Six Classic Rookie Mistakes In Contract Management

A rookie is usually taken to mean an inexperienced person.

A mistake is an act or judgement that is wrong.

A rookie mistake is a basic mistake like one a person with no or little experience of an activity would make.

A classic rookie mistake is the sort most commonly made by inexperienced people in a particular endeavour. It is also the term used, either critically or humorously, to describe such a mistake when made by somebody who could reasonably be expected to know better.

Contract Management is essentially about managing risk. Anything to do with managing risk is complex. Complexity can be hard to grasp. Misunderstanding can lead to mistakes. Consequences of mistakes can range from funny to fatal.

The people involved in Contract Management will ideally be comfortable with complexity, and have the personal attributes discussed in our related article.

As with most endeavours, those new to Contract Management usually need to start at or near the bottom. This is where the foundational learning takes place, through formal education and on-the-job training and mentoring. Knowledge of the fundamentals is key to dealing with complexity.

Learning the ropes, getting the lie of the land, knowing what’s what, taking your lumps. These are age-old metaphors memorialising the educational journey from unproductive novice to competent worker to recognised expert.

Everybody makes mistakes. Rookies usually make more, mainly because their starting skill base is low. There can be new concepts to digest, new terminology to understand and memorise, new processes to follow, new technologies to use, new speed to adapt to, new expectations of self-reliance, new pressure to perform.

Rookie mistakes are inevitable. They can occur anywhere, at any time, even despite measures put in place to prevent them. This is because rookie thinking is often not constrained by accepted practice, because that practice hasn’t had time to become habit.

Close monitoring of rookie activity, quick response to and practiced de-escalation of the occurrence of rookie mistakes, plus preventive educational and process interventions may all be prudent actions to consider when taking on a person who is new to the black art of Contract Management.

Classic rookie mistakes in Contract Management come in several forms and flavours. Here we discuss the top six. 

1. Blind faith

In the context of Contract Management, blind faith describes an organisation’s uncritical acceptance of another party’s written or spoken statement in or about a contract between them or its operation.

Blind faith means not reviewing the contract for errors of omission or commission, or checking that it reflects the agreed deal, but simply trusting that everything is ok.

Blind faith also means accepting the other party’s self-reporting about performance against contract outcomes and obligations, again with no checking or questioning.

This can be very risky behaviour, depending on the importance of the contract to the organisation. It’s like walking around with a ‘kick me’ sign on your back to assume that the other party never makes mistakes, never accidentally or deliberately misrepresents an operational situation, and never lets any incorrect beliefs or invalid assumptions on the organisation’s part remain uncorrected. It’s neither a good look nor good practice, and really is just asking for it.

How prevalent is this form of blind faith? Probably very in organisations with little in the way of formalised or structured Contract Management activities and limited access to legal services, and in rookies who are just starting to be exposed to Contract Management principles.

This doesn’t mean that organisations with higher levels of Contract Management maturity don’t have a "blind faith blind spot". It’s just not practical to give every contract the same level of attention, so the risk is likely to be limited to low-value, commodity-type or similar contracts.

So, what’s a rookie to do? Trust by all means, but verify at all costs. Even if that’s ‘not how things are done around here’. Having a bad standard is as pointless and unproductive as not having any standard.

Read the contract like your career depends on it, because it just may. Identify everything that could do with a bit of ‘clarification’ and ask for it. Be concerned if the other party demurs. Report any issues that might need to be addressed by an amendment to the contract or other actions.

Take notes at meetings with the other party. Check that those notes match the other party’s actions following the meeting. Report any discrepancies for urgent follow-up.

2. Corner-cutting

Taking shortcuts can work when something appears (to you if nobody else) to be overly complicated, cumbersome or plain unnecessary.

So can taking shortcuts when you know or strongly suspect that you really shouldn’t.

The trouble with corner-cutting is it can be habit-forming when shortcuts always appear to work. Well, so far at least.

So then comes the day that the work skipped by a shortcut was needed for a particular set of circumstances that might only happen once in a while.

BOOM!

Who knows what the organisational, professional or personal outcomes might be?

Corner-cutting is like the metaphorical slippery slope: a course of action likely to lead to something bad or disastrous, on the basis that once you start to slip, it’s mighty hard to stop.

