Why Are We Afraid Of Measurements?
Today I received this note from a frustrated manager, trying to drive an improvement project in a large corporation.
“Measurement has always been a challenge for contract management to create a management dashboard. In all my previous companies this measurement was not a high priority area as the business case for other areas were stronger. But, I am glad that my current company has made it a high priority area, although they are not very optimistic of the results.
I have taken an approach of using the Quality methodologies to study the presales, sales & marketing, legal, project delivery, project maintenance process and procedures. The study shall give certain meaningful database. Another database shall be created by Risk analysis of the Contracts at Clauses/ Sub-clauses level. These database when read with the Company policies and International standards may give a dashboard that can detect, prevent and predict according to the management’s goals and objectives or Judgments and assumptions.”
“According to me,” he continued, “the biggest hurdle in creation of dependable dashboard has been the Legal team seeing the Contract management process in isolation. They have not succeeded in integrating other process equations which either feed contract management or Contract management feed them. “
This resistance to metrics is at the very least unfortunate – and is a key factor in preventing management seeing real value from the process. Without such data, it is of course viewed as a transactional activity, as good or bad as the last story they heard. And unfortunately, many of those stories are negative. In my response, I commented as follows:I endorse your comments. In part we face the challenge of strong internal parties resisting discipline or change because they feel secure in their traditional ‘professionalism’ and able to protect themselves based on extrernal ‘fear’ issues, like regulation and compliance. That in itself suggests an inadequate understanding of risk management – it seems like a very risky strategy for self-preservation!
I have a range of metrics that I recommend to get things started. At this point, many of these are directed at information gathering so that broader change initiatives can be identified and evaluated. For example, what do we spend most time negotiating? What are the most frequent internal roadblocks on review and approval? What are some of the key deal outcomes and what factors in the bidding and contracting process influence those outcomes (good and bad)? Measures of this type can range from things like levels of discount through to failure to meet commitments or percentage of errors. Many times these ‘outcomes’ track straight back to business policies or offering strategies owned by legal, finance or product management. The complexity (lack of quality) comes out in the contracting process – and by capturing this, we can use the process as a driver for core improvements (‘waste elimination’) around the business more generally.
Measurements – far from being threatening – are in fact a source of fascinating new ideas and approaches through which we can enrich our jobs and raise our strategic value. I wish more of our community shared my excitement!
Commitment Matters 