Why trust is a must for CPOs & how to champion it
February 11, 2021
February 11, 2021
From coronavirus to climate change, the world faces existential crises that can only be solved through cooperation and coordinated action. The same is true for cultivating trust—one of the three keys to building a responsible future in business along with net-zero operations and circular economy practices.
So in the spirit of cooperation, we’ve come together to explore the issue through a dual lens that reflects our backgrounds both in sustainability and procurement. Both of us help our clients work at the intersection of business and technology to fuel innovation and growth. And both of us agree on this: acting now for a sustainable future is a critical and urgent business imperative.
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When companies experience a drop in trust, they experience a material decline in revenue. 54% of companies on the Accenture Strategy Competitive Agility Index experienced a material drop in trust and conservatively lost out on US$180B in revenue.
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Meet the trust gatekeeper
Trust wasn’t top of mind of procurement leaders even as recently as last year. This is changing fast as a result of growing stakeholder interest in (and demand for) action on social and environmental responsibility. All of it amplified by the pandemic year.
Something else is changing fast. CPOs are recognizing the unique relationship between their role and trust. When we as consumer trust our brands then that responsibility lies firmly with the CPO. CPOs are ecosystem builders who oversee external relationships with suppliers that can make or break corporate reputations. They are the trust gatekeepers. As a result they have a big responsibility to live up to.
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CPOs want to identify and reduce social and environmental risks in their supply chains to build trust.
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A high-stakes environment
Being a trust gatekeeper is one thing. Actually building trust to operate responsibly and manage the social and environment risks associated with the supply network is another. With global supply chains, companies have to develop a much deeper understanding of product origins and supply chain risks to do this well. Culpability extends across the ecosystem. A trust gap in one part of the value chain can create a ripple effect of impact across the rest of it.
This dynamic is a massive liability amid endless news cycles and stories that go viral in seconds. When the world is watching, trust hangs in the balance. And sadly, there are many risks associated with the supply network—from human trafficking and child labor to pollution and bribery and corruption.
Where trust meets technology
So how can CPOs begin to protect and build trust in this high-risk environment? While it’s no silver bullet, technology is an exciting enabler here. Consider just some of what we’re seeing. Blockchain’s track-and-trace capabilities are improving food safety. Near real-time satellite imagery is ensuring that land used to grow crops isn’t connected to deforestation. And artificial intelligence and machine learning are identifying markers and flagging discrepancies that humans alone can’t identify.
In addition to game-changing use cases like these, technology is reducing social and environmental risk because it’s the muscle behind getting to scale. After all, the “decade to deliver” will never fully materialize if we can’t get past the slow and isolated progress that comes from a sea of pilots.
Five actions for purpose-led procurement
Let us be clear that leveraging technology is just one part of what CPOs need to do to strengthen trust and build a responsible future. As exciting as it is, it’s easy to get distracted by that “shiny object syndrome” that comes with every new technology.
This is why we encourage CPOs to take a holistic approach to making “purpose-led procurement.” It’s an approach that involves procurement, but it also involves other functions and partners. Remember, driving changes take cooperation and coordination, starting with these fundamentals.
Check back for our next post on the CPO’s role in driving resource efficient business models and ecosystems through circular economy practices