You’re an executive in Contract Management. What are the most common mistakes you make?

1 Not defining clear objectives

One of the first steps in contract management is to define the objectives of the contract, both for your organization and the other party. This will help you align your expectations, scope, and deliverables, and avoid ambiguity and confusion. However, many executives fail to do this properly, either because they assume that the objectives are obvious, or because they do not involve the relevant stakeholders in the process. To avoid this mistake, you should always document your objectives clearly and explicitly, and communicate them to everyone involved in the contract, from the negotiation to the execution stage.

2 Not reviewing the contract thoroughly

Another common mistake is to sign a contract without reviewing it thoroughly, either because of time pressure, trust, or negligence. This can expose you to legal, financial, or operational risks, such as unfavorable terms, hidden clauses, or non-compliance issues. To avoid this mistake, you should always read the contract carefully, and seek professional advice if necessary. You should also verify that the contract reflects the agreed objectives, scope, and deliverables, and that it contains all the essential elements, such as parties, dates, prices, warranties, liabilities, and dispute resolution mechanisms.

4 Not monitoring performance and compliance

Another frequent mistake is to neglect the monitoring of the contract performance and compliance, either because of lack of resources, tools, or feedback. This can prevent you from identifying and resolving issues, measuring and improving outcomes, and ensuring that both parties fulfill their obligations and expectations. To avoid this mistake, you should always have a clear performance and compliance management process that defines how to track, measure, report, and evaluate the contract progress, quality, and satisfaction, and that enables you to take corrective actions if needed.

5 Not building relationships and trust

One of the most important aspects of contract management is to build and maintain positive and productive relationships with the other party and the internal team. However, many executives overlook this aspect, either because they focus too much on the technical or legal aspects of the contract, or because they do not invest enough time or effort in communication, collaboration, or recognition. This can affect the morale, motivation, and loyalty of the people involved in the contract, and reduce the chances of success, renewal, or referral. To avoid this mistake, you should always strive to build relationships and trust with the other party and the internal team, by communicating frequently and transparently, collaborating effectively and respectfully, and recognizing and rewarding their contributions and achievements.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?