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Capitalizing On Complexity

June 20, 2010

IBM Corporation recently published the results of its Global CEO study, featuring the results of more than 1,500 interviews. The biggest challenge – according to 79% of these executives – is the increasing global complexity that faces their business and their decision-making. In his introduction, Sam Palmisano (IBM’s CEO) talks of ‘the unprecedented level of interconnection and interdependency’ that is driving this complexity.

In other words, global networked technology has taken us into new dimensions of worldwide interaction, but of course it cannot actually structure or manage the relationships that are needed at a human level.

And that, of course, is why those who are charged with forming, documenting and managing such relationships find themselves under so much pressure. Our historic instrument (contracts based on jurisdictional laws and cultural practices) are woefully inadequate when it comes to dealing with these new dimensions.

The IBM report highlights three widely shared perspectives among executives:

  1. The rapid escalation of ‘complexity’ is the biggest challenge they face; they expect it to continue and accelerate in the coming years.
  2. Enterprises today are generally not equipped to cope effectively with this complexity in the global environment.
  3. They identify ‘creativity’ as the most important leadership competency for enterprises seeking a path through this complexity.

In other words, we face a world in which making and managing successful business relationships will be increasingly critical. The environment in which this is happening will be ever-more complex. This demands creative new approaches that will both enable and protect the enterprise. At the heart of IBM’s findings is the need to become better at taking risks, better at eliminating rules and bureaucracy, better at making and managing customer relationships.  88% believe they must ‘get closer to the the customer’, which for the leaders means ‘more insight and intelligence’.

Our executives are looking for those who offer creative leadership. They know that this will involve new strategies and better insight to markets and specific customers. This represents a tremendous opportunity to re-think relationship structures, financial models and contract terms. While innovation may sometimes be the result of individual inspiration, it will most likely come from dedicated research and analysis – a readiness to explore new ideas and discover innovative interpretations.

The IBM report emphasizes that executives see complexity as both an opportunity and a threat. Those in the world of contracts and relationship management must ensure we offer ideas that enable this balance, that we demonstrate our ability to be creative at both an operational and strategic level. It is time for us to ‘capitalize on complexity’ and, if we wish to be taken seriously as a profession, we must do this collectively by challenging the models of the past and presenting new ideas through which to better manage this ‘unprecedented level of interconnection and interdependency’.

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