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Getting In Step With The CEO: Creative Contracting

February 17, 2011

“There is discomfort when people encounter creativity.”

That is an observation by Wharton management professor Jennifer Mueller in a paper ‘Recognizing Creative Leadership’.

In her report, Mueller comments on  the 2010 IBM CEO study (previously referenced in this blog) which found that ‘creativity’ is the attribute most valued for leading a large corporation in the future. Yet her research reveals that creative people are not in fact viewed as leadership material. On the contrary, they tend to be seen as ‘quirky’ or ‘unfocused. As a result, leaders tend to be selected from those who are seen as achievers and implementers, rather than people who have innovative or visionary ideas. Mueller writes: “The value that leaders have for groups is in creating common goals so the group can achieve something. And goals are better the clearer they are — you don’t want uncertainty. So leaders need to diminish uncertainty and create standards of behavior for everyone in the group. And they create those standards by conforming to them.”

This resonates with the challenge we face in the world of contracting. Everyone says they want more creativity and greater innovation from their trading relationships – and yet they tend to stifle it through the way that risks are allocated and that performance is measured and rewarded. We are uncomfortable with uncertainty; we value precision; we welcome standards; we monitor conformity and we measure compliance.

I suspect that the overall mix of CEOs is unlikely to change. There will be a few truly creative spirits, but they will be surrounded by strong implementers. In general, CEOs will continue to be appointed from the ranks of proven achievers – and that is probably fine, so long as they recognize and facilitate the creative innovators within the organization.

In the IBM study, many CEOs expressed a lack of confidence in their ability to take charge in times of complexity. Those leaders were ostensibly promoted “based on this prototypical perception of leadership and now find themselves in a world that has vastly changed, one that requires much more creative responses and thinking.” In IACCM studies, we observe similar insecurities among those charged with forming and managing trading relationships. Many in the world of contracts, legal and procurement sense that things need to be different, but are not sure in what way. Of course, a key role of IACCM is to provide those innovative concepts; but for them to work and be effective, each professional must increasingly be open and receptive to creative ideas. To maintain relevance andvalue, professionals must become comfortable when they encounter creativity – and must be ready to change methods, terms and practises in ways that enable the management of uncertainty through innovation.

We do not all need to be visionaries, but we must be ready to welcome. promote and adopt creative ideas. Otherwise, we are working directly against the CEO’s number one priority.

One Comment
  1. The part that caught my interest is the charismatic part. Throwing in one word, charismatic, in the description altered the way that people saw the ideas and the people. It would be interesting if she had other words that triggered altered thinking that may be applicable and useful to contract managers. Are there some trigger words that will help people convey their creative message better? Are there methods of delivery that will break down barriers easier? Are risks perceived differently if couched in slightly different language?

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