Tips for Improving Employee Accountability in Contract Management
As with everything else in business, your contract management team is only as strong as its weakest link. Contract management processes can be vastly complex, but at their core, they are all based on a simple concept: the ability to uniformly track all aspects of, and actions related to, the contracts of your enterprise.
A key part of tracking in contract management is to keep all employees accountable for their actions and inactions. In this article, we will review four strategies for improving employee accountability in contract management.
- Shift from Blame to Accountability
The first step is to set up a company culture that doesn’t confuse accountability for “passing the buck” or seeking as many “gotcha moments” as possible. Instead, the focus on accountability should be on tracking work and accomplishments. It’s about having a snapshot of any contract lifecycle and being able to answer the who, what, when, and where questions.
Employees may not have full control over a lot of circumstances, but that doesn’t mean that they don’t take actions or decide to hold off on certain decisions. By creating a contract management system that allows you to track the activities of all employees in real time, you can have conversations that focus on facts and not on speculation.
- Establish a Decision Framework
Of course, you can’t expect that employees will magically start becoming more accountable just by telling them that they need to. Contract management departments need to establish a clear framework that allows employees to make the right decisions at any point of the contract lifecycle.
Among many other factors, a decisions framework for accountability needs to answer the following questions:
- How will this change order affect other individuals and what steps are necessary to inform those individuals of those changes?
- What is the policy to change the language of a clause outside of the pre-approved contract language?
- Where is alignment or support from others needed to execute specific decisions taken by a contract manager?
With no guidelines to refer back to, employees shouldn’t be penalized for not knowing where to submit requests for new services, contract changes, deliverable sign-offs, and formal contract communications. Everybody needs to be on the same page. By establishing clear job descriptions (e.g. who is authorized to submit or approve new requests or projects), providing decisions trees, and keeping documentation of contract processes, a contract management department functions much more efficiently.
- Embrace Contract Management Technology
It’s a fact that an enterprise contract management system is superior than a paper-based one. For example, the government once withheld a $195 million payment from Lockheed Martin because the company kept manual logs of the costs and schedules for its F-35 jet contracts.
While a client understands that you may need some time to know how much of a budget has been consumed so far, she may be puzzled as to why that time is weeks as opposed to hours. In the field of contract management, knowing whether or not a process has been completed can be easily tracked with a contract management system. Email notifications of actions taken by employees can be automated, time-stamps of document updates can be kept, and updated clauses can be pushed to all employees.
- Promote Proactive Communication
In contract management, the importance of communication can’t be overstated. Without a clear decision framework, a detailed job description, and a contract management system, an employee may be unintentionally taking actions or inactions without going through the proper decision channels and the necessary communication channels.
In addition to automated emails that are triggered by completed milestones, a contract management system provides you the option to create a customized contract lifecycle. For example, it’s one thing is to expect that somebody review the draft of the contract and quite another to assign somebody a specific task within a well-defined contract lifecycle. By having a contract lifecycle defined in advance, all employees have better context around schedules and procedures and can plan their activities more effectively.
Instead of reacting, employees can think proactively and start planning for upcoming processes, which requires active communication with supervisors and peers.
By shifting from blame to accountability, establishing a decision framework, embracing contract management technology, and promoting proactive communication, your enterprise takes important steps towards improving employee accountability in contract management.