My word is my word

Once upon a time there was a common expression: ‘an Englishman’s word is his bond’, which basically meant that you could trust an Englishman. His word was his guarantee. I'm sure that this statement must have fooled many a foreigner but this week my wife and I witnessed a powerful example of honesty in business, not from an Englishman but from two people in our home town in Belgium.

We had agreed to a purchase at well below the asking price. Later on, after the contract was signed, we learned that another bidder had offered much more than us but the seller had instructed his agent not to accept it because he had already given his word on our offer.  What made this incident so much more powerful was the fact that the seller had not given his word to us directly but only to his agent. Both he and the agent would have financially gained by breaking what was only a verbal agreement. To them their sense of dignity and personal reputation was worth more than the potential financial gains on a one off deal.

Sadly, I can remember many much less happy outcomes. I don’t know how many times I have heard the words ‘it’s only business, you must not take it so personally…’ The pain is worst when they are spoken by someone you have trusted, only to find that they have very deliberately ripped you off. 

I heard an uplifting story recently about the rock group ‘Joy Division’. Apparently when they were starting out they met a DJ called Rob Gretton. Gretton was so impressed with the group that he asked if he could be their manager.  The fit seemed right and so the band agreed.  When they asked Gretton for a contract, he apparently said “How about us simply agreeing to the following: no written contract, when I get fed up with you – I leave, when you get fed up with me – you kick me out?”  Call me naive but wouldn’t it be nice if this approach could become the norm?

My business is inundated with contractual agreements and ‘statements of work’. Sometimes it seems there is more discussion on the contract than on the content of the assignment itself. You might think that it is the fault of lawyers but in reality it is more to do with professional liability insurance companies and their insistence that we keep to our carefully constructed contracts. I wonder what it would take to persuade them to accept Rob Gretton’s approach to business?

I discussed this topic with my lawyer once and he revealed to me that in his practice they had very few, if any, contractual agreements between the partners of his firm; that decisions are taken in meetings and it is only the minutes that capture the agreements – even including, the transfer of shares! 

Have a good week,

Harley