From Overlooked to Essential: The Impact of Strategic Vendor Selection on Startups

What if I told you that there was a strategic workstream within your company that accounted for a large portion of total expenses and touched every part of your day-to-day work? And that it had a sizable impact on product experience, marketing effectiveness, sales efficiency, financial accuracy, project management, team collaboration, and more? Would you be surprised to learn that it likely has no clear owner, and that it probably won’t until your team is hundreds of people strong?

Well, that strategic workstream (almost certainly) exists at your company, and it’s called vendor selection and procurement. While not the flashiest aspect of running a company, this overlooked facet of business operations could very well be the linchpin of your company's efficiency and innovation. 

What’s more, at early stage companies - and often even later - Chiefs of Staff (CoS) and Business Operations (BizOps) professionals are often the ones silently in charge of this strategic workstream. While it may seem mundane, a thoughtfully-executed procurement strategy can accelerate a company’s growth and meaningfully impact the bottom line. Unfortunately, CoS and BizOps folks rarely get the recognition they deserve or the support they need to optimize these crucial initiatives.

You might wonder: isn't vendor selection just a fancy term for shopping around? 

Short answer: no. The best CoS and BizOps folks are not just ticking boxes on a checklist. Requirements gathering, financial analysis, negotiation, relationship-building, and stakeholder management are all part of an effective vendor selection process. 

Imagine this scenario: an early-stage startup is scaling rapidly, and the time comes to upgrade their customer relationship management (CRM) system. A straightforward task, right? But here's where the CoS steps in, transforming what seems like a simple decision into a strategic maneuver. They don't just look at price tags or glossy features; they dive deep into the company's long-term vision, align potential vendors with that trajectory, and consider how each option might scale, adapt, or integrate with their other systems. They ponder questions like, "How will this decision impact our team's productivity?" or "Can this vendor grow with us, or will we outpace them?" 

The Chief of Staff or BizOps professional can use their vantage point running the strategic planning and OKR processes to find gaps and ensure that vendor selection can plug them. As Ben Balter, current Director of Engineering Ops & Culture and fmr. Chief of Staff, Security at Github, puts it, the Chief of Staff will partner “with human resources, talent acquisition, procurement, and legal among other teams to ensure the organization’s smooth operation, including ‘owning’ contracts, vendor agreements, and purchase renewals that don’t naturally fit into other functions.” In fact, Chiefs of Staff are often the best positioned to take charge of selecting and implementing new technologies, like AI tools. Selecting the right vendor is like installing a component of the company's long-term infrastructure, bridging the gap between strategy and impact. 

In early- and mid-stage companies, adaptability and speed makes the difference between failure and massive success. CoS and BizOps professionals are brought into companies at these stages to be the ‘smokejumpers’ - ensuring that the company’s operations are both sturdy and flexible, able to withstand pivots and acceleration.

Yet, despite its critical nature, vendor selection and procurement is often underappreciated. It's high time we shift the narrative, recognizing and valuing the impact of Chiefs of Staff and BizOps professionals in steering companies towards greater innovation and efficiency.

Over the next few weeks, we’ll dive deep into each aspect of an effective vendor selection and procurement function, providing actionable frameworks and telling the stories of Chiefs of Staff and Biz Ops professionals who have had an outsized impact on their companies through this work. In doing so, we hope to shift the narrative on procurement while continuing to elevate the importance of the Chiefs of Staff and Biz Ops professionals who are doing the hard work of company building week after week.