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Legal and (revitalized) Procurement show leadership

September 25, 2012

It has been encouraging and eye-opening to read the entries submitted for the IACCM Innovation Awards.

The contest closed last week with a total of 45 submissions. The judging panel (of which I am one) has been marking and assessing; those short-listed for an award will be informed in the next few days.

There are many nuggets to extract from the entries we received. They cover innovation in contracting or commercial management and there are four categories of award (strategic, operational, individual and service provider). It is gratifying to observe the growing frequency with which strategic improvement in this field is recognized as important to overall business performance. Across industries and geographies, functional leaders and top management are grasping the extent to which simpler, faster and more balanced approaches to contracting contribute to competitive performance.

At an operational level, the entries are more often related to a specific initiative, often a creative response to a particular problem or opportunity. These represent inspirational ideas and demonstrate the importance of commercial creativity. A hesitation I have with some of them is the extent to which there are plans for replication, or to ensure organizational learning.

Across the span of entries, one thing that I noticed is the frequency with which the initiative is being driven either by Legal or by ‘revitalized’ Procurement groups. There is a relatively low proportion of entries from stand-alone Contract or Commercial Management teams. Some possible explanations for this emerge from the entries:

  • Most Legal teams are under heavy workload pressures. They need to simplify and avoid low-value or repetitive work; they also need to take action so that they do not represent a barrier to getting business closed. Simplifying contracts, facilitating faster response times and re-thinking attitudes to risk come high on the list of drivers for improvement.
  • ‘Revitalized’ Procurement is a term I use to describe groups that have grasped the need to expand their role and contribution. They take far more responsibility for outcomes from supplier relationships and they understand the fundamental role and value of contracts and of appropriate commercial policy and practice.  Such groups tend to form strong alliances with Legal, rather than viewing each other with mutual suspicion and hostility, or seeing contracts as having little relevance.
  • Procurement and Legal tend to have the internal influence needed to gain executive attention and to push forward with significant change agendas. This appears less true of dedicated Contracts or Commercial Management functions, where the focus is more tactical and deal-based. In these cases, improvement appears highly dependent on a dedicated individual who takes on a personal leadership mission.

My hope – and IACCM’s objective in launching these global awards – is that we can inspire many more with a belief in change and the benefits that can flow to their business, their function and themselves as individuals. That is why you will be hearing much more about the program and about the various entries over coming weeks.

 

 

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