Securing Executive Leadership Commitment for SCRM

By Neil Shister, Editor

John Brown arrived at The Coca-Cola Company in April 2008 well-seasoned in what it takes to raise the profile of supply chain risk management and get the attention and support of senior management. The task was made easier due to an existing recognized need for technical risk management within business units and certain corporate functions, which has helped given the Company’s complex business model and supply chain.

At Heinz, the engineer- and MBA-trained Brown spent the last few years of a 17-year career leading a global operational risk management initiative, and was actively involved in implementing a broader enterprise risk management program. Within those few years, risk management reported through finance, then legal, and at the time of his departure, into an Office of Risk Management.

His position at The Coca-Cola Company was created to develop an integrated approach to risk management within the Technical Stewardship group, which encompassed quality, environment and water, worker safety and health, and science and regulatory affairs. In a subsequent reorganization, Brown now reports up through supply chain development, culminating with the Vice President of Supply Chain and ultimately with an Executive Vice President in charge of supply chain plus company-owned bottling operations. “The scope of our risk management mandate was broadened,” he says.

Through his experience, he has come up with what he calls ‘The Three Principles of How to Talk to Executive Leadership (and Build Support for Supply Chain Risk Management)’:

(1) Put Yourself In Their Shoes:

“The higher you get in an organization, the more strategic the view becomes. Familiarize yourself with how top management sees the company. Learn the company’s operations.

“Start with your boss, then his/her boss, and then their boss to understand the scope of their responsibilities in a complex supply chain. Supply chain risk management is a relatively new area that includes a broad range of people and functions---all the way from those who have dealt with insurance most of their lives to business people to technical folks.

(2) Demonstrate the Value Proposition that Risk Management Brings to their World:

“The most difficult part of a job is to say in black-and-white, dollars-and-cents what the value is. If you’re in risk management, and you’re doing your job well, there’s no perceived need for the role.

“A great approach is to understand risk management at your company from the ‘inside-out’. Look at historical events, crises the company has weathered. Attach real cost to those events and show how the situation may have been helped by a risk management program. Most of the time you can get enough information to demonstrate value that will pay for a risk management program many times over.”

(3) Put Your Message in Language They Understand:

“Most technical people get caught up in the details of what they do, but you have to be able to see beyond this narrow focus.

“Don’t go into a finance person and talk engineering: learn about financial aspects of the company and the terminology. Translate tangible benefits and costs into those terms (e.g. “we could lose 5% of net income if this particular risk event were to manifest itself”).

“Same with legal. If you can say ‘we can prevent a non-complying event from creating an incident that would create legal liability’, they’re all for it! Remember, it’s their responsibility to keep the company out of trouble.

“Finally, the higher up you go, the less time people have to listen. Communicate in ‘sound bites’ that don’t last more than 30 seconds and are right on target. If your PowerPoint message takes more than three or four slides, you’ve lost them!”

With respect to getting support for supply chain risk management, Brown’s objectives go beyond people and money. “We’re looking for active participation from senior management in using risk knowledge in their messaging, in their intelligence gathering and in their decision making.” His ideal: to see risk intelligence seamlessly integrated into annual business planning and strategic planning processes.