Fixing the Contract Bottleneck

If there is one universal complaint echoing through corporate hallways, it is that procurement takes too long. When the C-suite hears that stakeholders are frustrated, the root cause almost always points back to the same two bottlenecks: the contract process and the risk process.  

In Episode 71 of Proc and Roll, Conrad, Zach, and Natasha dive deep into why enterprise cycle times are broken and how leaders can intentionally redesign their contracting workflows to remove friction without exposing the business to unnecessary danger.  

Stop Over-Contracting and "Follow the Money"

A massive driver of procurement delays is the instinct to force an ironclad contract for every single purchase. Natasha challenges this approach directly: don’t do a contract when you don’t need a contract.  

Instead, procurement teams need to establish a clear taxonomy and segment their spend. By evaluating purchases on a two-dimensional matrix of financial spend and actual business risk, you can route low-risk, low-dollar buys strictly through purchase orders and reserve heavy contracting processes for engagements that actually warrant the effort.  

The Redundant Approval Trap

One of the fastest ways to make procurement hated within an organization is to sacrifice user-friendliness for the illusion of compliance. The hosts highlight the absurdity of forcing stakeholders to get separate approvals for a budget, a purchase requisition, a contract, and finally a purchase order—often passing the exact same documents through the exact same approvers.  

Worse, many of these approvers are simply pushing a button without reading the details. To cut cycle times, organizations must consolidate these steps, eliminate duplicate approval gates, and build a process that aligns with the stakeholder's best interest.  

Partnering with Legal is Non-Negotiable

You cannot transform the contracting process in a vacuum. A successful redesign requires a deep, progressive partnership with your Legal department.  

When Legal and Procurement are aligned, you can establish powerful bypass rules. Natasha shares an example of working with Legal to pre-program certain spend categories as low-risk—allowing Procurement to execute agreements up to $1 million without Legal review, provided there was no IP transfer, data privacy risk, or major alterations to liability clauses. If your relationship with Legal is fractured, fixing it is the single most important step to improving your cycle times.  

Ending "Risk Theater"

A highly complex, cumbersome process rarely stops a true bad actor, as they will simply bypass procurement entirely. Instead, overly rigid rules often result in what Conrad describes as "risk theater"—a performance of box-checking that frustrates employees but does little to actually protect the business. Zach estimates that only a single-digit percentage of companies have a risk and contracting process that functions well and genuinely mitigates risk.  

To move away from risk theater, organizations must empower requesters with clear red lines, establish service-level agreements (SLAs) for Legal turnarounds, and build a culture of accountability where leaders are trusted to make decisions but face real consequences if they act recklessly.  

Transcript: Proc-N-Roll | Fixing the Contract Bottleneck

Conrad: Hello, everybody, and welcome back to Proc and Roll, your guide to practical procurement. Today we come to you from all around the world with Zach in London and Natasha, founder and CPO extraordinaire. Last time we met, we talked about one of the biggest questions on everybody's mind: what is up with this cycle time? Procurement teams are hearing from the C-suite that stakeholders think procurement is broken and too slow. The biggest bottlenecks taking the most time are the contract process and the risk process. What would you recommend from a transformation perspective to make things faster?  

Zach: Contracting runs alongside risk, because if you flag something in risk, it usually needs to find its way into your contract. First, make sure no one is asking for a contract for something that already exists. Then, have clear, defined procedures. For NDAs, use a standard mutual template and set up a dedicated mailbox or offshore service to advise on any changes. For new buys, use your company paper and have your red lines ready to go regarding what terms you can and cannot accept. Also, look carefully at the approvals process—I see so many duplicate approvals where the same person signs off on the budget, contract, and risk. Finally, use available tools like Microsoft Word with track changes rather than forcing suppliers to log into a clunky system to modify things.  

