A Profession Comes Of Age - Raise your game, Raise your voice (South Africa, 2014)

CIPS Global President Speech - 2014

Good Afternoon, Distinguished Ladies and Gentlemen,

It is a great pleasure to be here in Johannesburg, the city of gold and one of the world’s largest cities.

I have had several opportunities to visit South Africa and each time I am enthralled by its ambience and serenity. 

On every visit, I am reminded of the revered icon, the great Madiba, Africa’s own Nelson Mandela, and just 2 weeks ago the World celebrated ‘Mandela Day’ which served to remind the whole world what peace and forgiveness means. 

Permit me to welcome all those who came from outside of Johannesburg. I encourage you to get a feel of the city. I hope you also followed the travel advice for Johannesburg, which urged everyone to bring an extra, empty suitcase. If you did, you will not regret it, good old Jo’burg has many unique souvenirs. 

Let me also express appreciation to the organizing team for an excellent event and for consistently raising the bar. Thank you for your passion and hard work.

My name is Babs Omotowa, and I speak today in my capacity as President of CIPS.

I imagine that when I was announced President of the Chartered Institute of Procurement and Supplies in November 2014, some may have wondered who I was. This is especially as I had not previously been on the CIPS Board and was not a principal officer of CIPS. My journey to the CIPS presidency was unexpected. The board waived tradition to invite me to lead this great organization. I remain humbled and deeply grateful for the honor done to me and to Africa.

And for that reason, I always endeavor to introduce myself properly, every time I meet with colleagues who I previously may not have had the opportunity and honor to introduce myself.

I qualified as MCIPS in 1996 whilst working for Shell in Nigeria and subsequently participated in the Nigeria branch activities. I subsequently served as a CIPS examiner from 2002 and by 2006 I was honoured to be made a fellow.

 

Some of you may also know me from my current job as CEO of Nigeria LNG Limited, a $ 10 billion per annum revenue company, and that supplies 8% of the global liquefied natural gas market. Just to give an example of our impact globally, at some point, 40% of the entire electricity in Portugal was provided by gas supplied from the NLNG plant.

However, I began my career in procurement, working in the warehouse. Mine you can say is a classic story of rising from the storeroom to the boardroom. And I can tell you, without a doubt, that the tools and techniques I learned from CIPS enabled and propelled me to reach the heights of CEO of this global company. 

Many of you are MCIPS qualified and am sure can testify to the quality of the training and the attendant rigor that many professions have not been able to provide their members. Our institute educates and celebrates its members. That is a huge plus. It is also a mark of confidence that we can groom world-class talent.

But then, I am not the only one who came to the boardroom via the procurement route – Tim Cook of Apple, and Sam Walsh of Rio Tinto are among the CEOs of multi-billion dollar companies with similar backgrounds.

All these should, hopefully, motivate you to reach for the sky. CIPS prepares you for the very top.

Now coming back to the profession and my Presidential theme; Procurement has indeed come a long way since 1932 when the Purchasing Association was formed. It has moved from being a back office role to a strategic function and one that provides many organizations with a competitive advantage. We are now more of a strategic function.

I have had the privilege since November 2014 to visit and meet wonderful and inspirational members across the world, to share my vision, and also to listen to their ideas on how to make procurement the best profession in the world.

Without a doubt, the profession has indeed come of age but the world is also rapidly changing, and CIPS is in a unique position to shape its future for the century ahead.

My presidential theme message, therefore, is that: “It is time to raise your game and to raise your voice”.

You may find yourself asking, so what exactly does that mean?

Let me start with the aspect of “raising your game”.

It simply means developing your potential, honing your skills, and moving to the next level.

One way to think about this is to reflect on the Presidency of any country you know. You will immediately realize that winning an election is one thing, knowing how to work with parliament to achieve the manifesto is another. Obviously, more skills are required to run a country than are needed to win an election. Ask President Barack Obama, Ask Greece’s Prime Minister Alexis Tsipras, or any other democratically elected leader.  

As Mario Cuomo said; you campaign in poetry but govern in prose.

The essence of Procurement and Supply is about bringing value for every dollar spent - for your team, your employer’s business, for stakeholders, and for society at large. For several years, we had used inadequate metrics and drivers to gauge our progress such as price and discounts negotiated with suppliers. The traditional focus on price and ‘winning’, as opposed to ‘succeeding’ (win-win and value creation) limits our profession and as such we must reorient members, go beyond the traditional cost savings, and move to the level of adding value.

