations, there’s an obvious link between the CPO and the company strategy, because you’re procuring materials that are resold as products. But in services companies, Joanna says, that connection may not always be embraced across the organization.
07:10 — Manny agrees and says hiring independent contractors is a good example. You’re buying talent with new skills, capabilities, and relationships to help service your clients.
08:53 — Joanna asks Manny whether it is helpful to involve the CFO in communications with suppliers to share their challenges and the things they’ve delivered.
10:06 — Manny says he is very interested in speaking with key vendors to make sure he understands their strategy, goals, and objectives, and that they understand his goals and objectives. But engaging with every vendor would consume too much of his time.