J&J’s former chief procurement officer on the evolution of the function

In this podcast, Heidrick & Struggles’ Carlos Garcia speaks to Len DeCandia, former global chief procurement officer at Johnson & Johnson and former chief procurement officer at Estée Lauder. DeCandia, who has held multiple procurement and supply chain leadership roles throughout his career shares his thoughts on the evolution of these functions and what leadership capabilities have been most helpful through the upheaval of the past few years as well as through growth and consolidation, acquisitions, and spinoffs. He also discusses what skills and experiences he’s sought when designing and building his procurement and supply chain teams and what tradeoffs he has had to make when hiring and developing future leaders. Finally, DeCandia shares some advice for those who are looking to grow into a C-level procurement or supply chain role.

Some key questions answered in this podcast include:

• (1:26) Having held multiple procurement and supply chain leadership roles throughout your career, how would you describe the evolution of these functions?
• (2:15} How have internal and external stakeholder relationships changed over the years? 
• (3:31) You have led through very different circumstances: growth and consolidation, acquisition, spinoffs, and, of course, a pandemic. Which leadership capabilities were most helpful as you navigated the constant changes? 
• (6:08) What skills and experiences have you sought when designing and building your procurement and supply chain teams?
• (08:41) What tradeoffs have you had to make when hiring and developing your procurement or supply chain leaders?
• (11:30) What advice would you give to those who are looking to grow into a C-level procurement or supply chain role in the future?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Carlos Garcia: Welcome to the Heidrick & Struggles Leadership Podcast. I’m Carlos Garcia, a partner in the firm’s Supply Chain and Operations Officers Practice. In today's podcast, I'm excited to be speaking with Len DeCandia, the former global chief procurement officer at Johnson & Johnson. Prior to J&J, Len was the chief procurement officer Estée Lauder and, before that, a senior vice president of supply chain management at AmerisourceBergen.

Len, thank you so much for joining us today, and congratulations on your retirement this month. How timely to reflect on your experience over 40 years in procurement and supply chain operations. 

Len DeCandia: Well, thank you, Carlos. I think it’s a great time for me to make this transition. I just finished up a great assignment at Johnson & Johnson and I’m starting a new chapter in my life and my career, hopefully, one that gives me a little bit more control over my time but still allows me to continue to evolve and grow and learn from the many challenges that I've experienced working in the supply chain function. 

Carlos Garcia: Speaking of that experience, having held multiple procurement and supply chain leadership roles throughout your career, how would you describe the evolution of these functions?

Len DeCandia: It's incredible, what we've seen over the past 25 or 30 years. And, obviously, it's more in the news now than ever before. I think the world is learning about the value and importance of the supply chain. Over the past 25 years, I spent the first 12 or 13 years as a chief supply officer, both for Roche Pharmaceuticals, and, as you mentioned, the AmerisourceBergen. For the past dozen or so years, I've been very much focused on the procurement function. I've seen that really expand and have an elevated value in organizations, specifically when they start to look at all of their relationships with their suppliers and the importance of better partnering and collaboration.

Carlos Garcia: Let me follow up on that. How have those internal and external stakeholder relationships changed over the years? 

Len DeCandia: Especially in the B2B space, there was a good transfer of goods and services, but not a well-integrated relationship. And I think that, as organizations have evolved and have become more global and have had to become more sophisticated, they’ve had to make tougher decisions around what competencies they were going to invest in internally and what critical competencies and relationships they needed to invest in and nurture externally. And so, I think the relationships have become more strategic. That’s not the case of all suppliers, but a small subset of suppliers have become strategically and obviously very important to the execution of companies, products, and services. 

And I think some of the recent experiences we've had through the pandemic era and some of the many changes happening today are creating really a great opportunity for organizations that haven't evolved in their relationship management to really begin to invest more in better understanding how to manage those relationships and how critical they are in achieving their customer goals and objectives.

Carlos Garcia: In your career, you have led through very different circumstances, Len: growth and consolidation, acquisitions, spinoffs. You mentioned the pandemic a moment ago. Which leadership capabilities were most helpful as you navigated the constant changes? 

Len DeCandia: What I've probably seen more than anything else is the introduction of technology—and technology has really evolved significantly over the past two or three decades. Today, we're in the middle of a digital transformation, and, for me, many of my assignments were transformational assignments that were associated with elevating the productivity and performance of the organization. [I had to ensure the organization was] able to grow, and I had to be able to support growth in profitability as well.

