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Today, globalization and technology demand that organizations build their business strategies to respond effectively to the volatility of business environment worldwide. It’s a big challenge!  In response to it, we contract practitioners are now searching for sustainable relationships and partnerships that permit us to leverage competitive advantages for all parties without losing profit value.


Trust is key -- the secret for maintaining sustainable relationships with our colleagues and clients.  One of the most important requirements for building trust is to gain experience working jointly with all parties to learn from one another how we can align agreed expectations with desired outcomes.

But when the business approach is not grounded on a value that is sustainable, organizations too often make erroneous decisions about the type of relationship that would otherwise align with the goals of an agreement.  Unwise decisions too often lead to disputes and ruin the original business purpose. Value leakage then becomes a very possible outcome when relationships break down and poor decisions lead to misunderstanding the agreement or breaching the contract.

Whatever type of relationship you are involved in  -- be it a partnership, an association, a joint venture, or a service provider -- the time you spend on an unsuccessful relationship would mean losing the time you really needed to gain knowledge from an adequate relationship. 

Obviously, if this happens, it will interfere with your organization’s objectives to benefit from a sustainable and profitable growth in the market.

A solid partnership makes it possible to start the process of building trust between parties, by exchanging information and knowledge, by understanding cultural differences and by aligning values until all parties work together to create the desired values or outcomes. 

Such a partnership allows shareholders to gain keen insight about competitive advantages from each partner to develop the expectations and goals of the agreement.  Seeking to be more innovative and adaptable can lead to offering solutions not encountered yet either by the market or by isolated efforts to reach agreement objectives.     

In my opinion, the most common mistake we make, especially in developing countries, is to design strategies that seek only our own short-term-gain where the final values for all involved parties are misaligned from the start. This results in unsustainable relationships with our clients, suppliers and our business resources in general. 

Such lack of insight increases the risk of future profit leakage or even worse, the risk of losing profits to the competition.

Indeed, the contracting lifecycle does not end with a signed agreement.  Even with the best contract management, the contracting cycle is an interactive cycle designed to maintain sustainable relationships to the post-contract stage and beyond.  This is designed to ensure that promises offered in the agreement will continue being reliable. 

Be aware that time invested on a failed partnership will not be recovered and the major risk is the potential for you to lose the ability to assume emerging opportunities.

Globalization and technology have shifted many paradigms and have changed trends rapidly. Therefore, enterprises cannot create opportune innovations throughout the entire business chain with a high level of resilience, until their leadership starts offering opportune effective solutions to achieve better market positioning worldwide.

“Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.” William Edwards Deming quote.

ABOUT THE AUTHOR

Carmen Elena Sandoval is a multilingual (English/French /Spanish/ Portugués ) Civil Engineer with a MBA.  She has a proven background in LATAM Contracting-Commercial, Financial planning, and Project Services with over 15 years of experience working in energy projects (Oil and Gas Industry and hydroelectric ).  See also related, professional insights published by the author on LinkedIn.

 

 

Carmen Elena Sandoval, Freelance Contract Manager Consultant, Independent, Río de Janeiro

Carmen Elena Sandoval is a multilingual (English/French /Spanish/ Portugués ) Civil Engineer with a MBA. She has a proven background in LATAM Contracting-Commercial, Financial planning, and Project Services with over 15 years of experience working in energy projects (Oil and Gas Industry and hydroelectric ). See also related, professional insights published by the author on LinkedIn.

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