To do this we must understand the language of the business and how value is defined.

It sounds obvious, I know – but it is surprising how few people take the trouble to understand the differences.

Value naturally extends to the organization’s customers, which is where revenue comes from, it extends beyond customers, enterprise, and suppliers, it flows into society and we must always think of how procurement activities can impact positively the society we live in.

The opportunities for growth in Africa are enormous, especially with the vast natural resources, human capital, large markets, etc. The question then is what are the factors that have stunted Africa’s growth? These include government instability, poverty, inadequate funding, corruption, and infrastructural gaps (i.e. power, transportation, etc). Overcoming these drawbacks would be crucial to moving the continent from the ranks of underdeveloped to developed nations.

Insufficient infrastructure presents one of the biggest obstacles to economic growth and social development in Africa. For example, the 48 countries of Sub-Saharan Africa (population of 800 million) generate roughly the same amount of power as Spain (population of 45 million). This electricity gap, for example, affects the manufacturing sector which has remained at a low level over the years with the continent heavily dependent on imports; the imports of 46 African countries are an astonishing US$610 billion compared to US$586 billion in exports.

Raw materials are being exported out of Africa and processed and finished goods are being imported, which invariable means employment is being offshored, leading to a high level of unemployment in the continent.

This is part of the reason that we see thousands of Africans desperately clinging onto boats, off the coast of North Africa daily, trying to get to Europe. The reason for this is not far-fetched as the GDP per capita of most African countries is a paltry $3,000 and except for six countries with GDP per capita over $10,000, (Botswana, Equatorial Guinea, Gabon, Mauritania, Seychelles, and South Africa) and the implication is that 70% of Africans live below the poverty line and looking for better opportunities not available in their countries.

Against this backdrop you may be asking; what have these got to do with procurement?

A lot, I say. Procurement professionals have played a significant role in economic turnaround across the world and should have a meaningful impact in Africa, especially in delivering infrastructure cost-effectively and ethically.

These challenges portend huge opportunities for procurement and supply professionals to make a difference. How we help the continent address issues of infrastructure development, which has been bedeviled with corruption, will define the level of influence our profession will have in the continent.

We have an opportune time to raise our game and to seize the moment, if we don’t, others will fill the space.

Moving into the private sector, an example of procurement adding value is SABMiller; the world’s second-largest brewer, whose procurement team brought creativity into their sourcing roles and by so doing is dramatically changing the society where they operated.

Hop and barley are, traditionally, inputs for brewing, but by thinking differently about sourcing raw materials from localities that they operate, they made a difference in Africa by working with production and R&D colleagues, to utilize a popular crop called Cassava as input.

Cassava deteriorates rapidly after harvesting and so couldn’t be collected from the widely dispersed small farms to enable commercial brewing.  The team acquired an innovative mobile processing unit that travels to the cassava-growing regions and processed the root in situ.

As a result, SABMiller was able to launch two cassava beers – Impala in Mozambique and Eagle in Ghana, which has now created a new revenue source for SABMiller. This has also made previously poor farmers’, economically empowered. They have also now become a strong support group for the company. This gives a new meaning to smart procurement.

To raise our game, we must develop our skills and knowledge continuously and that is why we must be active in the Continuous Professional Development (CPD) and our ethical certification. We must continue to learn new approaches, new techniques, new skill sets, and new ideas and keep abreast of modern trends and societal needs. We must ensure that all those who are carrying out procurement activities in public and private in Africa are certified.

CIPS has about 2,591 members in South Africa and about 17000 across the rest of the continent, which represents less than 3% of those who practice procurement activities in the continent. We have a tall order and we must work towards ensuring that all procurement practitioners are licensed professionals in each African country.   

Furthermore, legislation is an issue in Africa and Public sector procurement needs modernization. Where legislation exists, the lack of compliance often is a drawback, which in essence makes the law ineffective and only leads to a culture of impunity or ‘business as usual’ which stifles the progress that we all earnestly desire.

Similar to what the accountants did 200 years ago, the licensing of our profession would help us step up to the unique challenge of the supply risks so that people’s lives are not being endangered or customers harmed from poor quality food, slavery, fraud, corruption, etc. We must take ownership and accept accountability for the supply chain.

The second part of my message is “Raise your voice”.  

Procurement professionals sometimes have great ideas for improving the business – not just by reducing costs but also by transforming processes and opening up new revenue streams, but they seem to be shy to raise their voices and be heard in their organizations and beyond. 

