Forum Institutional

Why operations and supply chain leaders would make great CEOs

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Building organizational resilience is key to the success of CEOs in a post-pandemic world. Image: Freepik.

Radu Palamariu
Managing Director Asia Pacific and Europe, Alcott Global
Francisco Betti
Head, Global Industries Team; Member of the Executive Committee, World Economic Forum
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This article is part of: The Jobs Reset Summit
  • Building resilience and balancing sustainability, revenue and jobs will be crucial post-pandemic.
  • COVID-19 has highlighted the critical role that COOs and CSCOs have in maintaining organizational stability.
  • We reveal three reasons why these core functions are well positioned to become future CEOs.

COVID-19 has accelerated the pace of change in corporations. Industry 4.0 initiatives and flexible work arrangements were on the cards, but maybe five years down the line. Then… boom! Everything happened in a matter of days, weeks, and months. The pandemic brought a lot of hidden truths into the light – one of them is the fact that Chief Operations Officers (COOs) and Chief Supply Chain Officers (CSCOs) are well positioned to become great CEOs.

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Yet, across global organizations this is not happening yet. Here are three reasons why it makes perfect sense.

1. Operations and supply chains make or break businesses

COVID-19 has showcased the importance of operations and supply chains, not only in the boardroom, but also in everyone’s dining room. When everything else was chaos, they kept the world running. COOs and CSCOs have already experienced the need to build organizational resilience and lay foundations for growth and new business models. COOs and CSCOs already possess the skills that every future CEO need.

In the last 12 months KPMG’s CEO Outlook survey, CEOs identified supply chain risk as one of the greatest risks to company growth over the next three years. Together with talent risk and cybersecurity risk, supply chain risk has become top of the CEO agenda.

2. Leading digital transformation

COOs and CSCOs are leveraging technologies to transform company operations, leading to increased productivity and growth, better customer experiences and enabling the transition to net-zero. They are at the heart of making sense of what’s important in the new normal – it is a worthy mission that needs sustained governance to the top position.

3. Addressing balanced stakeholder capitalism

We cannot continue running organizations like before, where bottom-line and top-line were the only metrics that needed attention. There needs to be a balance between sustainability, revenue and people. COOs and CSCOs are delivering on the balanced stakeholder capitalism promise and imperative. They not only know the importance of this promise, they also know “how to” transform businesses in order to make it happen.

“Global supply chains are a great proxy for the seismic issues and opportunities businesses at large are facing today. Transformational leadership is about mobilizing vastly different cultures and colleagues behind one vision and ensuring that vision delivers value to a variety of stakeholders.” Sandra MacQuillan EVP & Chief Supply Chain Officer Mondelēz International.

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There are definitely some skill-gaps that need to be bridged for this to become a reality. Our operations and supply chain leaders need to embark on the journey of continuous learning that not only equips them with technical skills but also builds their soft skills. In a survey done by Alcott Global on 120 executives of Fortune 500 companies, the key soft skills to focus on are the 3Cs of supply chain leadership: communication, collaboration and change management. And all these skills need to start with the customer in mind.

As someone who has walked the path, Pier Luigi Sigismondi, now President Dole Sunshine Company and former CSCO of Unilever, says: “Crossing the bridge from COO/CSCO to CEO has been possible to those who moved out of their specialist comfort role. Both breadth and depth are essential to run a business. COOs/CSCOs are ideally positioned to act as CEOs if they choose to, even before they get formally appointed to such role”.

It is no longer about delivering the decisions taken by other functions, supply chain and operations need to be an integral part of business decision making – they cannot work in silos anymore. These changes need to start at our universities and in our boardrooms, at the same time, for the transformation to really create ripple effects. If that seems like an accelerated pace, remember COVID-19 has already shown us how fast we can change things and we don’t need another pandemic to remind us of that.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Forum InstitutionalLeadershipSupply Chains and TransportationManufacturing and Value Chains
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