And I think there has been and continues to be a real focus on execution. So, to go back to my early days, my first chief supply officer responsibility was with Roche Pharmaceuticals, and it was in the late 1990s and early 2000s; in that era we were introducing enterprise resource planning systems. And in many cases, the success rate of those deployments was only about 30 to 35. But, you know what? The world hasn't changed. I just recently read a study by Ernst & Young that basically said that over the past two decades, less than 50% of transformation initiatives have been successful. And I think the technology is always ahead of us as human beings. And so, as leaders, it really is vital to understand those critical processes that need to change or need to evolve, but most importantly, understand how to manage people and your organization through that change. And I think that that leadership responsibility has really been elevated, escalate, and amplified. When you look at what's happening in the world today, it's becoming that much more complex. There are many more variables associated with climate, with geopolitical conflict. In essence, we live in a world of scarcity now, whereas possibly before the pandemic and before some of the changes we’ve been seeing, we lived in a world of abundance. The world of scarcity now really allows for less tolerance for failure.

So, execution and quality of execution has really become foremost for being a successful organization. And so those organizations that are going to thrive and grow are those that have leaders that really have the ability to make change, implement change, and ferry their organizations through that change. Now more than ever, we can’t be sloppy, because those organizations just don’t have the ability to do that and survive.

Carlos Garcia: How interesting. So, to dig a little deeper, Len, what skills and experiences have you sought when designing and building your procurement and supply chain teams? How similar or different are those skill sets from your own? 

Len DeCandia: I think one of the biggest challenges for organizations as they go through transformations is that there’s a great focus on where you want to be—there's a lot of clarity on vision and there's a lot of emphasis put on the end outcome. But, in many cases, many organizations really don't do a pure and honest assessment of their current state. And when I say that, I'm talking about the complexity of the organization. So, the various processes: which processes are really adding value, which ones aren't, and, most importantly, what competencies and skills and tools that the people within the organizations have.;

From a leadership standpoint, I think that [building teams] starts with the ability to truly understand the current state. And then I think the second aspect of being able to lead and manage through transformation and proper execution is really prioritizing and understanding what dimensions of change need to be in place before you can take the next step. And I've seen organizations do that well. Recently I introduced a complete digital platform for Johnson & Johnson, for their procurement system around the world, which not only meant that we were introducing change to the people within the procurement organization, but most importantly we were introducing change to the internal business partners and the external business partners. Therefore, our ability to understand the adoption of that change, the issues that were interfering with, and the ability to adopt a mindset of continuous improvement and listening to those changes, was crucial, as it was for ensuring that once the change was in place, we could move on to the next level. I think that's consistent with systems that I put in place, as it is in other companies as well. [We need] the ability to listen, have a continuous improvement mindset, and really understand what's happening at a “day in the life” level. 

And you have multiple stakeholders, so therefore understanding not only the day in the life of the people in your own organization but that of those other stakeholders that are involved in the change is very, very important. And so, there are a lot of situational leadership skills that goes with all of that. And you have to know when to intervene. How do you intervene? How do you help people understand why this change is happening? And, most importantly, they have to understand what their role in being successful in making it happen is. 

Carlos Garcia: Sounds very demanding of your teams. What tradeoffs have you had to make when hiring and developing your procurement or supply chain leaders?

Len DeCandia: I think that one of the most important aspects of any leader is to really put together a team that has a range of complementary skills and to build depth in that team. There's a tendency sometimes to look at your staff or your extended staff as individuals and not look at them as how they fit together in the puzzle of a team and the dynamic that you're trying to create relative to those competencies. So, for me, it's very good to have people on the team that [have] strong analytics skills and others on the team that might be good influencers and storytellers. And I think not only is it that you lean on those skills from those respective individuals, but I think they also bring to the unit insights and learnings so that others can move along their own maturity curve centered around those capabilities.

There's a natural tendency in areas such as supply chain or procurement to overemphasize the data, the analytics, and the science. But because of what I mentioned earlier about the ability to help shape and drive across the broader community, there’s also an important need to become better influencers; the only way you can really understand and help someone be successful is by having an understanding of their situation—a day in their life.

