Is Your Chief Supply Chain Officer the Next ‘CEO’?

By Stan Aronow | April 22, 2022 | 0 Comments

Supply ChainBeyond Supply ChainSupply Chain Strategy, Leadership and Governance

Our community celebrates leaders who have famously scaled the operational ranks of their industries to ultimately become chief executive officers — Apple’s Tim Cook, General Motors’ Mary Barra and the like. These stars stand out further due to their small numbers.

Historically, heads of supply chain and operations have been known as the steady hands on the wheel… sitting below deck and out of sight. These were not the crazy dreamers launching new products or the strivers landing new customers through sheer force of will. Supply chain’s brand was operational excellence and the responsible (stifles yawn) stewardship of corporate assets. Even five years ago, a corporate outsider might wonder whether the head of supply chain was in desperate need of a brand makeover.

But a funny thing happened on the way to our current era. Supremely responsible CSCOs have been steadily handed more and more scope. They have driven outcomes through networks and increased adaptability, agility and resilience in the face of escalating customer requirements and a perpetually disrupted environment. It has dawned on boards and executive committees that these leaders possess just the skills needed for the broader business to survive and thrive.

But don’t just take my word for it. Let’s play a quick game of “who owns it?” Every year, as part of Gartner’s Supply Chain Top 25 study, our analysts gather information from dozens of companies voluntarily sharing their supply chain’s strategy, governance and transformation initiatives. The above chart represents the subset of these companies — reporting in 2022 — that made either the 2021 global supply chain Top 25 or masters designations.

This cut of the data relates to the reporting relationship of various enterprise functions. Not surprisingly, traditional supply chain functions such as planning, sourcing, manufacturing and logistics are almost exclusively direct reports of the supply chain leader. Likewise, adjacencies such as risk management and corporate quality most often work for the CSCO. Further across the executive aisle, it is impressive to see substantial supply chain ownership of customer service/experience (73%) and new product introduction (50%). Environmental, Social and Governance (ESG), which houses sustainability and DEI (two of the great challenges of our age), is owned often enough (59%) that many of the supply chain leaders in our community also bear the title of chief sustainability officer. Similarly, we’re seeing a significant number of CSCOs take on a broader role in technology and cybersecurity, as the majority stakeholders for enterprise systems. Sometimes, when enough organizational mass has accumulated around the supply chain nucleus, the leader simply becomes the chief operating officer.

This expanded responsibility has been recognized and rewarded in the C-suite. Nearly half of this group’s supply chain leaders report directly to the corporate CEO.

Meet Your New ‘CEO’ … Chief Ecosystems Officer

While supply chain’s profile has certainly risen within the four walls of the enterprise, this is dwarfed by the growing interplay and influence we see in the spheres of governmental policy, geopolitics, macroeconomics, global sustainability and even community social cohesion.

Supply chain leaders are moving beyond simply representing their own companies’ interests in the public sphere and forming coopetition-based ecosystems to drive outcomes that can only be delivered at broader scale. Our current environmental crises will only be solved through this type of ecosystem collaboration and cooperation.

So, what should we call this expansionist CSCO role? Does the COO title suffice, or do we need to bring in a branding expert? How about “CEO” or chief ecosystems officer? It’s more reflective of the broad and interconnected role, as it exists today.

Perhaps it might also cause some positive confusion in the C-suite.

Stan Aronow
VP Distinguished Advisor
Gartner Supply Chain
Stan.Aronow@gartner.com

 

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