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The challenge of integration

November 1, 2013

Why is it that contracts are often so fragmented, so difficult to understand? Why is it that assembling a contract is often so contentious? Why is it that no one really provides holistic training on contracts and their management?

The answer, of course, is because the contract document is influenced by many different stakeholders and its assembly relies on co-operation between these stakeholders. For many reasons, that co-operation is often lacking. Nowhere is this more apparent than in academia, where contracts feature in many classes, but are not addressed holistically in any of them. Programs in law, finance, marketing, supply chain, operations, project management and many others will each touch on contract-related topics, but none result in expertise. All of them (in my experience) teach a narrow perspective based on a functional or specialist view.

This has been a subject for recent debate between IACCM and a number of academics in both the United States and Europe. A number of factors are coming together to cause a re-think in the approach to contract and commercial management:

1) There is no question that this field is rising in importance on the executive agenda. Just the number of bid requests we are receiving at IACCM for training in fields like ‘commercial skills’ or ‘commercial competence’ is clear evidence of that. I am sure business schools are observing some of that pressure.

2) There has been an increase in academic research and a growing appreciation that contracts can be a dependency item for certain functions to optimize their value; this is awakening academics to the need for more research, but to be meaningful it must often be cross-departmental.

3) At a more cynical level, many universities and business schools are wrestling with how they maintain student numbers and revenue streams. This is causing them to be more adaptive and more open to addressing business needs. Hence they see contract and commercial management as an opportunity.

The form of the debate is therefore interesting. In many cases, individual institutions are developing contract or commercial management as a bolt-on for existing classes – for example, modules within a law or project management program. While this is a welcome trend, it is questionable to what extent it adds to the understanding or capabilities of the student. A few academics are pushing further and suggesting that universities must themselves adjust to the demands of this cross-functional discipline by developing an approach to inter-disciplinary collaboration. In other words, classes in the field of contract and commercial management would actually bring together the various academic disciplines that represent a holistic view of the stakeholder community.

A few businesses have succeeded in establishing this formula of shared and collaborative responsibility, but it remains the exception – perhaps in part because our academic institutions themselves encourage specialism and discourage cross-departmental sharing. It seems to me that we must start to train specialists that their knowledge is not useful when it is simply stored in their own mind; knowledge and expertise should be put to use by a focus on enabling others to make better and more informed decisions. A true expert does not hoard knowledge; they disseminate it in ways that those less expert can understand it and put it to practical use.

 

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