Relational Contracting for Maximum Value and Minimum Risk
Webinar Details $219
- Webinar Length: 100 Minutes
- Guest Speaker: Jim Bergman
- Topic:   Purchasing, Taxation and Accounting
- Credit:   ISM 1.5, CPE 2.0, ATAPU 1.5, ATATX 1.5
Contracts have gaps. They are incomplete. Plus, many contracts are drafted by lawyers, for lawyers, in a way that only a lawyer can understand. As a result, many of the contracts we use are incomplete and ineffective as we pursue value and try to mitigate risk. However, a more effective approach is available, and it has become increasingly popular in the past few years – the relational contract.
This session will provide insights into relational contracting by co-author Jim Bergman, whose recent book on the subject contains insights which Noble laureate Oliver Hart describes as “pathbreaking”. How does a relational contract differ from a traditional transactional contract? What are the key elements of a relational contract? What is required of the parties to make a relational contract successful? These, and more questions, will be addressed in this insightful session by one of the leading practitioners of relational contracting.
Your Benefits of Attending:
- Establish a solid understanding of relational contracting.
- Understand when a relational contract is viable and when it is not.
- Develop insight into the contract language which differs relational contracts from transactional contracts.
- Hear the personal insights and experiences of a leading practitioner of relational contracting.
- Uncover the cultural barriers preventing relational contracting from succeeding and how to overcome those barriers.
- Create a foundation for more effective SOW's, SLA's and KPI's.
- Learn a proven process that enables relational contracting to deliver greater value.
Join Jim Bergman as he shares his expertise on relational contracting and how it could take your contracts to the next level.
- Introduction 00:01:25
- Key Benefits 00:02:24
- Topics 00:05:33
- How Does a Relational Contractor Differ From a Traditional Contract? 00:06:46
- Traditionally, Two Ends of The Spectrum 00:09:46
- Allocating Risk and Reward Through Contracts 00:11:34
- The Results Vs. Resources Decision 00:12:38
- Relational Contracting - A Hybrid 00:15:48
- What Are The Key Elements of A Relational Contract? 00:19:34
- The Written Terms and Conditions, Including SOWs, SLAs, and KPIs 00:20:03
- Written Terms Which Are Not Onerous, Nor Unfair 00:21:17
- Tenets Of Strong Relationships 00:27:56
- Social Norms 00:30:16
- Speaking Of A Charter 00:31:39
- Enterprise Mission, Vision, Values 00:40:59
- Nine Elements 00:41:14
- Gain Sharing/Pain Sharing 00:49:09
- What Is Required of The Parties To Make a Relational Contract Successful? 00:51:38
- Culture 00:51:56
- Collaboration 00:55:58
- Trust 00:58:46
- Focus On Relationship 00:59:38
- Communication Plan 01:01:14
- Project Management Tools 01:03:10
- Executive Sponsors and Stakeholders 01:07:46
- Steps to Creating and Sustaining a Relational Contract 01:10:30
- Form Team 01:10:40
- Step 1: Lay The Foundation for Partnership 01:14:12
- Step 2: Co-Create a Shared Vision/Objectives 01:15:01
- Step 3: Adopt Guiding Principles 01:15:27
- Step 4: Align Expectations and Interests 01:16:01
- Step 5: Stay Aligned 01:16:30
- Measures and Metrics on Relationships 01:17:04
- Are Relational Contracts Enforceable? 01:18:07
- Yes! 01:20:00
- Expectations are Enforceable 01:23:31
- Rocks - The Clauses 01:24:45
- Pebbles - The Relationship Tenets 01:25:41
- Sand - Social Norms 01:25:58
- The Amount of Water 01:26:33
- How Do We Know We Need Relational Contracting? 01:28:16
- Value Leakage 01:28:24
- Unmanaged Risk 01:29:27
- Defects In The Relationship/Contract 01:30:09
- Diminished Trust 01:31:06
- Disenfranchised Stakeholders 01:31:24
- Seeking a Competitive Advantage 01:31:37
- Fostering Innovation 01:31:56
- What Are The Benefits of Relational Contracting? 01:33:02
- Key Benefits - Time, Money, Quality 01:33:10
- Key Benefits - Innovation 01:34:04
- Key Benefits - Reputation 01:34:30
- Key Benefits of Today’s Session 01:35:12
- Questions? 01:37:40
- Presentation Closing 01:39:51
- Collaboration 00:56:10, 00:56:27, 00:56:39
- Contract 00:02:47, 00:02:59, 00:03:07
- Key Performance Indicator (KPI) 00:04:02, 00:04:04, 00:20:26
- Negotiation 00:07:40
- Relational Contracting 00:02:47, 00:02:59, 00:05:53, 00:06:06
- Risk Allocation 00:11:50, 00:12:34
- Scope of Work (SOW) 00:04:01, 00:22:22, 00:20:50
- Service Level Agreement (SLA) 00:20:25
- Supplier 00:07:137
- Value Leakage 01:28:24
Collaboration: A method of purchase whereby, in buying similar commodities, buyers for two or more departments exchange information concerning planned purchases in order to minimize competition between them for commodities in the same market.
Contract: A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.
Key Performance Indicator (KPI) : A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets.
Negotiation: The trading deliberations which generally lead to the lowering of prices by the vendors.
Relational Contracting: It is a contract whose effect is based upon a relationship of trust between the parties.
Risk Allocation: Risk allocation is the process of identifying risk and determining how and to what extent they should be shared. Most owners understand that risk is an inherent part of the construction process and cannot be eliminated.
Scope of Work (SOW): The Scope of Work (SOW) is the area in an agreement where the work to be performed is described. The SOW should contain any milestones, reports, deliverables, and end products that are expected to be provided by the performing party. The SOW should also contain a time line for all deliverables.
Service Level Agreements (SLA): A service level agreement (SLA) is a formal document that defines a working relationship between parties to a service contract.
Supplier: A supplier is an entity that supplies goods and services to another organization. A supplier is usually a manufacturer or a distributor. A distributor buys goods from multiple manufacturers and sells them to its customers. Similar Terms. A supplier is also known as a vendor.
Value Leakage: The difference between the value expected from a contract and the value realized in its implementation during its lifetime.