Yes, those are the most dreaded words in any relationship: “Honey, we need to talk”.
You sense trouble.
And they are not limited to romantic relationships. They also seem to apply to business.
At least that’s how Michael, a business partner of mine, let me know a few days ago.
Apparently I had conveyed that feeling to him in our last conversation.
Without the “Honey”, of course.
We are closing a partnership agreement and we are at the critical point of drafting and signing our partnership agreement.
And that moment when we have to transform what we have discussed more or less informally into a contract is beyond my strength.
It is the moment when I turn into a kind of fussy monster who has to reread and revise word by word the document we are going to have to sign.
It’s like the point of no return where Bruce Banner becomes the Incredible Hulk.
There is no turning back.
During the conversations beforehand it’s all cordial, goodwill and a relationship focused on building and moving the project forward.
But when we see that written down in the form of commitments, rights and obligations, trade-offs and penalties… things change.
These are standard documents, which have gone through thousands of users and have been drafted and reviewed by legal teams that take into account all existing regulations.
Yes. I know. That’s no guarantee of anything.
But in a document tailor-made by us, the people involved, it’s a different matter.
It doesn’t matter if it’s a confidentiality agreement like the one I propose to any client so that they can talk in complete peace about their super-secret project.
Or, as in this case, a long-term collaboration agreement on the launch of something new.
With all the unknowns that “something new” always has.
It is important to make clear, as early as possible in a relationship, who is going to do what and when.
What each partner will bring to the relationship.
What are the objectives and deadlines that will be pursued and which, if not achieved, will lead to the cancellation of the project.
The compensation that each will receive for their work.
On what basis the results will be measured.
Everything must be expressed in a clear and unambiguous way.
Well, as clear and unambiguous as we can afford in an environment of uncertainty as a new project always is.
This is the first blocking point: when the document is expressed in ambiguous terms, alarm bells start ringing in my head.
What does 1000 units sold per month in the first year mean?
A minimum of 1,000 units each of the 12 months?
1000 units in month 12?
12000 units sold in total during the 12 months?
It is not the same thing.
But, that is not the most complex thing.
When someone sees a written text that does not correspond to expectations, something creaks somewhere in the back of their mind.
And, once detected, the solution is simple.
You simply revise, speak and write more clearly.
The biggest problem is what is not written in the document.
What things can happen that are not in the agreement?
For that there are no alarms and no whistleblowers.
This is an infinite space to explore. A meteorite falls on our heads. One of the partners wins the lottery. A competitor wants to buy the project.
What if things go worse than planned?
What if things go much better than we now think they will?
It is very easy for these scenarios not to even cross our minds.
And that can mean problems in the future.
It is impossible to contemplate all possibilities, but it is very useful to do the exercise of considering what, even if improbable, may force us to rethink the situation.
Ultimately, these agreements are important.
It is very common to see teams where partners reach a point of disagreement after months or years of working together and without ever having written down what their collaboration was going to be like.
And when the problem arises, people are usually not very rational. No one remembers what they are not interested in and everyone sees only what is being done to them at that precise moment.
And that usually ends badly.
If only as an exercise in introspection, it is important to spend time building those agreements as soon as possible.
It helps to clarify expectations, to question whether everyone has clear responsibilities and that there are no responsibilities that belong to no one.
That alone makes it worthwhile to create these agreements.
And then, once the final document is closed and signed, we know where we stand.
It is time to put the agreement in a drawer and get down to work.