Aug13
The "We and Them" Era Is Over
There is a particular kind of meeting that most procurement, business leaders and contract management professionals have sat through at least once. The supplier is on one side of the table. The buyer is on the other. Someone pulls out a risk matrix. Someone else points at a clause transferring intellectual property. A third person raises the subject of margin.
And in that room, without anyone naming it explicitly, the underlying assumption is clear: this is a zero-sum game. What you gain, I lose. What I protect, you cannot have.
This model of thinking served a purpose. In a world of linear supply chains, where value moved in one direction and relationships were transactional by design, it was a rational response to a rational environment. But that world is dissolving. The complexity of modern commercial relationships, the interdependencies of global supply networks, the speed at which conditions change: all of it demands a different posture. And the thinking that came with the old world must dissolve alongside it.
We are living and working inside ecosystems now. Networks of organisations, people, technologies, and dependencies that are deeply entangled and constantly shifting. In that context, the adversarial posture of classical procurement and contract management is not just philosophically outdated. It is strategically dangerous.
Let me pose a question that rarely gets asked in commercial negotiations: why does it matter what margin your supplier makes, as long as your own business case is met?
This sounds simple. It is not. Decades of procurement culture have trained buyers to see a supplier's profit as something that belongs, in some abstract sense, partly to them and actually is evil and should not be allowed. Squeezing margin became a performance indicator. Getting the lowest price became a proxy for value. Demanding transparency on cost structures became standard practice, as if another organisation's financial sustainability were your business.
It is not. Or rather, it should not be. And in the future it will never be again.
When you make your own business case, when the value you receive meets or exceeds the value you expected, you have succeeded. What happens on the other side of that transaction is, in a healthy commercial relationship, the supplier's business. Their margin funds their innovation. Their margin pays their people. Their margin gives them the resilience to serve you well next year, not just this quarter.
The obsession with supplier margin is one of the many symptoms of a procurement culture that still believes in winners and losers. But ecosystems do not produce sustainable winners through zero-sum games. They produce sustainable outcomes through mutual viability.
General terms and conditions are supposed to create clarity. They are supposed to provide a framework within which two parties can operate with confidence. That is their legitimate purpose. What they have become, in many cases, is a mechanism for transferring risk and extracting concessions. And some of the clauses that have become normalised deserve serious scrutiny.
Take the demand that a supplier transfer intellectual property to the buyer as a standard contractual condition. This might make commercial sense in specific circumstances, such as bespoke software development or proprietary product design. But applying it as a blanket requirement to, for example, a training organisation is something else entirely. A training provider's methodology, its curriculum, its approach to learning: these are not incidental outputs of the contract. They are the entire basis of the value being delivered. Demanding their transfer is not protecting your investment. It is attempting to take ownership of someone else's business.
This kind of clause persists not because it is commercially sound, but because it has become a default. Nobody questions the standard terms. The legal team drafted them years ago. The procurement team applies them. The supplier either accepts or loses the deal. And sometimes you just dont get what you want.
That is not contract management. That is a power dynamic dressed up in legal language. And it corrodes trust, reduces the quality of the relationship, and ultimately undermines the value both parties came to the table to create. If you want your contracts to function as infrastructure for collaboration, they need to reflect the reality of a partnership, not the fantasy of total control.
Every year, organisations produce stakeholder maps. Customers, shareholders, employees, regulators, partners. The usual cast of characters. And every year, the discussion about stakeholder value circles the same gravitational centres: financial return, customer satisfaction, employee engagement.
What remains almost entirely absent from most of these conversations is the recognition that the largest stakeholders of all are not in the room. They never are. They are society. They are the planet. They are the generations that will inherit the consequences of decisions being made today in procurement departments, in contract negotiations, in supply chain strategies.
This is not a call for naive idealism. It is a call for realism. The combined procurement spend of global corporations is measured in the tens of trillions of dollars annually. The contracts that govern that spend shape labour conditions, environmental practices, innovation investment, and community impact across every region of the world. The decisions made inside those contracts are not neutral. They accumulate into outcomes that touch everyone.
And yet the frameworks most procurement and contract management professionals use every day were designed to optimise for a much narrower set of interests. The model that has dominated since the first Industrial Revolution is the model of more. More efficiency. More output. More return. More growth. The god of more has been worshipped consistently and enthusiastically, and it has delivered extraordinary things.
