Picking the Right People for Contract Management - Kim Miller

Made with speech-to-text software, so a few words may be off.

0:00Welcome to another episode of Contract Heroes, the show where our guests, and sometimes us, provide best practice recommendations on all things related to contract management. Hello, everyone, and welcome to another episode of Contract Heroes, where we're not the heroes, our guests are. Today, we have an exciting one for you. Kim Miller is joining us, and, uh, Kim has a ton of experience in the space working with contracts and, uh, supply chain management. So before I flip things over to Pepe to give us a, a better understanding of what we're gonna be chatting about today, uh, Kim, I wanted to, uh, welcome you a- and flip things over to you so you could just give us a quick background on, uh, where you've been and what you've been working on. Great. Thank you. Thanks. I'm happy to be here today.

0:54So I'm Kim Miller, so I have over 25 years of experience in A and D, so aerospace and defense, and currently I am a senior director and acting VP of supply chain at L3Harris. Throughout my career, I've had a number of opportunities to engage in contracting and supply chain contracting and subcontracting, so just opportunities to really learn, develop, and grow and understand how we engage with our supply chain, as well as how we engage with our customers. So happy to be here today and have a conversation about sub-tier contracting, supplier contracting, as well as our customer base and contracting. That's awesome, Kim, a- and it's great to have you in the show. And let me tell you, in the, in the few past episodes, we've been talking about a lot of the processes on how you can, um, start working before going to technology, and what should you have in place before, I don't know, you know, been looking for technology in order to do automations and reports and all the stuff.

2:00But I think we've been forgetting one of the most important assets inside the contract management, which is the people, the people that works in all the different department that are, um, that, uh, well, are working in order so, so that the company can, um, uh, can, can, can work properly. And but before we jump in that special questions, I would like to, uh, ask you your personal opinion on why do you think the contracting process of every organization needs, needs their attention? So processes really are the foundation for how people actually do their jobs and work. So to have consistency and for the team to understand what their roles are, it's really important that the organizations first get their processes established and set that foundation. And for me, I really believe that they need to be common.

2:57So from a supply chain perspective, if there's different organizations or different business units, I strive to look for that commonality and how we can have consistency in those processes, whether it be supplier strategy, how the contracts are actually set up. That way, if folks are moving from one organization or business unit to another, that consistency in policy and roles really helps then to grow the individuals in those different areas. And as we talk more about the technology, um, also that those processes are foundational. The enabler really is the technology, but the process is that foundation for the people to do their roles and key for that understanding. So, so to me, that is one thing that any organization needs to have in place first is that foundation. I- are those processes and that foundational element for the people to, to do their roles.

4:00And so, and then kinda just expanding on that a little bit too, um, then having the right people and how they do their jobs and that understanding, that, that also is a key element. Um, the team and those people that are doing those positions, it's really important to have that, that talent build upon for those, those areas. Yeah, Kim, and, and I think, you know, something important there that, that you also said was the consistency between those business units, and I, I think that that is something that, um, you know, organizations are, are starting to focus more on now, especially because, you know, more folks are working remote. Um, but I would say, uh, again, I, I guess a follow-up question for that is, um, have you seen, you know, either the organizations you've been at or, or, um, other organizations, um, when they're trying to build that consistency between the business units, do, do you see them rolling out, um, these strategies to a single business unit at, at a time? Or, or are they trying to incorporate the entire organization in, in one swoop? It really depends if you're gonna do a big bang across the entire company or do it a business unit or a location at a time.

5:14It just depends on, I would say, the company's, uh, risk level. And so a little riskier if you're doing it big bang and rolling it across out to everybody, depending on the size of the company. A lot of times it makes more sense to do it in a smaller pocket, do a test case, make sure it work- works, makes sense, and then roll it out and broader to try to minimize the actual disruption. So, um, most of the companies that I've been at and that we've done this in, it, it really is about rolling it out in bits instead of doing that big bang, creating that overall disruption. So, um, that is definitely something I would recommend. Again, it goes to the, to the size of the company and the scale and likelihood of the assumption of risk. And so you can always do it by a business unit- Or you can actually do it by a location and roll it out by location or business unit, and then expand until you encompass the whole company.

6:16And really looking at, too, um, as you're doing contracting, I think it's important to look at contracting from both the customer as well as the supplier. Because as it comes down to it, really, contracting is contracting. Sure, there's gonna be some differences in your terms and conditions, but there's a lot of synergies that people overlook as we're looking at how contracting is actually done. So I think that that's an opportunity, too, as we're looking at the foundation, looking at the processes, looking for that commonality and synergies between the customer-facing and the supplier-facing. I think that's key, too, that, that a lot of times organizations will overlook because te- technically they'll say, "Oh, they're just so different, we can't do them, um, at the same time and/or in a similar way." Right. You need to see the complete flow in order to understand how the company must perform, right?

