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Ten attributes

In this animation with voiceover, **Tim Cummins** (President of WorldCC) shares the top ten attributes of highly effective of successful contracts.
TIM CUMMINS: Earlier we looked at the 10 pitfalls, the areas that cause value loss. Let’s now look at the counter side of all of that and see what are all of the things you should be doing if you want to get good results from your agreements. Well, number one was agreeing scope and goals. And here, of course, we’re actually working together to make sure that there’s clarity, that we do have mutual understanding, and that we’re testing for that mutual understanding and aiming to avoid later claims or disputes. This includes recognition that often there is uncertainty. So in that case we must structure our arrangements in a way that can cope with it. Secondly, we involve the commercial specialists early.
We make sure they’re engaged because they are the specialists. They’re the people who bring us the right form of agreement, the right terms and conditions, who can test and check a lot of the underlying policies and principles that might affect the way that we go about doing this particular transaction. We plan for collaborative negotiations, looking not only internally and collaborating with key internal departments and stakeholders, but also externally to ensure all the views are being considered and reconciled so that we don’t have people opposing what we’re trying to achieve.
We drive efficiency in that pre-signature lifecycle by making sure that the right people are involved, by ensuring that we can move with speed, but at the same time with accuracy and with inclusive behaviours. We make sure the risks are looked at in a holistic way, both likelihood and consequence. So we don’t just focus on the legal clauses, such as liabilities and indemnities and intellectual property rights and liquidated damages. We look instead at the sorts of mechanisms that are really going to help us to succeed– better communications, clearer responsibilities of the parties, good change management mechanisms.
We incorporate the right sort of terms and conditions so that we can achieve flexibility and governance standards because we know that the later stages of this agreement are often going to be tricky. They’re going to be subject to significant changes that are going on around them. And they need to be designed accordingly. And we design those contracts for users. We structure them in a way that’s easy to understand. We use plain language. We maybe use visual items. We use graphs, charts. We use flow charts and tables so that people can easily interpret and understand and put the contract into practical use, not as a legal weapon but as a business instrument.
We also work hard to make sure that there are workshops that bring together the team that negotiated with the team that’s going to take on and manage implementation. There’s clear and precise handover. There’s clarity over who’s going to do what. And there are continued discussions between them, as well as appropriate documentation and system support. Now at number nine, we come to that, technology, the system support, that supports the entire process with proper communication, proper controls to ensure the right types of approvals and to generate notices about milestones and alerts if actions are due or overdue. And finally, that means we have, in fact, invested in creating an environment where there will be robust post-award process and governance.
It means that we’ve deployed the skills, the people, and the tools that actually enable us to reduced dramatically that 9.2% loss of revenue.

Earlier we looked at the 10 pitfalls, the areas that cause value loss.

Let’s now look at the counter side of all of that and see what are all of the things you should be doing if you want to get good results from your agreements.

In this video, Tim Cummins shares WorldCC research and reveals the ‘Top Ten Attributes of Successful Contracts’ which can enable businesses to dramatically reduce the average 9% loss of annual revenue.

A one page summary of the WorldCC ‘Top Ten Attributes of Successful Contracts’ is available to download (in PDF format) from the bottom of this page.

WorldCC have collated support materials specifically for this course in the form of research reports, blog posts and webinar recordings. You can access them via the link at the bottom of this page.

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Contract Management: Building Relationships in Business

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