It has also delivered a planet under stress, inequality embedded in supply chains, and organisations so focused on short-term extraction that they are eroding the very foundations on which their long-term existence depends.
It is time to consider a different orientation. Not the abandonment of profit, not the rejection of growth, but a shift in the underlying question from "how do we get more?" to "how do we find the right balance?"
And when I say balance, I mean something specific. Our resources are finite. Our time is finite. The attention of our organisations, the capacity of our ecosystems, the patience of the communities we operate within: all of it is bounded. Pretending otherwise has been productive in the short term and corrosive in the long term.
Profit matters. Revenue matters. Growth matters. But profit is not only a line on a financial statement. It is also the experience of doing business with you. Supplier experience: how your counterparts feel about working within the terms you set, the culture you project, the behaviours you reward and penalise. Customer experience: the quality of interaction, not just the quality of the product. Employee experience: the degree to which people inside your organisation feel that what they do connects to something meaningful.
These forms of experience are not soft metrics. They are drivers of performance, retention, innovation, and reputation. Organisations that treat them as secondary to financial output are making a huge error. They are measuring the shadow and ignoring the object that casts it.
When you take experience seriously, and when you take the wider ecosystem seriously, the horizon of your strategic thinking necessarily extends. You stop asking only what you can extract this year and start asking what kind of position you want to occupy in five years, in ten years, in the markets and communities you depend on. You start asking what kind of partner you are, not just what kind of buyer or seller you are.
This requires attention to relationships in a way that classical procurement culture has systematically undervalued. Relationships require investment. They require reciprocity. They require a willingness to hold multiple time horizons simultaneously: the short-term realisation of objectives alongside the long-term continuity of the partnerships that make those objectives achievable.
It also requires holding a balance between reputation and revenue. Between the drive to innovate and disrupt, and the responsibility to manage ongoing operations with stability and integrity. These tensions are real and they are permanent. They cannot be resolved by pretending only one side exists. They can only be navigated by organisations mature enough to hold both.
Here is where procurement and contract management become genuinely strategic rather than merely operational.
In the age of artificial intelligence and ecosystems, success depends on infrastructure. Not physical infrastructure, though that matters too. The infrastructure of agreements: the contracts that define how you collaborate, what you commit to, what you expect, and how you will resolve the inevitable moments of friction and ambiguity.
If those contracts are adversarial by default, if they are built on the assumption that the other party cannot be trusted, if they transfer risk rather than distribute it intelligently, they will fail as infrastructure. They will create friction at exactly the moments when you need fluidity. They will produce disputes when you need decisions. They will slow adaptation when speed is essential.
Managing contracts well in this context means more than compliance and administration. At the tactical level, it means having a clear vision of how you intend to collaborate: what governance looks like, how performance is measured, how relationships are maintained when things go wrong. At the strategic level, it means knowing where you are going and what role you want to play in the ecosystem around you. Which partnerships are central to your identity and your future? Where do you want to lead, and where are you content to follow?
Answering these questions requires breaking some classical organisational structures. The separation between procurement, legal, operations, and strategy that characterises most large organisations is a structural impediment to the kind of integrated thinking that ecosystem management demands. Organisations will need to delayer, to create genuinely cross-functional capability, and to develop leaders who can think across the boundaries that internal hierarchies have historically enforced.
The shift from the god of more to the god of balance is not a future event. It is underway. Organisations that recognise it and position themselves deliberately within the transition will become its creators. Organisations that observe it cautiously and wait for consensus will become its followers. And organisations that assume the old model will reassert itself are already falling behind without knowing it yet.
Complacency is, right now, the most significant competitive risk in procurement and contract management. Not technology. Not regulation. Not market disruption. Complacency: the assumption that what worked in the last cycle will work in the next one.
The change required is not incremental. It asks you to reconsider the purpose of the contracts you manage, the relationships you build, and the stakeholder map you draw. It asks you to see profit more broadly, to see your obligations more honestly, and to see your position in the ecosystem not as a buyer or a seller, but as a participant in something larger than your annual targets.
You are not alone in this transition. The ecosystem you operate in is shifting alongside you. The question is not whether you will be part of the new model. You already are. The question is what role you choose to play in shaping it.
Follower. Creator. Or the one to whom it simply happens.
The choice is still yours. For now.
Keywords: Economics, Ecosystems, Procurement
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