The Successor Starts with the Contract Folder
Why Knowledge Leaves the Company
74% of a CPO’s time is spent on transactional work rather than strategy. The reason: When the best category manager leaves, so does their knowledge—and the contract folder remains empty.
In December 2002, I had the opportunity to attend the BME Symposium for the first time with my employer at the time (Xcitec—software for strategic procurement). In every procurement department I’ve seen over the past 25 years, there have always been people for whom the question was never “Where is that?”—but rather, the answer was “Ask X.”
Because X knows which supplier actually “goes along” with the material index and which one is just pretending to. X knows that the secondary supplier’s cost calculation has been assuming the same setup time for three years, even though the plant was remodeled long ago. X knows at what point in a conversation with suppliers it’s worth keeping quiet or digging deeper. As a professional, X knows the input factors and cost drivers of his should-cost analyses, the market and supplier dynamics in his product group, optimal leverage points, negotiation dynamics, and walk-away points—and has internalized the product group strategy more than anyone else—but hasn’t documented it.
Then X resigns.
Whatever can be handed over is handed over: contracts, price lists, a folder (with a pile of Excel files), a handful of appointments. What isn’t handed over is the mental model—the cost logic of the product category, the history of each negotiation, the intuition for where there’s still room for improvement. The successor starts with the contract folder and, over the course of two years, works his way up to a level of knowledge the company once had.
74% of a CPO’s time goes toward transactional and operational work—not toward decision-making and awarding contracts. Even in the highest-performing organizations, that figure is still 63%. (Source: Deloitte, Global Chief Procurement Officer Survey 2025)
This distribution is also the reason why knowledge remains tied to specific individuals at “X”—not a lack of discipline. Anyone who spends three-quarters of their time compiling data and recreating calculations ends up documenting only the result. The reasoning behind it remains in their head. A slide is not a model, and a contract binder is not understanding.
I’ve essentially seen three responses to this challenge:
- Documentation requirements. I think they “last” about a quarter.
- A system. I think most systems store results, not the reasoning behind them.
- A consulting project. I think such projects build excellent analytical skills and methodological knowledge, which unfortunately disappear along with the project team over time.
What I haven’t seen: an organization where the analytical work, process know-how, and methodological knowledge remain in-house—traceable, repeatable, regardless of who did it the first time. Let alone one where the learning curve of this knowledge is applied continuously and comprehensively, becoming a flywheel for the company’s competitive advantage.
Changing that is what we’re working on at Elevatry—but that’s the topic for September 28, not the subject of this note.
This week’s question for my network of procurement experts is: How much of your procurement performance depends on the skills of the three people who could (theoretically) quit next month?
I’m interested in the order of magnitude, not the exact number—I welcome every comment! If you don’t want to miss the Elevatry video and upcoming Friday notes, you can sign up for free here.
— Heiko, founder of Elevatry. 25 years of strategic procurement. My next note will be published on September 18: The 1,027 suppliers nobody calls.
