In my LinkedIn article of 1 April 2020, “The Case for Commercial Contract Management in Small to Medium-Sized Enterprises” I argued that a small to medium-sized enterprise (SME) needs commercial contract management due to the complexity introduced by digitalization. In this article I look at the:
- characteristics of the SME that challenge your fit in the commercial contract manager role; and
- competencies that guarantee your success as a commercial contract manager at an SME.
Characteristics of SMEs
The size of the company and the role of the owner are the two main factors to which you must adapt to be successful in your role of commercial contract manager.
Structure, access to resources and vulnerability to growth are all characteristics with which a commercial contract manager must contend to be successful in the SME environment.
The SME has a structure that is simpler and more informal than that of a large company. As a result, the SME’s staff tend to wear more than one hat and have broad responsibilities.i
SMEs generally have limited resources. This is particularly true for a start-up that has not yet attracted investors, making it dependent on the ability of the owner to generate resources.ii
While the SME has the flexibility to adapt to changes in its environment due to its informal structure, its limited resources can be a threat to its growth. A change in government policy or technology can have significant consequences if additional capital is required and the lack thereof becomes a constraint on the SME’s market competitiveness or even its survival.iii
Role of the Owner
An SME owner is a highly motivated, caring, and curious individual. They are avid readers and want to learn everything from why a business failed to how to find, motivate, and keep good employees.iv The SME’s owner often exhibits an informal management style, playing the role of both employee and employer. Employees are normally expected to jump in to help where needed as there is no clear division of tasks. Decisions are commonly made by the owner.v
The Successful CCM at an SME
How do these characteristics influence whether you are the right fit for a commercial contract management role at an SME? Every commercial contract manager needs certain competencies and skills to be successful. These are divided into core competencies, technical competencies, and soft skills.
Core competencies apply regardless of the size or nature of the company. You need commercial and legal knowledge, familiarity with the company’s industry, and the subject matter of the contract. When working in an international environment, at least basic cultural knowledge of all parties is essential. Finally, good communication and interpersonal skills will ensure your acceptance by the SME owner.
The technical competencies that you need to bring to your role at an SME are broad because of the range of commercial and contractual issues you need to deal with. Limited resources in the organisation mean that you must be knowledgeable in and consult on many areas that are not pure contract law, e.g. insurance, bank guarantees and regulatory issues.
You will need experience with a range of contract types, including leases, employment, and agency agreements in addition to the standard commercial ones. With cross-border relationships made possible through digitization, you will also need basic familiarity with the law in the geographies where the SME does business.
Although you may be well-versed in the core and technical competencies, without the necessary soft skills you will not be successful. The following list includes qualities that benefit anyone in a commercial contract management role, however they are critical to your survival in the SME’s loosely structured environment:
- Leadership style capable of influencing and unifying a cross-functional team
- Curiosity and willingness to learn
- Adaptability, flexibility, persistence, and the ability to work under pressure
- Communication skills at all levels of the organization
- Willingness to take on tasks that fall outside their area of expertise
- Proactivity and team-focus – this is not a role for a politician!
- Knowledge sharing
- Focus on value creation
- Commitment to help the owner realise their dream
Comments from a recent client of mine underscore the importance of these skills in his feedback:
“I have worked with Ingrid since 2006 on various contractual matters related to partners and customers in my region (Middle East). Ingrid is a very meticulous, well-organized, and rigorous contracts director, who can efficiently drive a contract preparation internally by involving the right departments and owners at the right place and time. She is also a dedicated guardian of company’s rights and interests, can position and explain them in a positive and non-aggressive way during external negotiations (key for closing), and is able to compromise if necessary and when fair for both parties, in order to close and overcome negotiation dead-ends.”
All commercial contract managers need to bring a core competencies to their role. It is the right technical competencies and soft skills that give you the ability to fit in at and adapt to the SME’s environment. I find my work with SMEs often demanding, sometimes exciting, but always rewarding. What about you – is a commercial contracting role at an SME the right fit for you?
Acknowledgements: This is the second of two articles based on material prepared by Albert Schot (schot.ch) and Dr. Ingrid Slembek (inaccord.ch) for presentation on March 26, 2020 at a local IACCM member meeting in Zürich, Switzerland.
2 Essays, UK. (November 2018). Characteristics Of The Small And Medium Enterprises Economics Essay. quoting (Welsh and White, 1981). Retrieved from https://www.ukessays.com/essays/economics/characteristics-of-the-small-and-medium-enterprises-economics-essay.php?vref=1
3 ibid., citing Aragon-Sanchez and Sanchez-Marin, 2005.
4 ibid., citing Feltham and Barnett, 2005.
5 Rubin, C. The Six Traits of a Successful Small Business Owner, found on 04.02.2020 at https://www.inc.com/news/articles/2010/07/six-indicators-of-success.html