7:11So, uh, Kim, now that, that you mentioned that, and we're going to mo- to go a little bit deeper on the strategies, I would like to talk about performance, uh, and, uh, relationship amount a- a- um, among all these departments inside, uh, that company. And how can companies implement the more strategic, uh, contracting processes in your, in your personal ex- experience? And, and part of it is, too, is developing... Like, we talked about the processes and then the people, and really understanding the different types of contracting practices that are out there. So whether it's performance-based, relationship-based contracting, an approach of vested outsourcing, there's a lot of different contracting strategies that can be utilized. However, i- if you have a mature organization, great.

8:03And to me, a mature contracting organization is one that has supplier strategies, understands the strategic, critical, and tactical suppliers that they've outlined, has well-defined processes that are functioning across the supply chain as well as contracting, and then really have the people and talent developed that understand true contracting. Once you have those foundational elements, then you can start talking about some of the strategic contracting, when to use those performance-based contracts, when to, um, use the relationship-based contracts, or when to use vested outsourcing, because you're not gonna use them the same. And you're not gonna use them- Right... on your tactical suppliers. Most of the time you're gonna be focusing on those suppliers that are strategic or critical from a strategy standpoint. And so you really wanna balance those and, and what is the right tool or contract type to use with which suppliers.

9:05So, you know, it's really a maturity model, too, and really understanding the dynamics of the relationship that you wanna build with those suppliers going forward. Right. And can we go a little bit deeper on each of those strategics? Like, what do you mean when we're talking about relationship based, uh, and the o- and the other strategies? Okay. So relationship based, to me, is really about how you're going to work together and to achieve a certain end state. And this is really, for me, more around your strategic suppliers of, um, establishing those terms based on the relationship and the functioning of that relationship, and how you're going to engage, and how you're ultimately gonna satisfy the customer's needs. And so looking at it as far as what are the trade-offs, who's gonna be doing what in this relationship, and how you're going to act, um, to achieve that end deliverable.

10:09Whereas performance could be more around your critical or some of your strategic suppliers. It's how are you going to perform to meet the end state of that contract. And so, um, really it's not just about quality, it's not just about delivery, it is also about the, the performance of the deliverable, how you're going to support a customer once you've delivered a product, and looking at it from, from that end state again. And, and ultimately, it's about the deliverable and how you're gonna support potentially your end item customer. And then the other, as far as the vested, vested is really, to me, focusing on building out the relationship together. Understanding and agreeing on the risk, um, profile that both of your companies are going to engage in, and developing that actual contract together and jointly.

11:09To me, that is the most collaborative type of relationship for, I would say more, again, the strategic suppliers that you want to build that out. So really some different models that are out there and available to utilize. Again, based on that relationship, based on the str- strategy of the suppliers, and based on the criticality of those as well. So Kim, I mean, it sounds to me like, you know, the, the vested kind of both organizations coming to an agreement and working together to come to that agreement would be the best of both worlds. Is there any scenarios where maybe that's not possible or, or that's not the best approach to take? So if, if you have a, um, contentious relationship, that's probably not going to, to work or it's gonna take longer to build that out. You know, um, if it is an adversarial type of relationship where you're not... both sides aren't willing to sit down- Mm-hmm...

12:02and craft the agreement together and understand the risk profile- Definitely have some additional hurdles that would have to be overcome. Because to me, that is about trust. A- and, and when it really does come down to supply chain contracts, it really has to do a lot about trust and making sure that everybody is comfortable with the agreement, um, and, and coming to a, a place where it seems to be fair. You know, there's always gonna be trade-offs, but there's got to be a balance of risk, and there's gotta be terms and a foundation that can be grow and develop and that relationship can, can come to fruition. Okay. Yeah, and, and I think, you know- Yeah... if, d- all of those different types of, of contracts all need, I, I think, one key component in place to, to make them successful, and I, and that's the people.

12:59And, and how- Right... how do you go about putting the proper people in, in the proper roles inside of an organization? Is it just based on experience? Is there other, other things that you look for when, um, you know, trying to source a new position? Can you walk us through that a little bit? Yeah. Um, and you're right. It really does come down to people, and you wanna make sure, too, that you put agreements in place that as the people move or change, that you still are able to continue that relationship going forward. So in a way, it even starts earlier, and it's more about a culture, and a culture within a contracting, subcontracting organization, a supply chain organization, and that culture then is propagated and brings in and breeds the people that wanna work within that culture. So, you know, we've had a lot of conversations across WCC and industry about getting the right people in these positions.

