When choosing a new leader to sit at the helm of a major multinational company, there’s no such thing as a low-risk appointment. So, it’s no surprise that more than three-quarters of current Fortune 500 CEOs are internal appointments. Sure, outsiders can bring valuable new perspectives and approaches but, when it comes to the crunch, it’s a lot safer to give the top job to someone who already knows the business inside and out.
Looking inside the company for a new CEO
No one knows the day-to-day details better than the Chief Operating Officer (COO). Just ask Tim Cook, who spent half a decade as COO at Apple prior to becoming CEO of what is today one of the most valuable companies in the world.
Apple’s share price has risen 4x over the past five years alone, and much of this success can be traced back to decisions Cook made while he was COO, such as paring back the number of supply chain vendors, adapting advanced manufacturing models and forming critical deals with manufacturers on flash memory.
In an era defined, on the one hand, by the pursuit of global brand dominance and, on the other, by the relentless need to satisfy shareholder and market expectations, COOs aren’t always the most high-profile choice for the top job. But as Tim Cook’s journey shows, they’re more than capable of making the transition. However, the business world is ever-changing. The past few years have forced Fortune 500 firms to battle relentless macro headwinds, from COVID, geopolitics and trade wars, to inflation, talent shortages and heightened environmental and sustainability pressures.
Boards have been forced to relearn the time-honored truth that business success is ultimately defined by operational efficiency and resilience. In the vast, complex and interconnected global marketplace, this means focusing on supply chain supremacy.
It’s why more and more Fortune 500 firms are adding dedicated supply chain roles to the C-suite. And it’s why today’s Chief Supply Chain Officers (CSCOs) could be in pole position to become tomorrow’s Fortune 500 leaders.
From COO to CSCO (to CEO)
There’s already plenty of precedent here. From Mary Barra at General Motors to Gerry Smith at The ODP Corporation and Christophe Beck at Ecolab, a growing number of companies have appointed supply chain executives as CEOs in recent years.
Supply chain leaders are on the hook to deliver top-line business value like never before. The mainstream media constantly scrutinises supply chain performance, as external shocks come thick and fast. Not only that, but quarterly calls with Wall Street analysts frequently focus on supply chain successes and failures. Supply chain performance underpins shareholder sentiment, influences stock prices, and could even determine a company’s future license to operate.
It’s a tough gig, but it’s also giving supply chain leaders an unmatched opportunity to hone their approach, think strategically, and showcase their skills. The nature of the CSCO role lends itself to individuals who possess several key leadership qualities necessary for success at the very top level.
Winning CSCOs must immerse themselves in every facet of end-to-end operations to balance supply and demand. They’re comfortable with accountability – they have to be, as the buck always stops with them. They’re analytical and data-driven, well-versed in problem-solving (because the next problem is always around the corner), which means they’re able to stay calm and think clearly in a crisis.
Not only that, but as seasoned practitioners who began their careers on the shop or factory floor, they’re empathetic and humble, commanding the respect of their subordinates as well as their boardroom peers. In short, CSCOs have the skills and the temperament required to assume the greatest corporate responsibility of all.
CSCOs are digital transformation champions
And there’s another critical factor working in their favour: digitisation.
Right now, the entire corporate world is seeking to embrace AI and enter a new era of digitally driven productivity and profitability. There’s a growing convergence of supply chain and IT within many of the world’s largest organisations. It’s an accepted reality that the supply chain leaders are far better placed than the chief technologists and innovation officers to make digitisation an operational reality.
Fortune 500 CSCOs are already leading the digital charge, figuring out which technologies to embrace and where to deploy them, as well as determining the future talent requirements and upskilling necessary to deliver AI-powered, 100% digitised supply chains. This immense task requires rethinking several decades of normalised business practices and embedded behaviours and convincing their board to back them at every stage in the journey.
In this respect, the plight of the CSCO is synonymous with the race to embrace AI. The Fortune 500 firms that successfully reorient their businesses around AI will be the ones that win, and win big, in the long run.
Likewise, the CSCOs that succeed in their digitisation mission will have passed the ultimate litmus test – the requirement to lead.
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