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As you know, during 2020, the global pandemic caused many companies to decentralize their workforces to adjust for employees working remotely, being forced to quickly transition from comfortable office settings, to smaller, sparsely populated, remote workspaces. Throughout that time, adjusting to this change resulted in some mistakes made followed by lessons learned. But perhaps the hardest thing now is to continue taking corrective actions as we may soon face a compounding, pandemic threat -- the delta variant!1 So, how can we combine interpersonal communication with lessons truly learned to get solutions that really stick – even during an uncertain future?

In contract management, “lessons learned” refers to a specific written summary of what was learned and experienced throughout the life of the contract. From as early as the request for proposal stage, a company can document lessons learned so that they can be more successful in the future. Every challenge, risk, and even success during the contract lifecycle should be documented along with the solutions and rationale to help prevent repeating the same mistakes and simultaneously apply past knowledge to new projects so that the success of one contract can be duplicated in another.

Interpersonal communication is a targeted and encouraging exchange of information which combines thoughts, feelings, and ideas among people with effective learning being the result. Lessons learned tie into interpersonal communication which looks differently than it did two years ago, because within that short time it has become one of the most critical skills for contracting teams to succeed within today’s environment.

By contrast, poor communication among team members can lead to mistakes and lessons learned – the last thing we want, correct? And what makes relationship more difficult today? Instead of conducting most of our business meetings face-to-face, we rely on virtual meetings and instant messaging during which most of us turn our cameras off and miss seeing visual language -- facial expressions, tone, voice inflections -- that deepen the meaning of the message our team is communicating.

Don’t always depend on tribal knowledge alone

Tribal knowledge is any information pertaining to a product or service process that resides only in the minds of the employees. The information many reside with one or many employees, and it may vary between employees, but it is undocumented in nature”2 Many companies depend on tribal knowledge by assuming all employees have tribal knowledge of commonly understood procedures and policies. Unfortunately communicating “tribal knowledge” is more difficult to teach or demonstrate “hands on” because of the upsurge of virtual meetings.

RESOLVING LESSONS LEARNED

Use a predetermined approach

Having a predetermined approach to handling issues will help us address problems. Learning from conflict is important to future success and positive change. As contract management professionals, we strive to manage customer and supplier expectations. A good way to ensure future success is to take corrective action based on lessons learned.

First, start with a request for proposal (RFP)

Both buyers and sellers should document lessons learned early, during the contract lifecycle starting with the request for proposal (RFP). The benefit is obvious: for example, does your documentation verify that the requirements were clearly defined, and the expectations of the suppliers were reasonable? A common mistake is not recording the lessons learned until the contract closeout phase of the contract lifecycle. It’s equally important to look at the reason behind the mistake or challenge, because that is where the problem most likely originated.

Second, describe each lesson learned – about five steps depending on the details…

  1. Document how it started, why and detail how the challenges were handled (including decision making factors).
  2. Verify that requirements were, or were not, clearly defined
  3. Ensure that expectations of suppliers were reasonable
  4. Analyze the outcomes
  5. Store resulting data in a place accessible to all so that the information can be retrieved later.

Lessons learned should include

  • the planning phase leading to a contract;
  • rationale used in decision making throughout the life cycle of the contract;
  • customer expectations;
  • planned and unplanned events;
  • performance issues and accountability;
  • conflicts and resolution;
  • changes and solutions;
  • risk management and mitigation;
  • contract compliance; and
  • knowledge gained.

POINTS TO REMEMBER

  • Because it is important to clearly document the success and failures of each contract, a lesson learned report is helpful throughout the contract lifecycle; and when you add all the lessons learned at the end of every step or major task, it helps greatly in the next step.
  • In addition to documenting the lessons learned, review previous learnings, and apply them at the beginning of the contract lifecycle. If you expect those lessons to be useful to others, document them in shareable storage where they will be easy to understand by the next contract manager who faces a similar event. 
  • Eliminate onerous terms (burdensome or excessive terms in a contract) if possible. Mistakes made during the contract lifecycle can result from decisions or judgements that did not pan out as expected.  Sometimes contract managers will agree to onerous terms and conditions based on the history and the relationship or partnership of the two parties.  However, as people retire or move-on, those relationships can change, and onerous terms become meaningless or confusing and as such can negatively impact the contract performance.

Lessons learned are not just for executing the contract.  You can stretch the value of lessons learned to improve your skills and sharpen your foresight. It’s a good habit to study every lesson learned after a negotiation to help improve your skills for future negotiations. For instance, were you prepared enough for your negotiation?  What could you have done better?  Learn from your experiences to make yourself better in the future.

My personal experience spoke volumes to me!

I am passionate about this subject because I can recall two instances in my career where a clearly documented “lesson learned” would have benefited my success in managing those contracts.

  1. Several years ago, I was assigned to be contract manager for an existing contract and I had so many questions right from the beginning.  Unfortunately for me, the person who negotiated the contract was no longer with the company so I could not reach out and ask my questions.
  2. Recently I took on a new contract and the prior contract manager is retiring. I wish I was able to foresee what issues could come up in the future and be able to ask those questions now to gain his knowledge and insight into those issues.

The value of documenting the process of lessons learned -- from the customer requirement through solicitation to contract close-out -- is extremely beneficial. The focus is not on individuals but on how lessons learned apply to specific roles in the proposal process. The primary goal of lessons learned is to create a culture of knowledge sharing.  The process also promotes the use of existing knowledge to achieve contract success and contribute to learning throughout the company. Lessons learned can help save future cost and time of market research and contracting strategies.

For a lesson to be truly "learned," it must result in a change. You gain nothing by discussing lessons learned just to check a box that this step was completed. Contract managers must do something with the information collected. Problems and challenges should turn into action items and opportunities that will lead to improvements on future proposals. Let’s not forget how the pandemic has forced significant and costly changes to business operations and contracting policies worldwide.

END NOTES

  1. Effectiveness of Covid-19 vaccines against the B.1.617.2 (Delta) Variant, a background article on pandemic surge posted by The New England Journal of Medicine, July 21, 2021
  2. Definition of tribal knowledge in accordance with ISIXSIGMA article titledTribal Knowledge

ABOUT THE AUTHOR

Tamara McMahon, IACCM certified as Contract and Commercial Management Expert (CCME), has been involved in several facets of contract administration and negotiation, including managing and facilitating the competitive contract negotiation process, statements of work, target deadlines and terms and conditions of contracts. She has supported contract efforts from receipt of Request for Quote (RFQ) and contract negotiation.

In 2019 she published an article surrounding World Commerce & Contracting’s (formerly IACCM) 2019 Benchmark Report describing the typical role of contract management and its measurement systems. The article, Aligning expectations with requirements – what does the contract say? illustrates many common challenges identified in the report - especially the issue of timely and appropriate use of contract management expertise and the importance of applying metrics that drive (and demonstrate) true value.

Content reflects views and opinions of the author and do not necessarily reflect the views and opinions of World Commerce & Contracting.

Tamara McMahon

Contract Administrator, Parker Hannifin Corporation, Parker Aerospace, Irvine, CA

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