Corner-cutters are tempting fate by taking independent action. It’s far better risk-wise, and possibly more personally rewarding, to point out improvement opportunities, have them thoroughly evaluated, and implemented only if they stack up.

3. Overstepping the mark

Some words or actions can be unacceptable for a situation or an audience.They may have been uttered or performed in all seriousness, in anger, jest or ignorance, subtly or blatantly, but nonetheless, offensively to some people.

The audience can be internal to the organisation, external or a mix.

Written and unwritten rules of propriety, accepted good practice or the law might be broken, with or without heed of the consequences.

Overstepping the mark in this way can evoke many types of immediate or delayed, sometimes disproportionate, negative response from the recipients of the words or actions.

Blowback might also be expected from certain levels of organisational management, and possibly regulators and the legal system, depending on the gravity of the situation and the level of offence caused.

‘No offence intended’ may not be accepted as a defence. It’s how the message will be received that’s important, and consideration needs to be given to that. Spoken or written, private or public, apologies may not be sufficient redress.

Another type of overstepping relates to acting beyond an authority or competence level.

Acting beyond the limits of any authority granted is generally not allowed and almost certainly unforgivable in most circumstances where such action wasn’t necessary.

If doing something is "above your pay grade", and for rookies that’s going to be most of the time for some time, don’t even think about doing it. Not unless you get approval in writing. From somebody who has the authority but just isn’t in a position to attend to the matter in question. A familiar example might be where a contract needs to be physically signed today but nobody with the authority is currently available.

Acting beyond a competence level should also not be allowed without authorisation, for obvious reasons, and is unacceptable in most circumstances.

The definition of competence may be fairly loose, but if there is a general confidence in a person, earned by past performance, that the job will be well done regardless, then and only then might deemed competence be overlooked and authorisation to do the required work granted.

As a general rule, rookies shouldn’t let self-confidence overrule actual competence and unilaterally decide to have a go at something that could end badly. Making the same mistake once can be a pretty firm rule in some organisations. It might seem unduly harsh to the rookie in the spotlight, but it’s a good test for the presence of a self-preservation gene that limits risky behaviour, a critical requirement in some organisations.

4. Out of sight, out of mind

Contracts are widely known as complex, hard to read, hard to understand and otherwise generally hard to get a grip on. And that’s for experienced Contract Managers, and occasionally lawyers.

It’s a steep learning curve for rookie Contract Managers to become fluent in legalese, recognise the language patterns used to express certain concepts, gain familiarity with the different forms and terminology used for different types of contract and their varying subject matter.

These difficulties can be compounded by how clauses covering the same aspect can vary within contracts of the same type and across contracts of different type.

With a fair understanding of contract, the next hard part is learning how to determine the implications of every clause in a contract, what’s related to what, why and how.

So far, so good. Your rookie Contract Manager is making progress in understanding how contracts operate, why they look like they do, what’s reasonable and what’s not.

The final part is harder: figuring out what a contract lacks. This is where out of sight, out of mind can occur: when something is not visible, it is easily forgotten and dismissed.

This is a complete change of aspect, from considering how a contract will operate based on the terms and conditions presented, to discovering what it’s missing, predicting the implications of that, and deciding what should be added to the contract to make it more acceptable.

Rookies can make mistakes here, mainly due to lack of exposure to enough contracts to have a sense of what they really ought to contain, which depends on contract type, purpose and the organisation’s approach to contract risk.

These mistakes can be costly if not detected and corrected. Prudent Contract Management mentors should be well aware of this from their own early days, and rigorously check a rookie’s work before it gets released into the wild. A failure to do such a check, or to do it thoroughly, that results in unwelcome outcomes should blot the mentor’s record more than the rookie’s.

The search for missing clauses can be made a lot simpler and more effective if:

• The organisation has prepared contract templates showing the clauses it prefers to see in particular contract types, or
• The Contract Management team has prepared its own informal contract templates for checking contract completeness, or
• Rookie Contract Managers prepare their own informal contract templates over time, based on guidance and mentoring from other team members.

5. Prioritisation paralysis

Every organisation experiences chaotic situations from time to time, some of it driven by external factors, some internally generated, some affected by both.

