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Contracts & Commercial: Do We Have A Vision? Why Are We Here?

January 21, 2010

Recognition is more important than money for contracts and commercial practitioners – and power trails a poor third as a motivator.

That is the finding from a survey undertaken by IACCM. And it resonates with much of what we hear in job satisfaction surveys – our community is driven strongly by its need to feel valued. This result also explains why morale is often low, because unfortunately many contracts and commercial staff feel that their work and contribution is under-valued.

A key reason for this is that it is often hard to describe our contribution in specific terms. As a community, we have lacked a vision and we have limited data to demonstrate the value-add that we bring to the business. One thing about which I am sure is that we will only alter this situation through collective action that develops agreed standards of practice and enables the creation of consolidated data, around an agreed mission and goals.

And that is why IACCM was created -to help us all define who we are, why we are here and what vision we have as a professional community.  We now have more than 15,000 members. Our research is helping many to demonstrate how we improve the management of risk, deliver increased revenue and margin, and cut costs. But what makes us different? Here is the view of one senior staff member – and I think it is a great reflection of values not only for the Association, but for the contracts and commercial community as a whole. I would welcome your comments.

  1. We are non-profit, and as a group of practitioners ourselves, we do this because we want to raise the game of all professionals, both buy side and sell side, in adding more economic value for stakeholders on both sides, with all the economic and social benefits that follow (e.g. increased trade = increased wealth = increased tax contribution = better taxes and hospitals). I don’t believe any other competitor can claim this. They are generally in the game to make money or to defend the narrow interests of their established profession. Even the trades unions have mostly spotted that they need to work more in the national interest than narrow trade interests, if they want to keep jobs and pay!
  2.  In terms of values, now is a great time to emphasise that financial reward as a primary driver, to the detriment of other values, may not be sustainable long term. Greed was never good (Gekko was wrong!). Generating sustainable value creation is good. I think there’s a difference! It’s hard to imagine us arguing for the position taken by bankers, for example. There was an interview with a young banker in the paper at the weekend, who had moved from UK to Switzerland, because the tax regime generated a few thousand extra income for her per year (on a vast salary). She travels home to UK at weekends. She said that she is primarily motivated by money, aims to make her fortune then get out. 
  3. I regularly find myself debating short-term versus long-term with people I speak to. If you are a CEO in the job for 2 years, and you are paid huge bonuses based on a few financial KPI’s, you may choose to meet those KPIs to the detriment of the business in the longer term. As a profession, we advocate being the ones who are able to provide longer term perspective. Long-term value creation requires long-term sustainable relationships, and for leaders to care about trade in companies in ten and twenty years time, not just in two years. The questions arises; ‘how can we change this short-termist system?’, driven by boards, shareholders, CEO’s? I love the Gandhi quote ‘you must be the change you wish to see in the world’… leadership is saying ‘it starts with me, my attitudes and my communications with others’.
One Comment
  1. I have had the good fortune to work in a couple of organizations whose myopia eventually led to their downfall, I say ‘good fortune’ because once you’ve seen what it can do, you know it cannot be tolerated without protestation. The challenge for commercial and contracts people everywhere is walking the very fine line between doing the ‘right thing’ for the business and despite the business. However, until the business stakeholders pass down more far sighted “KPI’s” for their CEO’s and business managers to be measured against perhaps the only recourse for commercial people is to continue to walking that very fine line. Perhaps in part, this may cause some of the functions lack of recognition…not everyone likes hearing what we’ve got to say.

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