14:03And so it really is important to try to get folks ear- early in their career to try to develop this. So we've had conversations about doing apprenticeship programs and, and in colleges and really defining programs that are focused on contracting and negotiation, not from a legal standpoint, but from a business standpoint. Right. So it is really important for us to understand that, that these are about, contractual terms are about doing business. Um, a lot of times, sometimes you get legal involved, and the terms are difficult to understand. We really wanna make sure that they're simple, they're straightforward, they make sense to everybody. And that, again, it's about doing business, how to enable the business. So it's important to understand that the folks that are doing this should have some understanding about the law, understand terms and conditions, ramifications, understand limitation of liability terms.

15:10You know, all of those are foundational. But then we need individuals that have that business acumen, understand the business, understand relationships, understand how to draft simple and straightforward language, understand the impacts on both the buy and the sell side of the contracts, and understand the fluidity there. And so it really is about developing those people, those individuals that are relationship based, can create and develop relationships with individual, understand the intent of the terms and conditions. Also, understand the business and the goals and the outcome and the strategy that the business is really trying to achieve from a long-term perspective, so that they can build a cohesive and comprehensive agreement, again, that is risk balanced, that is in the right state for the business based on where the business wants to go, but also has the appropriate language in it to support from a legal perspective if anything ever does go wrong in the relationship. And so really, I think it's important, again, that we're growing and developing these individuals in college, and that we're giving an opportunity to look at different companies and experience different types of contracts.

16:34Because tech companies versus A&D versus, uh, pharma, gas and oil, there's always some commonality, but we can all learn from the different aspects of some of those businesses that could be incorporated. Um, we should be looking at this from a best in class, world class perspective as far as contracting and not just our specific industries, again, not just the buy and sell side. There's so much to learn when we look broader than when we focus really narrowly. Right. And it's- Go ahead, Fabian. And, and it's good that you mentioned this, uh, Kim, because we actually had a conversation just a couple of weeks with Sally Guyer and with Paul Branch just to talk about this, right? I mean, uh, when you involve legal at the beginning, I mean, it's not that it's bad because lawyers, of course, their, um, their goal is to create a balance. They are more risk adverse. However, the, the thing, a- and that's something that it's, it just been since, since, uh, since always is that lawyers, a, a, a, lot of the time they write too complicated, right?

17:45It's like the writing is too complex, and the thing is like they forget... Well, we forget. We forget most, some of the times that the people that are going to be involved, that commercial relationship- That you're drafting a contract in order to build, like, the manual. What's, what's going to happen once you sign a contract in order to have a good commercial re- relationship are the people in the sales department, in the procurement department- Mm... in, in the other de- de- departments that are not lawyers. And, and of course, when you build a contract more, let, let, let's call it user-friendly or user design, when, when, where they can't understand properly what are the terms of that agreement without having to email legal team, "Hey, can you, uh, ex- ex- ex- explain to me what does this clause means?" It's, it's just not going to be efficient at all because, I mean, we have just a few lawyers working in huge companies and, and, and what we need is that the people inside the, the departments can just understand what's the, the, the contract all about and they can find those commercial terms, like, very fast without having anyone else, uh, in the, uh, just explain what does it means.

18:55And I'm, and I, and I'm sure that those in, initiatives where you can train lawyers on that business perspective since college, it's great. Because we, we never had that, those kind of training. It's just about reading case law, what happens when somebody doesn't per- perform the, uh, a- according to the, to the contractual terms, but that's it. Mm-hmm. Yeah. And you know, it's kind of funny, and not to beg again on, on the lawyers here, but- ... to me, lawyers are, are, are really competitive and they want to win. Right. Because it is all about winning a case. Um, and like you said, when it goes to case law and that type of thing. But when we're talking about business, it, it really isn't all about winning, it's about how we can mutually benefit from a relationship. And so, you know, that, that is one of the things that, that I think is fun- foundational, fundamental in establishing an agreement that works for everybody.

19:53Also, to your point, great point about, you know, this is something that is actually shared. Um, sorry, my light just went off. The documents go across, um, multiple organizations and, um, once they've been executed, so stakeholders, engineering, a lot of times companies will share with their engineers so they know what's the statement of work and some of the terms. There might be other supply chain functions that get a copy of the agreement. So it really is important that it is straightforward and comprehensive, because if it has a bunch of legalities in it, then you're gonna have people that are trying to interpret it and they may misinterpret it, and then you've got miscommunication that is actually happening. And as we're drafting these two and, and coming to an agreement with a supplier or customer, it's really important also to make sure that we've got other stakeholders that are involved. So yes, legal always does the review for certain terms and conditions that are very specific to the law department and they have a vested interest in. But there's other areas, um, insurance, risk, import, export.

