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Innovation in Contracting

September 20, 2011

The wrong contracts and contracting strategies can undermine innovation.

 As businesses look more and more to their trading partners as a source of innovation, it is important that we understand how best to encourage the collaboration needed for innovation to flourish. Trust is fundamental, as are the right relationships and forums for discussion and review. You cannot contract for innovation; but you can certainly create a healthy environment through terms and conditions. Or alternatively, you can generate negative behaviors that will defeat efforts to innovate.

At the IACCM Global Forum for Contract and Commercial Excellence, delegates will gain insights to the forms of contract and commercial policies that establish innovative relationships. And of course, in today’s service and solutions based world, the contract terms themselves can be a source of innovation and differentiation as well. For now, here are ten tips to get you started:

Develop and pursue relationships on collaborative principles and fair allocations of risk
Build open, bilateral communication strategies and escalation procedures
Create trust and shared responsibility as a foundation for contracting and relationships
Foster a “no idea is useless” mentality and ensure the right forums for review of ideas
Understand who will own the innovation and how the parties can use it in other relationships
Understand the other party – the people, the enterprise – and ensure a cultural fit
Build recognition and reward as an integral element of the program
Do not discount and prevent ideas that were not viable in prior contracting situations
Mitigate fear without encouraging carelessness
Recruit and anoint “innovation champions” in both contracting party organizations

 

 

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