The Strategic Blind Spot in the Boardroom

Why Spend Deserves Executive Attention

At FTI Consulting, we often hear executives describe their strategies in terms of growth, digital transformation, or talent. Far less frequently do we hear them talk about spend — even though spend is where most of a company’s capital, and much of its strategic intent, ultimately manifests in practice.

Across the industries we serve, we see that 40 to 70 percent of enterprise costs typically flow to external suppliers. Every contract, sourcing decision and supplier relationship therefore represents a deliberate choice about where and how the organization creates value. Yet in many boardrooms, spend is still treated as a financial detail rather than a leadership priority. In our experience, that is a costly oversight.

Spend As Strategy in Action

Spend is not a support function, it is strategy in execution.

When a business commits significant capital to technology, logistics, marketing or outsourced services, it is not simply purchasing inputs — it is expressing priorities. Spend reveals what a company truly values, not just what it communicates in presentations or town halls.

Too often, however, spend decisions are delegated deep into the organization under the assumption that procurement and finance can “handle the details.” The result is fragmentation: disconnected purchasing, inconsistent supplier relationships and misaligned investments that quietly erode value over time.

From our perspective, strategy is only as strong as the way resources are allocated. If spending patterns do not reinforce stated objectives, then strategy remains an aspiration rather than an operating system.

The Blind Spot in the Boardroom

Why does spend so often escape sustained executive attention?

In our experience, it is because spend sits at the intersection of finance, operations and governance. Everyone touches it, but few truly own it. CFOs focus on cost control. CPOs focus on sourcing efficiency. Business leaders focus on delivery. The result is a structural blind spot in which significant value leakage goes unnoticed.

We have worked with global organizations where supplier spend represented nearly 60 percent of operating costs, yet few members of the executive committee could clearly articulate how that supplier ecosystem supported strategic priorities. Contracts were negotiated function by function, with limited enterprise-wide visibility.

When we analyze spend in these environments, the findings are often stark. Tens of millions of dollars are routinely directed toward activities that no longer advance the company’s agenda. The issue is not always waste in the traditional sense, but misalignment — the organization continues paying for capabilities that no longer fit its direction.

The Opportunity Hiding in Plain Sight

Many leaders assume that growth and efficiency are competing objectives. Strong spend governance demonstrates that they are not.

When executives intentionally align external spend with strategy, they can unlock trapped value and redirect capital from low-impact activities toward initiatives that drive measurable outcomes. This is not merely about reducing cost; it is about reshaping how capital is deployed to support ambition.

When leadership treats spend as a strategic lever, we consistently see three outcomes:

Clear visibility into where value is being created — or quietly destroyed
Shared expectations that every dollar must support strategic intent
Stronger accountability for how external partners contribute to results

Even modest shifts in framing can produce outsized results. We have seen organizations move supplier conversations from “How do we save five percent?” to “How can our suppliers help us achieve our growth objectives?” That shift alone often transforms relationships from transactional to strategic and delivers outcomes that negotiation tactics rarely achieve on their own.

Why Executives Must Lead

Effective spend management cannot be delegated.

Spend decisions reflect strategic trade-offs. They determine how flexible, resilient and innovative an organization can be. Only executive leadership can define what “good spend” means — balancing control with empowerment, efficiency with impact.

Governance is what converts those principles into repeatable practice. It ensures that every budget owner, sourcing leader and supplier operates within a shared definition of value. Without that alignment, even well-designed processes struggle to deliver consistency or trust.

Executives do not need to manage suppliers directly. But they must elevate spend to a leadership-level conversation — one that belongs alongside discussions of growth, risk and capital allocation.

A Different Kind of Executive Discipline

When leaders begin to view spend as a strategic capability, the nature of the conversation changes.

They ask more precise questions:

Are we buying capabilities or simply purchasing services?
Do our suppliers strengthen competitive advantage or merely reduce workload?
Are we investing in the relationships that create differentiation?

These questions drive a different executive discipline — one rooted in value governance rather than transactional control. It is not about auditing spend; it is about designing an ecosystem of partners that supports long-term direction.

In the strongest organizations we work with, procurement is not treated as a cost center. It is treated as a strategic mirror — one that reflects whether strategy is being lived out in day-to-day decisions.

The Executive Takeaway

Spend deserves a seat at the executive table because it directly shapes an organization’s ability to deliver on its commitments.

Every external dollar either reinforces strategy or quietly undermines it. When spend is treated as a secondary concern, organizations lose coherence — strategy drifts, accountability diffuses and capital migrates toward inertia rather than impact. Over time, this erosion is not visible in any single decision, but it compounds across hundreds of contracts, suppliers and commitments.

At FTI Consulting, we encourage leadership teams to treat spend as a strategic capability — one that demands intent, governance and ownership at the highest levels.

The most important question is no longer “How much are we spending?” but “What future are we funding?”

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Published

February 18, 2026

Key Contacts

Stefan Zorn

Senior Managing Director