Maintaining strong relationships with contracting partners is vital for businesses not only to survive but to thrive. Unfortunately, many companies have a rather negative view of contracts and end up approaching the process with a slanted mindset. It is understandable given that for quite some time contracts tended to involve a somewhat adversarial relationship, as both sides focused on jockeying for position and power. These days, however, this has begun to dissipate and there is widespread recognition that the contracting process must entail compromise and collaboration as opposed to competition. Here are four things to keep in mind to achieve successful collaborative contracting:
Establish Goals and Metrics
A contract is more than just a formally written exchange of promises. Contracts are critical business assets, and instruments that can carry significant financial and legal consequences. As a result, parties to a contract must ensure that everyone is on the same page with respect to goals and expectations. The only way to ensure maximal understanding is by establishing concrete objectives from the outset. Each side must understand what it is that everyone wishes to gain by entering into the agreement. A one-sided arrangement or a lack of awareness as to what each party needs can result in costly conflicts. However, by declaring the overarching goals of the contract and implementing specific metrics for evaluating whether those objectives are being met, the parties to the deal will know precisely what they are working toward and whether or not they are in compliance. In the end, having a clear cut plan in place will mitigate the likelihood of confusion and enhance the contracting relationship.
Prioritize ResultsPlenty of companies have no doubt been burned by a contract gone wrong. This experience can make it rather difficult to retain and trust future contracting partners. And, a problem that often arises is that the once burned company wants to control every aspect of the contracting process. Having a say and maintaining oversight are clearly important, but there is a fine line between active involvement and micromanaging. Companies must look at the outcome of the contract instead of focusing so much on how a contract's goals are met or the manner in which the other side goes about fulfilling its obligations. Essentially, emphasis must be primarily on the results and far less so on the way that it actually happens. As long as the objectives are achieved in a professional, timely, and legal fashion, the rest of the details are rather immaterial.
At the end of the day, succeeding in business comes down to building and maintaining strong working relationships. This is true in all economies, across all industries, and in every department of a company. Treating contracting partners unkindly is a surefire way to end up with a contracting conflict and ultimately a court battle. Thus, irrespective of how badly a contracting deal goes, it is crucial to keep things cordial and to take all steps possible to salvage the situation.