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There are many reasons why today's business environment demands an integration of relationship management and contracting. I have described these in previous blogs - the speed of change, the levels of uncertainty, the increase in virtual communication, the physical distances and cultural gaps between many trading partners are just a few of the factors that make it essential to apply increased discipline to defining relationship practice and process.
As I look at the approaches being advocated to increase relationship focus, many continue to advocate a separation between ‘the contract’ and ‘the relationship’. They are perhaps reacting to the perceived dominance of legal perspectives in the the formation of the contract and therefore attempting to develop a parallel process for the formation and management of the relationship. This is a big mistake. First, the contract sets the framework within which the relationship will operate and significantly influences attitudes and behaviors. So it is wrong to accept a contract structure or terms that are not fit for purpose.
Second, ‘the relationship’ and related business terms also require the discipline typically associated with the core contract terms. Indeed, if we review the areas where things go wrong, they rarely relate to the legal terms. They arise because of the failure of ‘the relationship’ to adequately define and maintain joint understanding of goals, scope, shifting requirements, key performance indicators and so on.
It is this integration that we have been working on at IACCM – and with great success. There have been several opportunities recently to work with member companies on implementing complex contracts – situations where we have facilitated discussion between customer and supplier personnel to bring real and sustainable substance to their relationship.
At one recent meeting, a General Manager from a supplier company caught me at the break: “This is exactly what we need to give meaning to collaboration,” he said. “Can we include these workshops into our customer offerings? I would like to add them to the bids we submit because this really can deliver win-win proposals”.
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