Supply chain management has changed dramatically since the economic downturn of the last decade. Successful supply chain managers have always known how to cut costs while increasing efficiency and profit. They now also know how to analyse every step in the supply chain, find opportunities to add value for the customer, and gain a competitive advantage over industry rivals.
With their skillsets and knowledge of what makes a business successful, you would think supply chain managers would be at the top of the list of candidates for general managers and even CEOs. Indeed, there are some prominent cases of people like Tim Cook, CEO of Apple, making the jump from supply chain management to general management.
But, the path from the supply chain to the boardroom is not as well-trodden as you might expect. There’s a still a lot of old-school thinking in boardrooms that prevents them from seeing that the next generation of potential general managers, and even CEOs, have been right there all along, managing supply chains. With the right shift in perception, that can all change.
What supply chain managers do
The supply chain comprises every step a business takes to make a product and deliver it to the customer. Raw material procurement, manufacturing, storage, transportation, wholesaling, and retail make up the links in the supply chain. Skilled supply chain managers oversee every link in the chain and seek to add value to every step. Their deep understanding of business practices, and relationships with both internal and external stakeholders, make them indispensable to a company’s success. If they can cultivate the necessary extra skills while working in the supply chain, they can be ideal candidates for general management.
The hurdles in the way
Despite their broad skill sets, supply chain managers still face many hurdles in the path to general management. Supply chain managers are experts at making cost/benefit analysis decisions with known data. They deal in hard facts. They know how to cut costs, increase efficiency, and add value to tangible products.
General managers, on the other hand, have to make difficult decisions with limited information. They deal with risks and opportunities. They also cut costs, increase efficiency, and add value. But, they deal in intangibles. They need to develop the proper instincts, and learn to harness these instincts while making strategic investments.
Supply chain managers who are looking to become general managers need to consider the big picture while working on the supply chain. Doing this will allow them to more comfortably make the jump from adding value to products, to adding value to the company as a whole.
Supply chain managers may also find it difficult to invest strategically and drive demand when they become general managers. Traditional supply chain thinking considers cutting costs and increasing efficiency, but does not necessarily consider how to invest and foster growth. The age-old saying, “you have to spend money to make money” applies here. Traditional supply chain managers don’t like spending money, and a reorientation of this thinking may be required if given a promotion.
Moreover, supply chain managers have to cultivate many important relationships with people like manufacturers, distributors, and wholesalers while working in the chain. But they have less experience dealing with people like investors, bankers, analysts, and lawyers. For general managers to be effective, they need to know how to manage these relationships, too.
Jumping over the hurdles
Ambitious supply chain managers should anticipate future career opportunities. If they want to become a general manager or even CEO someday, they should start broadening and developing their skills as early as possible.
Driven supply chain managers should seek mentors among successful general managers, and observe their behaviour. When they make the jump to the boardroom, they can emulate that successful behaviour.
They also need to develop experience across functions and learn about sales, marketing and finance. Some companies even have formal programmes to rotate supply chain employees through other functions. But these formal programmes are uncommon, and so an ambitious supply chain manager needs to take the initiative. This means pouncing on every opportunity to work on other projects, even if those projects don’t necessarily mean any immediate improvement in career prospects.
A new understanding of the customer is also needed. Value chain thinking, where supply chain managers analyse every link in the chain and figure out how to inject value for the customer, will help with this. But supply chain managers also need to round out their knowledge, by learning what drives and motivates the consumer. To do this, they need to be forward-looking and may have to create these opportunities for themselves.
Furthermore, supply chain managers need to build strong teams. If they surround themselves with talented professionals in sales, marketing, and finance while working within the supply chain, they can learn from these other leaders and even bring some of them along when they transition to general management. Every executive knows the importance of surrounding themselves with talented people and building strong teams.
Finally, ambitious supply chain managers need to make their intentions known. They should make it clear that they want to broaden their responsibilities with the intention of gaining cross-functional experience that will one day serve them in the boardroom. They need to be their own advocates.
From the supply chain to the boardroom
Today’s CEOs face a lot of challenges. They have to understand, and rapidly adapt, to an astounding level of technological advancement and changing global power dynamics. Supply chain leaders, who have invaluable knowledge of cutting costs, increasing efficiency, and adding value to products, have traditionally been overlooked as potential CEOs. It’s time for that to change.
Forward-looking CEOs need to raise the profiles of their supply chain managers, so they can gain the necessary cross-functional experience to become the executives of tomorrow.
Traditionally speaking, the road from the supply chain to CEO is not well-travelled. But supply chain management has evolved dramatically since the economic downturn of the last decade. More focus is now put on value creation, which makes supply chain managers the ideal candidates for future management positions. They just need to be given the right training and opportunities first.