21:05There's other stakeholders that should be reviewing the document, too, to make sure that it meets the needs and the requirements of the rest of the business and the business in whole. So there's a lot of opportunities, um, to make sure that the stakeholders are engaged, both before an agreement is executed, as well as after an agreement is executed. Yeah, Kim, I, I, I think that, um, you know, and something that we've learned while, while doing this podcast is there's always a lot of moving parts and, and you need to have all of those, those different, uh, parts and people and processes in place to, to make sure that, that this is functioning at a, at, at not just a high level, but, but at a granular level.

21:52Um, and, and I, I think that, you know, there's been some great takeaways here and, and we are, we are coming up on time, but I, we do have one quick question that we, we wanted to, uh, to end with. Mm-hmm. Um, a- and this is, you know, um, in your experience, organizations that are using a lot of manual processes to, uh, manage their contracts, uh, and may, might be out there starting to look for, for software applications. You know, they have those processes in place, they understand what they want to do better, um, but they wanna look at, um, a CLM tool or, or maybe something else to, to help with these processes. What, what kind of, um, tips would you be able to give to those folks that are out there starting their search for, um, a tool to help manage their contracts? Right. You know, as we've been talking through this, we've talked about the processes, we've talked about the, the people and, and now it leads to the technology. So the technology is really the enabler.

22:47And processes, foundationally. You've got to have your processes intact, aligned, and make sure they're clean. Um, and have that foundation set. People, you got to have the right people in place to make sure that they're able to understand the processes, understand the terms and conditions. And then finally, bringing in the contract lifecycle m- management solution set. So again, th- that technology really is the enabler. And you know what? It doesn't take away from the need for the people. A- and folks think, "Oh, it's just easy. We'll put it into the system and it just goes right through, and, and we don't really need people to understand the t- terms and conditions or understand what they're doing because the system does everything." Not true. Um, again, technology enables people to make it easier and make the interaction consistent, and the ability to get the data out, and the ability to do analytics.

23:49It does not take away from the necessity of actually engaging with people and negotiating an agreement. It doesn't take away from, "Oh, you, you do have to double-check some things sometimes," because it may do a spell check, but you still might have some, um, misunderstanding on some words. Um, so it doesn't take away from the need for humans and, um- The need for humans that actually understand the business and understand contracting, it just helps them to do their job more efficiently. And maybe you need fewer people doing it. Instead of a 10 people organization, maybe you need a five or a six or seven people organization. But those other folks should be looking at it from compliance and from risk and from other areas, and the opportunity to do additional work related to those contracts and how they're actually being executed. So it might be a shift in your workforce from actually performing and executing agreements to then how are they managed and looking at them from a different perspective. So technology, great.

24:59I am, uh, really passionate about contract lifecycle management solutions and again, things that look at from both that holistic view, not just one solution for your buy side and one solution for your sell side. Um, again, opportunities for integration flow up, flow down between the buy and sell, but again, it goes back to doesn't eliminate the people and the need for that human interaction, and having those, um, contracts and processes in place is really foundational because that's the data then that goes into the system. Yeah. Yeah, I couldn't agree more, Kim. And, and, uh, I think, you know, like I said, that's, that's definitely something that we've seen with, with all of our guests here is that, um, you gotta make sure that those processes are in, are in place.

25:53And, and if you are gonna look for technology, you know, you need to know what, what are you trying to, to fix exactly, because, uh, there are dozens and dozens of CLM tools out there and, um, there's a lot of great ones out there, but they all do things a little bit differently. So you really need to understand exactly what you're, you're trying to focus on, uh, you know, what processes or, or workflows or anything like that that you're trying to, to, um, to streamline a- and, and then understanding, you know, how to look at those tools. So, uh, Kim, this has been a, a fantastic conversation. Uh, if folks want to connect with you or, or learn more about anything that we chatted, you know, about today, uh, where can they, where can they find you? They can find me at, uh, kim.miller@l3harris.com and I'm happy to share. Um, also one thing to note too, um, it's really important with the CLM to have a strategy. So we talked about fixing maybe some of their current problems, but this is a long-term investment as you're looking at CLMs and CLM, um, platforms.

27:00And so really think about it from where do I wanna be in five years, in seven years, in 10 years, and not just what are the problems I'm trying to solve for today. Because that strategy and that vision is, again, key in making sure that you're selecting the right CLM for your business of the future. Yeah. Yeah, definitely finding something that you can grow with and you're not gonna outgrow in a year or two is, is, is, um, something else that, that we always talk with, uh, talk with folks about, um, to, to make sure, like you said, that they are looking down the road and, you know, e- especially with, with some of these solutions that are, have a heavier implementation, you know, you don't wanna have to go through that more than once as it can be a bit painful. But, um, yes. That's, that's great advice. So thank you, Kim. We really appreciate you coming on today. Thank you. Thanks for, thanks for chatting with us. And, uh, everyone who's listening, thanks for sitting in for another episode of Contract Heroes. Thank you. Thank you. Have a great week.