Why Does It Take So Long?
Why does it take so long from the inception of a deal to getting it signed? And why is it that final negotiations always seem to be rushed, leaving many open items still to be resolved by the implementation team?
This was the gist of questions raised by IACCM member Mark Hope in a recent note. He went on to say: “I wonder whether you have or could research data that identifies the ratio between thinking time and doing time, as I think this would be fascinating and actually get to the nub of delay. There is a part of me thinks we as a community are accepting too much criticism for the overall delay and that we should focus on speeding up the buying decision and selection process more than the execution process”.
Mark’s comments relate to relatively large and often quite complex acquisitions, often related to technology or outsourcing. I am sure they resonate with many. We see initiatives kicked off with a great flurry, only for interest to dwindle as new priorities intervene. Then suddenly, an executive somewhere wakes up, or starts demanding to know the status of ‘their’ project – and suddenly reaching closure becomes urgent and everyone is seeking scapegoats for why it didn’t happen already …
Does this sound familiar to you? And does it seem unfair that often the convenient scapegoat is Procurement, or Contracts / Commercial, or Legal? We know we are innocent victims – don’t we?
Well, perhaps sometimes we contribute to that delay. But even if we do not, isn’t it time that we recognize reality and do something about it? Because in answer to Mark’s question regarding research data, we do have some very interesting facts. For example, we know that complex contracts require the coordination of multiple stakeholder perspectives and the responsibility for orchestrating those (and then reconciling the results) is often rather vague and inconsistent. We also know that the quality of executive sponsorship is key to project speed and almost certainly a major factor in its success. And we know that the lead-times to which Mark refers are highly variable – some companies have typical closure times of 5 – 7 weeks on projects where others take 25+.
Mark is absolutely right to imply that much of the delay in individual transactions is outside the control of the contracts / commercial / procurement organization. However, I would contend that we are at fault, because we know this is happening, we know that fingers will point at us, yet we do little or nothing about it.
Most executives understand the value of time. They would like faster execution on projects. They realise that ‘panic’ action frequently results in corners being cut and a loss of quality in the results. So why are we not responding to those issues by proposing a more rigorous and measured business process, aimed at improving review and approval quality and cycle times? Why are we not collecting and collating the data to find out what causes these recurrent delays? Why are we not benchmarking our company’s performance with that of major competitors or like industries? And why are we not then reporting to executive management on the steps needed to improve cycle times and generate better negotiated agreements? Some of course are doing precisely this – and helping their company to competitive advantage (se for example the results of IACCM’s ‘Most Admired Companies’ surveys and interviews). But many are not; they are simply waiting for someone else to fix the problem.
Mark has asked an excellent question and makes a very pertinent observation. Because in the end, is the answer not to ask ourselves ’Do we want to be victims, or leaders?’ Is this not a key example of where we have an opportunity to add value to the business and be instigators of change? And just remember what happens to those who fail to lead; in general, at some point, the accusations that they are ‘the problem’ start to stick – and suddenly the group or function faces massive reorganization and loss of power.
So be proactive. Don’t wait for others to find their answers to the question ‘Why does it take so long?’ If you need data to support you in this initiative, then you know who can help you …. it is IACCM.