So you think you are good at contracting …
For thousands of years, humans believed that their fate lay in the hands of the gods. Health, justice, social position – all were determined by the will of whatever deity they happened to espouse.
Yet steadily, individuals started to question this fatalistic view of life. Initially, the fields of law and medicine were seen as closely linked to religion, as were other areas of expertise such as architecture or engineering. But over time these developed as distinct branches of study and practice, setting the framework for professionalism.
Professionals ask questions because they believe in continuous improvement. They build knowledge; they challenge accepted wisdom; they reject ignorance. So when it comes to expertise in contract and commercial management, how well are we doing? There are many questions we can pose, but I selected these six for a presentation at the recent IACCM Europe conference because they reflect recent conversations with senior managers and politicians.
- What percentage of our contracts under-perform – and why?
- What is the economic impact of different contract models or terms?
- What are the relative probabilities of the risks we seek to mitigate through our contracts?
- To what extent can high failure rates in major projects be reduced through improved contracting practices?
- What are the best models for performance-based contracts?
- How does contracting performance at your organization compare with competitors?
One response to these questions is to say that the answer lies in the hands of the gods. Another, more common, is to say that it is someone else’s responsibility (and therefore, by implication, suggest that contract and commercial management are simply short-term administrative tasks, generated by the errors or ignorance of others). A growing number – and I put myself among these – are determined to find answers, publish them and build the body of knowledge that elevates the discipline of contract and commercial management.
So how well do you score on the questions above; and what would you add to the list of things that we should know?