In my many years of working across several countries and companies, I have found that procurement people are shy; I don’t know why, but who knows, maybe you have the answers.

Maybe it is because the profession started as a back office and as such being upfront in approach is not second nature.

Maybe it is the conservative nature of our training. I am glad that marketing is becoming increasingly intertwined with our profession and training. I hope that will help our professionals in speaking up to be heard.   

Or maybe it is because the majority of CPOs do not report directly to CEOs.

Booz and Co reports that only 5% of Fortune 500 companies have CPO in C-suite whilst Ardent Partners highlighted that only 20% of CPOs globally report to CEOs.

Whatever it is, whether procurement has a direct line of communication to the top or not, the procurement professional needs to find a way to be heard. I know it is not easy, but take my word for it – a smart CEO will always listen to great and creative ideas. I am a CEO and I know that.

I always encourage Procurement professionals to share the success stories they have achieved in their organizations and careers so others can learn and possibly replicate. We have included this call in the supply management magazine and CIPS website, but till today we have only seen a few professionals come up to share their stories. I hope you will prove me wrong after today and begin to share your success story.

One good aspect however is the CIPS Awards, where we have over the years seen several organisations enter for the award to showcase the good work that they are doing. However those stories are used in the awards and apart from the winners, very little is known about all those who did not win, whereas their stories and several others who did not even enter for the awards, can also inspire others. We should print and celebrate more procurement success stories.

Back to the role of procurement in the African continent; the size of procurement is quite considerable as it accounts for a significant proportion of spending of every country or organization. Procurement is therefore an attractive instrument for the evolution of Africa into a developed continent and as a result, we have to make a difference.

Africa is the least developed continent on the planet, and it has been so for quite some time. Although many countries and international bodies are taking steps toward helping Africa’s development, there is a lot more we can do for ourselves to make the next curve.

Our challenges are not insurmountable, be it weak leadership, wars, youth unemployment, infrastructure gap, corruption, etc. and we cannot meet our enormous challenges with the old mindset or by folding our hands and waiting for a better day to come. Consider Ethiopia, war-torn and famine ridden 20 years ago, it is now rapidly becoming stable and a location for prosperity.

I believe there is no greater moment than now for us as procurement professionals in Africa to push innovative and creative solutions in public and private procurement. We need to make a difference. 

The continuous integration of the world through globalization, telecommunication, the internet, and social media are essential phenomena for Africa to accelerate its development. This can afford us the knowledge, insights, and best practices from across borders. The economic successes of other continents offer several good examples.

We have to play a leading role in ensuring infrastructures are delivered aptly, corruption is addressed, ethical standards are upheld across procurement activities, ensuring fair pay, etc.

As Procurement professionals, embedded within governments and organizations, we must contribute in a proactive, rather than reactive way to finding solutions to these issues and to seize the moment to change the face of Africa and as a result have the profession gain the recognition it deserves.

From the waters of the Mediterranean of North Africa to the pyramids of old, to the horn of Africa, over the hills and mountains of Kilimanjaro, right across the dusty desserts of the Sahara, to the wildlife of East Africa and down to the coast in the South, we need to raise our game and to raise our voice.

We must be seen and heard to fulfill Africa’s greatest potential, the next frontier for socio-economic transformation. As professionals who once were rigidly defined in static boundaries, we must now see prodigious change and boundary expansion. We must influence at senior levels, take ownership and accountability and we must now redefine and communicate the value add of this profession.

The sky is the limit and the time is now for procurement professionals to seize the moment and make a difference. Indeed, I look forward to a time when our profession is recognized as a strong force for tackling major global issues – and where procurement becomes a lead item on the agendas of bodies such as the United Nations, G7, World Economic Forum, etc. 

Finally, I say that the future of our profession is indeed bright — but it is not guaranteed. Capitalizing on opportunities will not just happen by itself. It requires strategic planning, political will, and courage to adapt to a changing world. And members will have to be willing to make significant changes in how they go about their business.

If we raise our game and raise our voices, I can say with certainty that our work will validate that we are a force for good.

I look forward to a time when more than 80% of CPOs in Africa will be reporting to CEOs, when 20% of CEOs in Africa are from procurement, and when Ministers arise from the profession.

This is my dream and one that I hold on to and I have no doubt it will happen in our lifetime.

Let us all go out there and make a difference.