Procurement Intelligence Unit

At a forum recently held by Procurement Leaders in Chicago, 77% of attendees were male, showing that procurement is still very much a man’s world.

The attendees at the forum were from various management levels, but the majority of female participants were middle management. The small percentage of women in procurement in general does not translate well when looking at the number of women in the function that reach the top level, where less than 10% of CPO’s are female.

There is no denying there are inspirational and successful women in procurement. You only to had listen to Caroline Booth of TD Bank speak at the forum to realise this, but women at the top-level in procurement is rare. There will always be exceptions, Leslie Campbell of Reed Elsevier, Kath Harmeston of Royal Mail, Julia Brown of Kraft or Gill Cairns of Northern Rock – but the general trend points in the other direction.

The Economist recently released their, “Women’s Economic Opportunity Index 2012”. It clearly showed that there are still barriers in certain areas of the world that prevent women entering the workforce, such as unequal pay, lack of access to financial institutions, legal or cultural restrictions and political barriers. However, the United States, Europe, Canada, Australia, and New Zealand - effectively the majority of the ‘developed world’ fell near or in the top quartile of the index. The headquarters of the majority of procurement teams are based in these regions or operate in these regions, so why the discrepancy? Especially when compared to the sales, marketing or HR functions?

It may be argued that women, i.e. the female CPO are a rare breed due to a general trend in business and the wider world. Equality and suffrage may be prevalent in much of the developed world but it was only in 2010 that the first female won “best director at the Oscars”, or if you look down the list of Nobel Prize winners, you will see the list is clearly dominated by men.

Talent and ambition are often cited as reasons why women cannot break through the glass ceiling in numerous functions. In many companies, even those based in the Western world, there are still large pay and opportunity discrepancies. Our salary survey that has recently taken place suggests that procurement is not the exception to this rule. At entry and middle management levels in many organisations, women occupy a relatively high percentage of positions, but getting to the top job is often hindered by general norms, a patriarchal corporate culture and a lack of role models.

There are numerous reasons put forward to explain the lack of females at the top of corporate companies, including functions such as procurement. For example, raising a family may be a substantial barrier, especially in developing countries. However the Economist’s Opportunity Index clearly shows that in many developed countries such as Sweden, Norway, Denmark, Australia etc. the respective governments have implemented policies to ensure that childcare is provided at affordable rates. In a recent conversation with a leading female in a German-based company it was mentioned that it is still a challenge for women to find a well-balanced solution between their professional careers and their private lives, especially in today’s work environment that often requires mobility and flexibility. Companies in Germany are beginning to adapt, in order to better support working mums, by providing nurseries and also holiday programmes. Hopefully this is a trend that is spreading.

The general notion that women are not breaking the glass ceiling may not be entirely true, perhaps procurement is being left behind. Numerous companies are beginning to buck the trend, one of the most prominent is Office Depot. The company has developed an internal culture that helps to identify and promote successful female employees. The results of Office Depot’s learning and development programmes are clear for all to see: female executives secured 36% of all promotions to senior management roles, and a staggering 41% of promotions to director or senior director roles. Office Depot has initiatives in place to develop all talent, but a number of these such as their ’put your career in motion’ programme have helped in identifying women suitable for high-level roles. Now 31% of those who report directly into the CEO are women and over 20% of those in charge of departments with revenues over a billion are also female.

It is known that countries with the smallest gender gap have the greatest productivity and economic competitiveness, so many institutions, corporates and governments are pushing the issue. Europe, and the UK in particular, are at the forefront with regards to driving this change. In 2010, 12.5% of directors in the FSTE 100 were women, this has since increased to 15.6%. This progress certainly appears positive, however there is a catch to this promising growth – the glass ceiling. The number of female non-executive directors has risen from 15.6% to 22.4%, while the number of executive directors has only risen from 5.5% to 6.6%. So it seems women are four times as likely to be appointed to non executive-director level than to an executive director-level position.

If we look to functions such as procurement and why women are not breaking through the glass ceiling, it may be attributable to aforementioned reasons but there may also be other factors at play, such as many procurement professionals having a background in finance or engineering, predominantly male dominated fields.

One of the best ways to combat the issue of gender diversity is to build a talent pipeline. Talking recently to Gundula Habsch, Head of Procurement Strategies at Cassidian, I discovered that despite a current gender gap at top level, Gundua believes this will be reduced in the coming years due to numerous talented and ambitious women in the function, particularly in the levels twice removed from the CPO. This is largely as a result of the organisations’ commitment to build their talent pipeline and promoting and fostering diversity with the company.

Several of our previous blogs have suggested procurement doesn’t advertise itself enough to graduates. I recently approached a number of graduates from well-regarded institutions. They were not only unaware of what opportunities exist within procurement, they were not even aware that such a function existed. The number of women who now are in higher education in the Western world has reached 50%, and this is an untapped source of talent that procurement needs to market itself to.

Julia Brown – VP of Procurement at Kraft herself entered the procurement function not long after graduating. In an interview with Procurement Leaders, she admitted that purchasing was not her first choice but once she was involved in projects she began to realise the potential that procurement had in influencing the wider organisation. A career in procurement at that time was not viewed with as much esteem as other functions, as it was largely a tactical function. However having transformed to a much more strategic and influential function over the last decade; procurement should now be viewed by graduates as a more appealing career path. Julia forged her career path early on by focusing on the importance of communication and interpersonal skills. She is now delivering impressive results at Kraft by fostering a culture of innovation and flexibility with her suppliers, while employing a strategic approach.

Procurement needs to promote itself in such a way that it becomes as well known as sales, marketing or HR. This in itself will naturally begin to re-address the gender gap that exists in procurement. Other industries and companies are already doing this; Google recently implemented ‘Code F’, a program that pairs senior female employees with aspiring female members of staff, creating a role model and a female source of inspiration within the company. The key to encouraging the elevation of women in business, as mentioned previously, is to push them through a structured pipeline.

Procurement may have been reflecting a trend in the wider business world with regards to the elevation of women to top positions, however that trend is beginning to change, and there have already been great developments in certain functions and industries. Companies such as Office Depot have shown that the female talent is available, and in many cases it is the cultivation of talent that is key to identifying future leaders. Procurement may not currently have the pipeline to have numerous women in top positions, but this is something that can be rectified. The few females CPO’s out there are a testament to breaking the mould and pushing women forward in the industry and the procurement function. Procurement needs to start looking at its potential talent pool and start advertising itself more, not just to encourage a female talent pipeline, but to also attract the best graduates that are out there.