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Commercial & Contract Management: Resolution for a New Decade

January 6, 2020

Aspirational visions such as eliminating hunger, poverty or child mortality are often dismissed as unrealistic. Yet while they are certainly challenging, progress towards these goals has been remarkable. Over the last four decades, the proportion of the world’s population living in extreme poverty has dropped from 42% to 10%. Since 1950, the percentage dying during childhood has dropped from 27% to 4%. Major challenges remain – but history suggests we will succeed in addressing them.

There are those who see IACCM’s vision – ‘a world where all trading relationships deliver social and economic benefit’ – as over-aspirational and unrealistic. Yet if such progress can be made in reducing the intractable problems of hunger, poverty and child mortality, surely we can succeed in overcoming some of the problems associated with improving the results from commercial relationships. Much of the answer depends upon belief, shared determination and concerted action.

Grasping opportunity

Winston Churchill once observed: ”An optimist sees the opportunity in every difficulty, a pessimist sees the difficulty in every opportunity.”  In 2019, IACCM research highlighted the critical importance of optimism and the fact that, while not exactly pessimists, the behavior of a majority of those responsible for contract and commercial management is ‘preventist’. In other words, the CCM community often operates with rules or practices that stand in the way of its own success.

This behavior is not deliberate. We all live and work in an uncertain and difficult world. Many find this threatening and a cause for concern, at both a personal and business level. It is understandable when this leads us towards measures that we believe will reduce uncertainty – for example, through rigorous risk management, through a focus on compliance, through longer and more exhaustive contracts. However, far from controlling uncertainty, measures such as these impose levels of rigidity and inflexibility that may increase risk and constrain adaptability or innovation.

The 2020s can be different.  CCM is the critical discipline that balances risk and opportunity – and this requires innovation, a readiness to challenge and change the rules. It is here that the future lies for our community. This decade provides an opportunity to start operating as a true discipline, with a shared sense of mission. To do this, we need not only self-belief, but also to operate with more scientific, research-based methods and a commitment to work as a community in reducing the number of contracts that fail or under-deliver. We already know many of the answers – simplifying and standardizing contracts, adopting advanced technologies, training ourselves to common standards, making use of the extensive research that is available.

IACCM’s commitment is to provide the forum that will lie at the heart of change. Working together, its diverse membership can truly make a difference and, by 2030, be able to reflect on a decade of remarkable success. Let us begin the decade with a resolution to seek the opportunity in every difficulty.

 

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