Contracts and Fast Food

burgerI love a good home cooked meal. Fresh ingredients and loosely followed recipes mean that no two meals are ever identical. Flavors, textures and intensities always vary. Fast food is the opposite – any Big Mac that you order anywhere in the world will be virtually identical. You always know exactly what you’re going to get. And Hilton (Conrad rather than his great-granddaughter Paris) applied the same principal to his chain of hotels.

What’s this got to do with contracts? Contracts should be more like fast food than home cooking. You’re striving for consistency, quality and repeatability – uncontrolled variation from agreement to agreement is undesirable as it inevitably exposes risk.

These ideas are articulated in George Ritzer’s book, “The McDonaldization of Society.” Ritzer’s premise is that society is becoming more and more rationalized. The four essential components of McDonaldization apply equally to what we strive to achieve with our contracts:

Efficiency – the optimal way to get the job done. For fast food chains this is getting customers from hungry to feeling satisfied as rapidly as possible and then moving them on. For contracts, efficiency means minimizing draft, negotiation and approval times.

Quantification – knowing how long things take and how much they cost. It’s hard to improve your processes without something measurable. Fast food chains know exactly how long every step in their processes takes – usually to the second. Every step in the contract life-cycle needs to be understood and quantified in order to improve and rate its efficiency.

Control – having strong, well established processes and using technology over manual labor wherever and whenever possible. There is no place for originality or creativity.

Predictability – achieving the same quality product every single time. Automation facilitates predictability both for fast food and contract production.

So how do your contracts compare to fast food? Are your agreements always consistent and up to date or are they more like a homemade souffle – sometimes amazing but sometimes a flop?

This post was authored by Exari CTO, Justin Lipton.

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