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Commercial Management: Waiting For Instructions

September 17, 2010

The British Broadcasting Corporation (BBC) has been delivering nightly newscasts for almost 100 years. I am told that one evening, back in 1930, the program simply announced ‘Tonight, there is no news’.

I was reminded of this story when I was talking with Katherine Kawamoto, head of research and advisory services at IACCM. Katherine and I have both been on the road this week, speaking at conferences in Boston and Dallas. When we caught up by phone, each of us asked the other ‘So what did you learn? Who is doing something new?’

For each of us, the answer was no one. Despite an array of worthy speakers, recounting interesting stories and initiatives, neither of us had felt inspired to take notes, to put pen to paper – because there was no ‘new news’.

That is an issue of real concern. It seems like the commercial, contracts and procurement community is in limbo. We know the world is in a state of great uncertainty, we can see the signs of fundamental change – and in far too many cases, we are waiting for someone to tell us what to do about it.

The changes going on around us demand new approaches to commercial management. They require new contract models, new procedures to establish and manage customer / supplier alignment. They demand new forms of performance measurement, internal and external. Overall, the market is screaming out for commercial innovation that will support the technical innovation created as a result of network technologies.

The opportunities for commercial leaders to make their mark have never been greater. By failing to rise to the challenge, the incumbent community – lawyers, contract managers, procurement professionals – risk being seen as part of the problem, rather than part of the solution.

What is your news bulletin? What highlights of your day can you report to senior management with confidence that it truly is ‘a highlight’ – an idea or an initiative that will really contribute to their agenda? How are you and your colleagues poised to make a difference – or are you also just waiting until someone tells you what to do?

  1. Matt Higgs permalink

    Is the effect of “no news” truly based on no new initiatives originating from the commercial/contracts arena, or simply a case that businesses are running scared of what those new and bold initiatives may mean and how will they be perceived in a world of continuing global economic uncertainity and risk aversion?

    From my current experience maintaining the status quo of high costs, low risks, using tried and tested commercial methods and mechanics seem to be flavour of the year not just the day. Boldness and new initiatives are merely rhetoric as opposed to being considered as strategic influences in winning new business. To change this position does require significant time and energy, which can easily disappear and be sapped if there is no hint of a change in direction.

    • Matt, thanks for your comment. I guess a number of things bother me about this inertia. Perhaps the greatest is that our community prides itself on its contribution to the management of risk – yet how can we make this claim when, as you say, we face a environment of uncertainty and yet are not making changes to cope with it? Additionally, the research shows that organizations are in fact initiating actions that represent very high levels of risk, yet appear to be sticking their heads in the sand and failing to evaluate them.

  2. Syed Khan permalink

    Hi Tim
    This is an interesting subject, with IT evolution we were able to automate, integrate and standardize our processes and perhaps do it faster, but still lived with most formats we had.
    While procurement, commercial and legal are so much intertwined in business, they all have different approach and priorities. In Procurement we talk about building trust and partnerships, but in contract they need all the 1000 nails in the coffin. It took 10 times more time to conclude on contract to what we had negotiated in matter of weeks.

    Many years ago I struggled to improve our LC Letter of Credit process both internally and with our Bankers and gave it up in vain, Instead I simply suggested my vendor to do a credit insurance and ship me directly cutting out all that red tape and we all lived happily ever after.

    It is easier to simply things but when you are buffeted with legislative compliance and other rules and regulations and the holy cows, what do you suggest is the easiest way to break these traditions.

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