So there’s an empathy element to all of that. But most important is being able to tell stories, stories that allow others to see themselves through a scenario of success. And I think that’s probably one of the skills that needs to be invested in as supply chain management or procurement continues to be most important to the organization as it relates to growth. In today's world, growth really comes from being able to provide your product or your services when your competitors cannot. And I think that will continue as we evolve with this changing world. If your supply chain is working well, if your relationships with your suppliers are allowing your supply chains to work well, you'll grow. You'll win the day. You'll gain share.

One of the things that's amazing to me: I saw an interview with Jamie Diamond earlier this week, and he mentioned that consumer spending is up over 10%. And I don't know any company that wouldn't be happy with the fact that consumer spending is up over 10%. So, in reality, the issue that we're dealing with in the world today is not so much demand, it's supply, right? So, if organizations could meet that demand with their supply, they would be experiencing tremendous growth. And here's where the supply chain and procurement become extremely important, because that's really the vehicle for being able to deliver those products and services. 

Carlos Garcia: Thank you, Len. As we begin to wrap up here, what advice would you give to those who are looking to grow into a C-level procurement or supply chain role in the future?

Len DeCandia: I think what's critically important as you go through your career, especially when you start to reach some of the higher levels, is to become a very good businessperson, someone with extremely strong competencies and procurement and supply. And I think the role of the chief procurement officer is changing dramatically. I look at today's time as a time of great transformation and possibly a time of restructuring. I grew up in the post–Cold War era of open policies, a lot of collaboration and globalization. And now we are in an era of scarcity, and scarcity is showing up in many, many ways, right? It's showing up in things like oil and gas—and what's driving that? Well, maybe it's government policy as it relates to investment or company policies as it relates to investment, whether it's the move toward sustainability or the inability to backfill fossil fuels with next-generation technology. But it’s impacting many, many other areas—anywhere raw materials are. The other scarcity is employment. I'm a baby boomer, right? If you look at a chart and you look across the x-axis of the various decades from 1950 through 2040, and you look on the y-axis in terms of the size of the labor force—especially when you look at the United States—you'll see tremendous growth in the era of the 50s, 60s, 70s, 80s, 90s. But now, as boomers like myself are starting to retire, the employment population is leveling off in some parts of the world. Or, in places like Japan or Italy, there is negative growth; they're starting to lose their labor and their labor force.

In this era of scarcity, it really becomes tremendously important to make sure that as a leader and as a future leader, you understand your assets and your competencies. And I think that C-level leaders in procurement or supply chain really need to understand the broader objectives of the organization as well as where the organization is investing not only in its internal competencies, but in its external competencies.

One dimension of internal competencies that C-level leaders in procurement really need to embrace is the fact that the role of the CPO is becoming very much like the role of the chief human resources officer. Why do I say that? Because if we are going to focus on execution and if execution and the ability to drive change and transformation in an agile way to keep up in the changing world is happening, not only do we have to train all leaders to be good people leaders but we also need to train all leaders to be good business partners with external suppliers, because they're given two things to be able to accomplish their objectives they're given—direct reports or project teams, and budgets, and those budgets are usually spent with third parties. And, if we overemphasize just the people leader aspect of it, where we're starting to see failure and execution is the ability to partner externally in an effective way to drive good outcomes relative to the projects and programs.

And you'll see this over and over again as it relates to technology programs, as well as product programs. So, I think the CPO role is an enabler. The CPO role is really evolving into a role that becomes the tide that lifts all boats. It's not just a purview of the procurement to be good external business partners, it's also the responsibility of internal business partners to work well with their external business partners and create that environment that allows for mutual success, aligned goals, and, obviously, the ability to deliver on promises.

And so, because of all of these various challenges, the ability to do that is really going to differentiate those organizations that will be successful in the future. Whether you're making electric vehicles or pharmaceutical products or consumer packaged goods, it's really your ability to execute in an agile way in a very complex world that's going to allow your organization to grow and be successful. 
And our employees and suppliers have become that much more important to our ability to do that day in and day out. It's going to be a really interesting time for those leaders that have the ability to do that. 

Carlos Garcia: Very wise advice. Len, thank you so much for taking the time to speak with us today.

Len DeCandia: My pleasure. Thank you, Carlos.

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About the interviewer

Carlos Garcia (cgarcia@heidrick.com) is a partner in Heidrick & Struggles’ Los Angeles office and the global managing partner of the Supply Chain & Operations Officers Practice.