For Contract Managers, a chaotic situation might occur if say, on the day when a dozen activities have been scheduled, half of the team calls in sick, some new contracts have turned up overnight for ‘top priority’ review, the CEO has asked for a quick overview of contracts that might be at risk in certain countries where the political situation is destabilising or an epidemic is developing, plus a few other matters that turn up unannounced during the day.

Chaos can be overwhelming for any rookie Contract Manager with limited exposure to it, who may be at a loss to understand how to deal with it in any sensible way.

Focus is critical for creating order out of chaos.

Focus is achieved through prioritisation, which has two key dimensions: urgency and importance.

According to Covey’s ‘The 7 Habits of Highly Effective People’, prioritisation ends up having four levels:

1. Urgent and important: this is a crisis, deal with it now
2. Not urgent and important: this is a goal, prepare a plan for dealing with it to prevent it becoming a crisis, then deal with it in any lull between crises
3. Urgent and not important: this is an interruption, deal with it when there’s nothing with a higher priority that requires immediate attention, or a gap opens open during the handling of a crisis or the planning for a goal
4. Not urgent and not important: this is a distraction, do it when there’s nothing waiting with a higher priority, or just ignore it.

It can be very difficult to determine the actual urgency and importance of individual matters if everybody seems to be claiming that their requirements are both urgent and important.

This is when prioritisation paralysis can occur, the inability to figure out a sequencing of activities to be worked on. This is especially the case if most things are indeed urgent and important.

Such a lack of focus can result in the wrong things being done at the wrong time, which can just increase the level of chaos and make it harder to get under control.

A good rule of thumb for the rookies is, when in doubt, ask, and don’t stop asking unless and until effective answers have been received.

Hopefully it will be a rare occurrence for rookie Contract Managers to find themselves working alone in chaotic situations, for everybody’s sake.

6. Staying "schtum"

In the old days, being a rookie really could involve being told to keep your ears open and your mouth shut, staying "schtum", often at the risk of some form of corporal punishment.

This sort of be-seen-but-not-heard, master-apprentice approach must have held back so many advances in thinking and doing for just about ever, or at least until the apprentice attained master status and was able to escape from the constrained thinking of the elder.

Hopefully the old days are gone for good. Times are very different today, even from a single generation ago. Technology moves fast, but it doesn’t even approach the speed of idea generation. People are more and more used to thinking about the future, how to make things better, based on the apparent shortcomings in today’s environment.

Today’s rookies’ lack of experience and exposure to the business or craft they’re involved in shouldn’t preclude them asking ‘why?’ or ‘why not?’, or stop them rejecting ‘because’ as a reasonable answer.

Neither should it deny them the opportunity to ask ‘what if?’ or ‘how about?’.

Fresh eyes with a different mindset, no matter how inexperienced, can often see the wrinkles and imperfections that the habituated now tolerate without fuss or notice. Rookies can make useful suggestions for countering things that could be worthwhile in their own right or trigger a set of improved or different ideas from the experienced people who need to respond to such suggestions.

So, staying schtum just wastes opportunity. Who knows what sort of game-changer insight or idea might pop into existence as a result of speaking up, or what benefits it might provide.

Curiosity, experimentation, problem-solving. These should be the basis for the rookie speaking up, never arrogance or superiority, or any sort of belittling of the status quo.

Summary

Taking on a rookie Contract Manager requires a considerable investment of time, effort and money. Choosing well can be hard but insights into the desired personal traits can be found in our related article about what makes a great contract manager.

Rookies will make mistakes as everyone does, but they will need to show a declining frequency over time to prove that they are worthy of the investment.

A supportive organisation will obtain much better outcomes from their rookies than otherwise. Inclusion, encouragement and recognition is needed to show the rookies that there is light at the end of the tunnel when it might seem like they’ll never get a handle on the work.

Development of relevant training materials, overseen by seasoned Contract Managers, can go a long way to showing what needs to be done, how and why, in accord with practices followed in the organisation. On-the-job training and more formal courses as necessary can help to minimise the occurrence of classic rookie mistakes.

Those senior people would serve themselves and the rookies well in their approaches to training and mentoring, by remembering that they also started from the bottom knowing nothing. If they had a hard time of it back then, the experience should compel them to ensure that their rookies do not suffer the same trials and tribulations.

If you would like more information about approaches for minimising classic rookie mistakes, or specifically how Gatekeeper can help in managing contract risk, then contact us today for a free consultation.