While Chief Marketing Officers (CMO’s) being rainmakers have more visibility in organizations, the supply chain folks tend to be sidelined. The CSO (Chief Supply Officer/Head of Procurement/Purchasing) typically reports to the Head of Manufacturing in manufacturing companies or the Head of Finance in service organizations. The supply management community (see our sister blog www.cpsmblog.com) strives to be more strategic and find a “seat at the table” and be treated with the respect of a Chief Officer in the organization.This might be helped and a great example is the Trump decision in the making of pipes in the US for the Keystone pipeline project.
But why do CEO’s tend to have this “hands off approach” to Marketing and Supply Chain? A "hands off" approach to marketing and supply chain does not help create local jobs, a priority for every country in the world.
Here are five reasons why CEO's are shy to get involved in Marketing and Supply Chain :
- The overarching reason is that the professional CEO does not think like a sole proprietor whose sole purpose is to make the business great. A professional CEO is conditioned through professional training that is all about being “separate” from business ownership. “Ownership” here is both a financial and an emotional sense. Consequently, there is generally a lack of “emotional ownership” in most for-profit businesses. In sharp contrast, the best “non-profit” CEO’s do firmly believe that the non-profit‘s goals are their very own life goals. Why “ownership” has a bad feel in business and government leadership but is considered appropriate for nonprofit leadership is a topic for another post.
- The CEO is focused on shareholder returns and analyst perceptions. These are short term goals and involve easy cost side decisions like outsourcing and buying cheap from wherever possible. These short term goals can frequently be job killing at the local level.
- CEO’s have varying degrees of comfort with personally handling social media and for the most part leave it to the PR folks. The PR folks are very cautious and continue to live in the old world where the press was the sole provider of news. Today, if you have a question you just Google it. This means that the local jobs angle gets hidden, even when present in the company's intentions.
- When it comes to marketing, things are becoming extremely data driven and mostly it is about proposals from the marketing group that is either voted up or down by the CEO or Board. The CMO tends to have wider vision as to start with “anyone can be a customer”. Call it one of the benefits of the outward facing role of the marketer. See five differences between B2B Marketing and Supply Chain Managers.
- On the other hand the Supply Chain folks are constantly fending off sales people. The entire RFP (Request for Proposals) process is about being fair and transparent.Although it might not lead to local jobs and frequently may not get the best service or product that the organization is looking for. For very large purchases CEO’s of the buyer and seller meet to shake hands, but rarely negotiate at the CEO level. Negotiations are left to the Marketing folks of the seller and the Purchasing folks at the buyer.
More insights on CEO involvement in marketing and supply chain operations should appear from President Trump’s address tonight.