Call me old fashioned but when it comes to business relationships I believe that a handshake is worth more than a signature on a page. See the issue is this: those people who are worth doing business with will stand by doing the right things for the right reasons in good times and bad. You can’t write that type of goodwill into a contract. People either have it or they don’t.
Two incidents have stood out for me in the past two weeks which have shown me exactly how important that principle is. The first is contract dealings I have had involving a fairly large IT consulting firm. In this first case a gentleman’s agreement to waive a non-solicitation / non-compete clause. This quid pro quo arrangement between three companies was fine and dandy until the rubber met the road and an actual solicitation was issued stemming from a common belief that this arrangement would be honoured.
The upshot? Threatened legal action and a state of posturing by all concerned. One company trying to bully everyone else. One company turned yellow in doing the right thing for the right reasons. And one company refusing to be bullied. I don’t blame the company in the middle of all of this. Why threaten several tens of millions of dollars in annual business over a single contract worth less than 0.5% of all business being done. But it is for those very reasons that if you can’t be trusted to uphold your word – if your handshake is not worth the same as a signed contract – then what is the point of doing business.
Its not a question really because as much as everyone talks about integrity – integrity is very much a triple edged sword. It depends quite often on our own point of view and how we see the world. Or at least how we would like other people to see it. Who is right is not a question for lawyers or mediators or intermediaries. It is a balancing act of trying to find an equilibrium. Ever tried to find balance in a room with an 800lb gorilla? You need one heck of a long lever.
It is sort of like trying to negotiate with a drunk to get them off booze. They are either willing to do it or not. In the meantime you are told time and time again “tomorrow – if you just wait until tomorrow I’ll get better and then we can all be happy”. How many tomorrows do you wait for it before realising that drunk in the corner isn’t going to change his/her ways until they are left with no other alternatives? No way out – no other way to turn. 10 tomorrows? 50? 100? 500??
Fight or flight. Eventually we all need to face those realities. Bit by bit you compromise (or not) to maintain a relationship doomed to failure (or not). It is at these times you realize exactly who is worth that hand being extended and who isn’t. Handshakes are great when times are good. Its in those times when times aren’t good, or something’s changed, or a fundamental assumption was proven wrong that you find out if people are willing to go the distance. Not because its necessarily in the best interest of their company or firm but because its the right thing to do.
When you have an 800lb gorilla at the table though that can be hard to do sometimes. So at some point though you need to figure out whether you have a backbone or not. Are you willing to stand up for what is right and not be forced to give up ground once you’ve crossed that personal line in the sand you set for yourself.
Me – I crossed that line last week and truthfully I feel like the weight of the world was taken off my shoulders as soon as I did. There was always this sense of “oh my god – what am I going to be asked to give up this time” and that feeling is now gone. Some people would have taken a bad compromise and counted their blessings. Some would have turned tail and run for the hills. Me? When I’ve reach my fill I fight! And on the important things I will fight all the way to the finish line. Because what is right, and moral, and just will always win out over those people who choose to be that 800lb gorilla bullying everyone else in the schoolyard.
That isn’t to say that there isn’t room to be humbled in realizing that sometimes those handshakes come at the cost of finding out you don’t know everything. I found it funny in a way that this second example came right on the heels of the first. A misrepresentation of what you would think would be “common sense”.
In this second example, a misunderstanding between a sub-contractor and myself ensued owing to differences of experience. See in my world, sub-contractors do not discuss invoices with the client in anyway shape or form. The primary contractor takes the lead and all subsequent procurements flow through the prime contractor. The sub-contracting firm I had arranged to sub out work to however was use to notifying the end client once the prime was about to be billed for a completed unit of work.
As you can see two vastly different models and one that we unfortunately didn’t discuss in advance. You can imagine my horror when I saw what I took to be an infringement on our client relationship. Granted there was a bit more to it than that but the point of the matter is that once an opportunity arose to talk through the situation and the rational behind what was done and why, the situation became easily resolvable. We each had a better understanding of the differences that we took to deem as “common sense” and our relationship today is stronger by far for the experience.
Beyond this however was another issue at play. We valued the total contract drastically under what the work actually took in order to complete. There was no signed contract. There was no memorandum of understanding. There was simply a gentleman’s agreement that we would each do the project for a predetermined amount.
Here was a situation that could have turned truly ugly with lesser people. I don’t mean that in a condescending way. But consider that in this case you have three partners who are willing to honour their agreements based on a handshake, mutual trust, and an ethic that says “I am good to my word”.
I would much rather deal with a single firm that is exemplary of the second example than a hundred firms that are only concerned with the bottom line. When push comes to shove you know exactly where you stand with those that live by the palm and not by the pen. It’s a lesson that those 800lb gorillas have lost in their quest to be the most dominant player on the block. Its how communities are built – through the building of bridges rather than taxing them. And it is how I would much rather conduct my affairs rather than having to second guess every possible scenario, injury, or slight and committing it to paper. Contracts can be manipulated – handshakes backed by action show trust. I don’t know about you but I much prefer my world to that of the 800lb gorilla.