How Operations and Supply Chain Leaders Make Great CEOs

By Radu Palmariu, Managing director Asia Pacific and Chief Energie Officer, Alcott Global and Francisco Betti Head of Shaping the Future of Advanced Manufacturing and Production at the World Economic Forum

COVID-19 has helped accelerate the pace of corporate change. Flexible work arrangements and Industry 4.0 initiatives were in the works, but only five years away. Then… boom! All of this happened in days, weeks and even months. Many hidden truths were revealed by the pandemic. Chief Operations Officers and Chief Supply Chain Officers (CSCOs), for example, are well-positioned to be great CEOs.

This isn’t happening across all global organizations. It makes perfect sense for these three reasons.

1. Businesses are made or broken by their supply chains and operations

COVID-19 has demonstrated the importance of supply chains and operations, not just in the boardroom but in every room. They kept the world going even when everything was in chaos. CSCOs and COOs know how to create organizational resilience and build foundations for growth. CSCOs and COOs have the skills that future CEOs will need.

According to KPMG’s CEO Outlook survey, the CEOs identified supply-chain risk as the biggest threat to their company’s growth in the next three years. Supply chain risk is now a top priority for CEOs, along with cybersecurity risk and talent risk.

2. Leading digital transformation

CSCOs and COOs are using technology to transform company operations. This will lead to greater productivity and growth and better customer experiences, and enable the transition to net zero. They are the core of understanding the new normal. This noble mission requires sustained governance.

3. Balanced stakeholder capitalism

It is impossible to continue operating organizations in the same way as before. Before, top-line and bottom-line were all that mattered. Balance must be achieved between revenue, sustainability, and people. CSCOs and COOs are fulfilling the imperative of balanced stakeholder capitalism. They are not only aware of the importance of this promise but also “how” to transform businesses to make it happen.

Global supply chains can be a proxy for the major issues and opportunities facing businesses today. “Transformational leadership involves uniting diverse cultures and colleagues around a single vision, and ensuring that it delivers value to many stakeholders.” Sandra MacQuillan EVP and Chief Supply Chain Officer Mondelez International

It is clear that there are some skills gaps that must be filled in order for this dream to become a reality. Continuous learning is essential for supply chain and operations leaders. It not only helps them to improve their technical skills, but it also enhances their soft skills. Alcott Global conducted a survey on 120 executives from Fortune 500 companies to determine the three Cs of supply chain leadership. These are communication, collaboration, and change management. All these skills must be viewed from the perspective of the customer.

Pier Luigi Sigismondi is a former CSCO of Unilever and President Dole Sunshine Company. He says that it was possible for those who left their comfort zone to cross the bridge from COO/CSCO into CEO. To run a business, you need both breadth and depth. CSCOs/COOs have the ideal position to be CEOs, even before being officially appointed.

It’s not about delivering decisions made by other functions. Supply chain and operations must be an integral part business decision making. They cannot operate in silos any longer. For the transformation to have real ripple effects, these changes must be implemented simultaneously at universities and in boardrooms. This may seem like a fast pace. COVID-19 has shown us how quickly we can change things, and we don’t need another pandemic reminding us.

This article is part the World Economic Forum’s Jobs Reset summit.

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