In the rapidly-growing discipline of Relational Contracting, one of the cornerstone concepts is that the parties (ranging from simply customer and supplier, to a broader group of multiple entities who are brought together for the project) are bound together as an “Enterprise”. The Enterprise is an aggregate of diverse perspectives and disciplines brought together for a common purpose. There needs to be effective communication across the Enterprise. The Enterprise needs to deploy problem-solving techniques, follow continuous improvement processes, be held to performance management principles and ensure social norms are integrated into the overall equation.
The participants across the Enterprise must foster a no-blame culture and understand the overall success (or failure) as an Enterprise will trigger certain gain and pain sharing mechanisms – many leading to a personal financial impact across the team. The Relational Contracting “Enterprise” must be inclusive of all the key stakeholders in order to attain superior results – and those results must demonstrate a positive ROI.
There is usually a strong leader of the Relational Contracting Enterprise who is pivotal in elevating the Enterprise into world-class levels of success. That leader needs to “sell” the value of the Enterprise to those who have financially invested in the Enterprise’s existence. That leader must be the spokesperson for the Enterprise. They become the voice and face of the Enterprise. More often than not, that leader comes from the customer organization – with procurement/supply management as the leading source of such leaders.
One must ask whether leading a Relational Contracting Enterprise might prove to be a developmental opportunity for leading a corporation. After all, many of the challenges facing an Enterprise Leader are also present for a CEO – balancing competing interests, e.g., buy-side and sell-side team members, into a synergistic solution and source of value.
As Relational Contracting continues to grow as a model, it will be interesting to see whether the Enterprise Leader role becomes a common stepping stone in the career path heading to the corner office of the C-Suite. The Enterprise Leader role, in balancing varied perspectives, seems better suited to grooming a CEO than the CPO or Head of Sales role.