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Without Inspiration, Your 'Innovation' Will Need Tuning Up!

Published: 15 Jul 2012 Average Rating: 5 / 5 Print
 
This article appeared in Contracting Excellence magazine on 15 Jul 2012 view edition
 

Ever heard the joke about the three economists on a hunting trip? They encounter a deer in the forest. The first economist fires and misses by a meter to the left. The second fires and also misses, by a meter to the right. The third doesn't fire, but shouts enthusiastically 'on average we got it!'
In the business of contracts, could we, unknowingly be like the three economists? If so, it's time to retune -- maybe transform -- our reasoning.
By Dave Barton, VP of Customer Contracts, Agilent Technologies

Ever heard the joke about the three economists on a hunting trip?  They encounter a deer in the forest. The first economist fires and misses by a meter to the left.  The second fires and also misses, by a meter to the right.  The third doesn't fire, but shouts enthusiastically “on average we got it!”

In the business of contracts, could we, unknowingly be like the three economists?  If so, it's time to retune -- maybe transform -- our reasoning.  

For example, statistically, the average of one meter to the left and one to the right may be considered dead center, but the actual deer is alive and well!  This is like saying inventory was 10% too low one quarter and 10% too high the next.  On average, it was forecasted accurately.  The average of the two quarters may support the functional scorecard, but long lead times during the under-stocked quarter, and the low return on invested capital during the over-stocked quarter tell a different story to customers and shareholders. 

In the contracts function, if we rely only on statistics to measure our success, like cycle time, we miss the real success stories behind the numbers that can drive innovation and change.

If you read my last IACCM article1, you'll know that I am a huge proponent of capturing and using quantitative data to support contracts negotiation and policy decisions.   However, when we want to influence the real “thought leaders” and drive innovation and change, we need to be equally adept in using, inspiring examples, stories, anecdotes, and metaphors that serve stakeholders interests beyond our own.  

To use a metaphor, if numeric data is the “lyrics”, then qualitative examples are the “music” when it comes to moving people to take action and drive real change and lasting innovation.  

But what if you get unexpected surprises?

Let's say you do the above. But what happens if you get a defensive reaction to a change you were proposing?  Perhaps it happens in negotiating with a supplier or a customer or in their response to a proposed new internal process or policy.  While revising or negotiating new purchase or sales terms, it is not unusual to trigger controversy.  After all, our sourcing, contracts and legal teams are trained to argue rigorously in favor of their position.  

How do you overcome the controversy without caving in, damaging the relationship, or above all, without depriving your organization of the innovation and change that it needs to compete effectively?  You share the data, e.g. the time, or cost savings, or the revenue or profits gained, and you share an inspiring example.  Perhaps another company or organization that has successfully implemented the very change you are proposing!

If you don't have examples of how other companies are innovating in ways that you are proposing, you can always turn to IACCM for benchmarking or networking opportunities to learn more.  And don't be limited to looking only in your industry for inspiring examples.

One final point about Inspiration

Inspiration, according to Dean Herman, Ph.d., from his leadership book Four Portals to Power – A Practical Guide for True Self Mastery for Leaders, means giving yourself over to something bigger and putting the group first before your own self-interest.   If the contract innovation you are proposing is only going to serve your contracts team's interests, your stakeholders are much less likely to be inspired. The quantitative data will fall short, and the change may not happen.  However, if you transcend your own self-interest, and serve the broader needs of your company, your supplier, or customer, including using examples and stories from beyond your function, organization, or even beyond your industry, you will hit the moon or at least, land among the stars.

Fostering innovation and positive change requires inspirational leadership.  Inspirational leadership includes using real examples, metaphors, stories, and anecdotes to give the other party, your functional stakeholders, or your audience the comfort that your data is not “lying”, like with those misguided deer hunting economists. 

1.  Negotiating Tips…Should You Listen To The Wise Old Owl? Contracting Excellence May/June 2012.

 
 
 

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