5 must-deliver skills for becoming a supply chain leader

Supply chain has always been an essential business function, but only recently has it begun to gain recognition for the central role it plays in a company's success. Without a well-functioning one, businesses are at risk of failure, so there’s probably never been a better time to be a supply chain executive. The events of the pandemic have only further highlighted the importance of interconnected global supply chains and the need for an efficient response to disruptions to deliver on promises to customers. The result is that, in today’s context, Chief Operations Officers (COOs) and Chief Supply Chain Officers (CSCOs) are key candidates for becoming successful CEOs.

The path to success in supply chain management is varied and complex. However, through conversations with leading CSCOs and COOs, a framework of competency development known as CHAIN has emerged. The CHAIN Leadership Model seeks to develop the most important skills needed to lead a successful supply chain and business:

One of the most common challenges supply chain leaders are faced with is the lack of end-to-end supply chain collaboration, which can lead to inefficiencies, reduced profits and dissatisfied customers. Beatrix Praeceptor, CPO of Mondi Group believes that: “A high-performing supply chain is not so much about processes and tools as about people collaborating and communicating effectively.”

Too often, procurement teams may be able to find cheaper parts, only to find that they create more complications and higher logistics costs. To minimize avoidable costs, supply chain leaders need to promote the right attitude within their teams and adopt technologies that offer better visibility into their value chains.

Taking end-to-end supply chain collaboration to the next level means having a holistic view of the entire business and focusing every decision on the customer. Leaders should embody a customer obsession culture, as defined at the top of Amazon’s leadership principles.

Pier Luigi Sigismondi, President of Dole Worldwide Packaged Foods, puts it succinctly: “Good leadership needs a grasp of the end-to-end business. Good leadership needs to understand what it means to operate a business. For a company to truly leverage supply chain operations, it is critical to listen to consumer feedback and channel it upstream to improve products and services.”

To be holistic supply chain leaders, having an in-depth knowledge of the industry must be combined with an ongoing commitment to learning. This will enable leaders to identify effective solutions that prioritize customer satisfaction while optimizing supply-chain operations. A great starting point for learning is the continuous exposure to other areas, disciplines, skills and ideas, through networking with peers, reading books and articles, and seeking insights from other fields. Doing so, leaders will stay ahead of their competition and continue to be at the forefront of supply chain success.

Preparing proactively, responding flexibly and converting crises into opportunity are the cornerstones of being an adaptable leader. In the complex and ever-changing supply chain and macro trends of the world, a leader cannot fixate on a single strategy. A pre-pandemic McKinsey Global Institute study found that companies are likely to experience disruption of up to two months every 3.7 years; this highlights the importance of being ready for the unexpected. Adapting to the pandemic was only the start – leaders must learn to be prepared for any future crises and make the most of the opportunities they present.

Chouaib Rokbi, Executive Vice-President of Digital Transformation and IT at STMicroelectronics, strongly believes that leaders should create a culture where their ideas are questioned and challenged. “Flexibility in your ideas is key in your leadership,” he says, “especially in a business environment where it isn't always easy to interpret the true nature of a situation and thus to fix on a single strategy.”

Successful supply chains rely heavily on the effective cooperation between a variety of partners and stakeholders – both internal and external. A key component of successful supply chain management is the ability to influence these partners and stakeholders. This requires effective communication, ensuring that not only the mission of the supply chain is understood, but that each team member is aware of their individual role in achieving that mission.

Jim Rowan, President and CEO of Volvo, believes that emotional intelligence is an essential catalyst for effecting positive change on operations. “Ultimately, the supply chain is a people’s business, no matter what you’re building. It’s about getting the best from individuals and building strong, cross-functional teams,” says Rowan. You may have the best tech solutions and high analytical skills, but the most critical skill remains influencing and in a number of situations, influencing without authority.

Supply chain is not simply numbers on a spreadsheet, but rather a living story and the lifeblood of the business. Data uncovers valuable business insights, and successful supply chain leaders take a valuable seat at the business table when explaining them to the other business stakeholders through impactful and concise narratives.

Research from 2021 found that 70% of employees said that their sense of purpose is defined by their work, therefore meaningful work matters. When supply chain leaders effectively convey their vision through powerful narratives, that clarify the impact of individuals or teams in the end result, they motivate and drive their teams, colleagues and partners to success.

Ken Allen, CEO of DHL eCommerce and the leader behind turning around DHL Express, a story he has chronicled in his book Radical Simplicity: How Simplicity Transformed a Loss-making Mega Brand Into a World-class Performer, credits his success to creating a strong narrative and getting his team’s buy-in for the transformation. "I sing inspirational songs during meetings and encourage people to sing along. Songs aren’t just to sing: they are a simple and easy way to communicate, and to understand." Allen says the real heroes in the organization are not the leaders who sit at the top of the organizational pyramid, but the ones who follow through with great business plans.

Drawing inspiration from the examples of leading CSCOs on how they have leveraged their competencies to effectively lead their supply chain organizations, supply chain leaders and professionals should master the CHAIN Leadership Model as a basis for strong business decisions, continuously challenging the status quo that supply chains are a “back-end” function that we only remember in times of crisis.

Quotes excerpted from the book From Source to Sold with permission from authors Radu Palamariu and Knut Alicke, Partner at McKinsey & Company