Conrad: I want to go back to company templates. When I got to Adobe, the design of the legal documents required a contract every time there was a purchase order or a release. It didn't lend itself to transacting without a contract process, leading to huge cycle times. The best advice here is to keep it simple. There is a tendency in risk to want everything perfectly buttoned up with eight documents against every transaction, but you have to step back and ask: under what conditions do you actually need a contract?  

Natasha: Follow the money. Don't do contracts when you don't need to do contracts. I've seen 13 companies up close, and every single one complained about procurement taking too much time. Why? Because we issue too many contracts, and attorneys do not believe in the payment terms on the back of POs because they worry about the battle of the forms. Procurement leadership needs to understand taxonomy, create a two-dimensional metric of risk and spend, and partner closely with Legal to determine which categories can be exempt. I once had an amazing partnership with Legal where procurement didn't even need to engage them for contracts under a million dollars, provided there was no IP involved, no product ownership, and no redlining of major liability clauses.  

Zach: This is exactly what I do for clients in intake and orchestration. Look at your taxonomies—if the value is acceptable and it isn't risky, go ahead and use a PO. The problem is, say someone wants to buy a cheap piece of software for $10,000. The second your process asks, "Is this going to have access to our systems?" it triggers a massive risk review. Requesters are often risk-averse, so if they are unsure, they tick "yes" to everything, triggering ad nauseam reviews. We need to empower people and trust the business owner to make these decisions.  

Conrad: We are always worried that smart requesters are going to game the system. Once they realize clicking certain boxes triggers a three-week delay, suddenly they claim the tool doesn't touch data. But you can't solve this without a good legal partner. When I got to Adobe, the attorneys basically told us they didn't trust us and thought we were just pencil pushers. We had to turn that reputation around to get their collaboration.  

Natasha: I actually disagree with Zach here. I don't find stakeholders to be risk-averse; they often select suppliers just because they feel comfortable with them, and they are willing to accept terrible terms—like a $1 million limitation of liability when Legal wants $10 million—just to get the goods delivered. Letting stakeholders decide legal terms is wrong. Furthermore, the reason people hate the legal process is redundant approvals. We make people approve the budget, then the PR, then the contract, then the PO, and then the savings. User-friendliness always gets discounted for the benefit of compliance. If every day people have to go through your cumbersome and clunky processes, you, procurement person, will be hated.  

Zach: I distinguish between normal people who want to get things done and bad actors. The best process in the world won't stop a bad actor, because they will simply bypass procurement entirely and ink the paper themselves. That is a bigger risk than giving people agency. You must have a culture with real consequences—like at my firm, partners can sign off on things, but there are serious consequences if they get it wrong.  

Conrad: I find that most approvers don't even want to do the approvals. I was at a company where the Head of Legal approved a contract in the new CLM, and when the relationship went sour later, they asked, "Who approved this in the first place?" It was painfully hilarious. You have to question the status quo. How many companies do you think actually have an intentionally designed process that mitigates risk?  

Zach: Ten percent. I'd put it in a single digit.  

Conrad: Exactly. Eloise talked about this in her book: it's risk theater. We are going through a dance just because someone told us to do it this way, and people are just pushing buttons without understanding why.  

Natasha: The fact that enterprises are sued as rarely as they are speaks volumes to the integrity and commitment of the suppliers, not necessarily the enterprise's process.  

Conrad: Suppliers just want to get paid. Getting into a punching match with a customer is unproductive, so they work hard to resolve problems without legal disputes. Let's wrap up. What is the final walkaway point for improving cycle time?  

Zach: Three things: Playbooks with templates and red lines, SLAs so Legal turns things around quickly, and a culture of accountability driven from the top down to stop bad actors.  

Natasha: Follow the money. Look at the process through the eyes of the stakeholders and take the friction out of it so people don't try to bypass it.  

Conrad: I'll be the relationship guy today: if you don't have a good relationship with Legal, fixing that is the most powerful thing you can do. Without them side by side, you are just spinning your wheels. Thanks for joining us again for another great episode of Proc and Roll.  

This transcript has been edited for clarity while maintaining all substantive content