Communication, not just a good radar, is key for pilots and contract management professionals, says Exigent’s Global Head of Legal Services and Solutions, Rico Burnett
Tracking the health of your contracts and using the right technology are just two of the lessons we can learn from the 80s classic that has inspired our blog series. Here is the final, maybe most important of all, lesson we think we can learn from LT Pete “Maverick” Mitchell and his fellow elite pilots.
What would pilots do without the ability to communicate? You may recall Maverick helping a panicked Cougar back to base. Contracts are the same. They can get lost (no repository), crash (missed an obligation anyone?) and not talk to each other (missing opportunities to spot patterns).
At Exigent, we say that contracts sit at the ‘interception’ between finance, procurement and legal. They don’t just exist in the middle, they co-create value. For this value to exist and thrive, all departments need to come together and have a clear flight plan.
We often blame the system for being too hierarchical and not allowing proper communication, but the wider corporate ecosystem allows for far greater use and exchange of the data that we often give it credit for. The information needed to create value might not necessarily sit in the legal department, but the performance of those legal agreements most certainly is something that a legal or in-house team can leverage going forward. The silos between procurement, finance, legal and risk, and compliance are increasingly being broken down.
The key, once again, is business performance. Think big. Don’t limit yourself to your departmental dashboard. Think of how your contract metrics fit into the bigger picture. You might find yourself in a place where there is no accountability and no integrated systems with consistent and reliable data flows. If they don’t exist, think about the tools you do have and create them.
Lesson 3: Break those silos
Post signature, it is often unclear whose responsibility the contracts are – who is accountable? Contract terms begin during proposal activity to the actual negotiation and contract preparation, plus contract performance management – where is the ownership?
The time has come to change. Let’s not hide behind corporate structure – it’s probably more flexible than you think. Create communication platforms to bring procurement, legal and finance together, for the good of your contracts (and the bottom line). Technology can help and so does a holistic approach to contract management.
Ride into the danger zone
You’ve probably been humming the song throughout this series of blogs, haven’t you? Top Gun wouldn’t have been such a hit without the killer soundtrack. In a way, ignoring the recent shift in contract management is leading us to the danger zone. At a transactional level, organizations are interested to know the value they are getting from individual contracts, but it has now become critical to understand value at the portfolio basis.
Contract professionals and heads of departments need to start focusing on tangible examples of the benefits of a good, well-rounded CLM strategy because questions are being asked more and more at the Boardroom table. The benefits are very real, if you 1) measure performance, 2) utilize the tech and 3) break down the silos. Contract managers, in-house- and external counsel can start multiplying their worth to the organization today.
In charge of Exigent’s legal solutions team, Rico Burnett supports a dynamic environment in which we deliver innovative yet practical solutions to our client’s challenges. As Exigent’s As Exigent’s Director, Global Client Innovation, Rico is an advocate for best practice in Contract Management and believes all departments can achieve it, even lawyers (he’s a lawyer himself!).