The role of leadership in the supply chain crisis response

Throughout the year, Turnaround Talk has spoken about the smart moves that can be made to address the global financial crisis in 2023.

Make no mistake, this is a growing crisis and one that will top business agendas in the new year. Companies need to assess the impact that the crisis will have on their businesses and the possibility that this crisis can place their company into financial distress.

While smart moves can be made to negate the worst impacts of the crisis, the leadership of companies still play a major role when it comes to responding to the crisis.

Align your leadership

The article points out that it almost goes without saying that executing across your supplier network will require strongly aligned and collaborative leadership within your own organization. The multidisciplinary, cross- functional nature of supply chains resist silo-based approaches.

If your company doesn’t have a small, senior, cross-enterprise team tasked with finding resolutions for your toughest supply chain problems, it may be time to create one. That team should draw on the company’s expertise in advanced and emerging technologies, as needed, to tackle the most critical issues facing the supply chain, and in particular the ones that can’t be resolved quickly at lower levels. Those issues might include how to rebalance the supply network to mitigate risk or reduce dependency on a given country or region—a decision that also involves cost questions, as discussed above.

The article adds that, although many companies create rapid-response teams in the wake of sudden shocks, the current challenges facing supply chains call for an “always-on” cross-enterprise team. As recent research has found, managers learn from past shocks but still have difficulty preparing their operations for the next extreme disruption.

Senior leadership teams need to take steps to cascade their decisions through the organization, which provides transparency, increases the adoption of decisions, and helps the leadership team to speak with one voice.

The article points out that all members of that team will need to understand the different perspectives their peers may bring to supply chain decisions and endeavour to bridge them where possible. PwC research finds, for example, that COOs and CFOs are currently more conservative in their appetite for the digital transformation investments that provide a foundation for connected supply chains. This may be due to an intensified focus on shorter-term results amid rising inflation and demand-side challenges.

Heightened importance

The article adds that, regardless of the reason for differing perspectives, the heightened importance of supply chains will require more top-team functionality and collaboration. Some companies might begin to rethink C-suite roles in a way that blurs traditional functional responsibilities. For many organizations, the work might start with redefining the role of the chief operating officer and creating new modes of collaboration between that executive and the chief commercial officer, chief information officer, chief data officer, chief tax officer, and chief financial officer. It might be that a new supply chain role emerges in the C-suite, one that has a broader remit over the resilience of operations, customer acquisition and retention, risk, sustainability, and technology development. Regardless of the organizational preference, the supply chain imperative is, without doubt, a complex problem that requires novel solutions. No one part can be isolated from the others. That means the team at the top of your organization may need to reinvent itself.

The article points out that, for business leaders, the challenge of helping their companies navigate global supply shocks requires strong and steady thinking—and a recognition that there will be more crises to come. Moving smartly now can help them ensure that their supply chain organizations not only survive the current crises but get ever more resilient and oriented for growth in the future.

Phahlani Mkhombo is the MD of Genesis Corporate Solutions and is a Senior Business Rescue Practitioner