Mark Carney's Davos Warning for Procurement
When Mark Carney spoke at Davos about a potential strategic rupture in the global order, he was not offering a forecast so much as a warning. The point was not to predict the next shock, but to recognise that several of the assumptions that once underpinned stability is weakening at the same time.
His remarks were framed in geopolitical terms, but their implications extend directly into procurement. The operating environment many organisations still plan against no longer exists in a reliable form.
Economic integration, once treated as a source of resilience, now carries exposure to political pressure, regulatory divergence and sudden dislocation. For procurement teams, this shifts supplier risk from something episodic into something structural.
That distinction matters. Structural risk cannot be managed once a year and filed away.
Why traditional risk approaches are starting to fall short
Most procurement functions already manage supplier risk. Financial health is assessed, compliance is checked, performance is monitored and risk registers are maintained. None of this is wrong. It is simply incomplete.
In a more fragmented environment, risk rarely arrives through a single cause. It emerges where regulation, energy markets, labour availability, climate pressure and geopolitics overlap. Often without a clear trigger event.
Tools designed for a more stable era tend to describe exposure after it has already materialised. They are good at documenting risk, but less effective at shaping behaviour or accelerating response when assumptions break down.
Carney’s underlying message was about adaptability. Resilience is no longer created through optimisation alone. It depends on how quickly organisations can adjust when conditions shift, and how effectively they can do that with the suppliers they rely on.
The enterprise no longer stops at the organisation chart
One of the more uncomfortable realities for procurement leaders is that the effective boundary of the enterprise has moved. Operational continuity, customer outcomes and even brand reputation are shaped by networks of suppliers and partners whose incentives and constraints sit outside the organisation’s control.
Where supplier relationships are well understood and actively managed, disruption is often contained. Weak or poorly understood relationships tend to transmit shocks faster, and further, than expected.
This also forces a rethink of how value is defined. Cost and efficiency still matter. On their own, they no longer describe whether a supply base will hold up under pressure.
Procurement is now managing two systems at once. The internal enterprise, where priorities are set and decisions are made. And the external enterprise, where much of the risk sits and much of the value is delivered. In practice, SRM is often where these two systems either connect coherently, or fail to connect at all.
SRM as judgement, not just process
In this environment, SRM stops being a set of tools and becomes a leadership capability.
The objective is not to have perfect data on every supplier. It is to know which supplier relationships genuinely matter, and where dependency or fragility is more concentrated than teams often realise. That requires judgement as much as analysis.
Collaboration plays a practical role here. Organisations that work with key suppliers on capacity constraints, trade-offs and scenarios tend to respond faster under pressure than those that rely solely on contractual leverage. This is not about sentiment. It is about reducing decision latency when time matters.
Trust also has a hard edge. When markets tighten, suppliers decide where to allocate scarce capacity, information and effort. Those decisions are shaped long before a crisis by day-to-day behaviour, commercial fairness and the quality of engagement.
Curiosity is often undervalued. Structured conversations with suppliers about emerging risks frequently surface warning signs well before they appear in internal dashboards. Transparency reduces friction at precisely the moment speed is required.
Even empathy has practical consequences. Suppliers under pressure remember which customers treated them as partners rather than cost centres. That memory often translates into discretionary effort when contracts alone are insufficient.
What this means for procurement leaders now
Carney was not arguing that disruption can be predicted. He was arguing that it should be assumed.
In that context, resilience does not come from trying to model every possible shock. It comes from building supplier relationships that can absorb disruption, adapt quickly and continue to function when conditions deteriorate.
The greater risk for many organisations is not volatility itself, but the assumption that stability will return quickly enough to justify old ways of working. Managing suppliers as if the previous operating environment still holds is becoming a strategic miscalculation.
Turning insight into resilience
This is where SRM moves from theory into execution. Done well, it helps organisations understand where risk and dependency actually sit, focus attention on the relationships that matter most, and embed collaboration and transparency into everyday decisions.
In a world of potential strategic rupture, scale alone offers diminishing protection. The ability to work effectively with suppliers under pressure, and without perfect information, is increasingly what separates organisations that cope from those that struggle.
If this reflects challenges you are seeing in your own supply base, the practical question is often where to focus first. Understanding which supplier relationships are genuinely critical, where risk and dependency concentrate, and where resilience already exists is not always obvious from traditional reporting.
State of Flux works with procurement leaders to diagnose these strengths and opportunities through structured, evidence-led assessments of supplier relationships. If you want to understand how resilient your SRM programme really is, you can send us an enquiry here: enquiries@stateofflux.co.uk
