Some still believe that an individual’s word is his/her bond. Or that the Marquess of Queensberry Rules still apply. Sadly, for many, these statements are outdated.
Blockchain is a, “decentralized digital ledger that securely stores records across a network of computers in a way that is transparent, immutable, and resistant to tampering.” This is the reason it is famous for cryptocurrencies and lesser known but as important as the backbone of secure Supply Chain Management and invoicing/payment systems. In this era of complex global business relationships with millions if not billions of transaction each year, the blockchain SCM is essential.
And Yet!
Not only are the well known and often comical scams running strong, some executives still seek to take advantage of the unwary and naive. Guess both types of thieves will always be with us. In addition to a lifetime of dealing with those who seek success at the expense of others, here are two recent use cases taken from the last 18 months, of which this Blogger has personal knowledge.
The Handshake
A small supplier of leased equipment to heavy industry ‘cut’ a deal with another small firm to lease equipment to a much larger organization of which the small firm had a business relationship. In this case contract negotiations broke down but the equipment supplier shipped the equipment on a handshake and assurances the ‘paper’ was not necessary.
As of this writing, there is a great deal of animosity and non-payment. Likely, legal action will be taken to the detriment of both these small firms.
The Contract Did Not Address
In another ongoing situation, a one page agreement provided by the sales person of a small firm was accepted by the small buying organization. No provisions we provided for accidents or incidents while the equipment was in the possession of the seller, but making changes to the total solution by a 3rd party who was partially directed by an engineer representing the buyer.
A resulting fire rendered the equipment unsalvageable and the finger pointing commenced. This was compounded, as the buyer’s engineer kept few if any notes and most communication was verbal. The who will pay for the damage is still uncertain, as are next steps.
Trust But Verify
Chivalry is not defined as it was in the day of the knights and I think rightfully so, as we are not taking our swords to the field of battle against those believed to have wronged us.
Contracts need not be the lengthy small print most think they are. A contract must start with an offer (proposal) and its acceptance. The do not need to be in writing but usually are. They must be legal and have consideration (value exchange). Finally, the contract is between ‘Capable Parties,’ those qualified to enter the agreement. The written agreement typically has standard clauses or provisions including but not limited to assignments, arbitration, amendments, modification, notices, choice of law, force majeure and more.
An average written contract would have saved all parties in the two use cases from a lot of personal and organizational grief.
Finally, most larger organizations have put in place Operations Management Systems. They go by a number of names but their purpose is to assure the contract is adhered too, especially for a complex project as well as document performance for the protection of all involved.
Our firm has been directly active in this field for about 15 years but working in the area for over 50 years. We have developed our software solution Smart OpEx that enables this business model for the benefit of all parties involved. The proverbial “He said–She said,” goes away. This has been addresses previously and more information is available on our website.
Chivalry May Not Be Dead, but Consider Handshake Management as Expired.
How will you manage even small business relationships going forward?
For More Information
Please note, RRI does not endorse or advocate the links to any third-party materials herein. They are provided for education and entertainment only.
See our Economic Value Proposition Matrix® (EVPM) for additional information and a free version to build your own EVPM.
The author’s credentials in this field are available on his LinkedIn page. Moreover, Dr. Shemwell is a coauthor of the just published book, “Smart Manufacturing: Integrating Transformational Technologies for Competitiveness and Sustainability.” His focus is on Operational Technologies.
“People fail to get along because they fear each other; they fear each other because they don’t know each other; they don’t know each other because they have not communicated with each other.” (Martin Luther King speech at Cornell College, 1962). For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game. You can contact this author as well.
For more details regarding climate change models, check out Bjorn Lomborg ands his latest book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.
Regarding the economics of Climate Change, check out our blog, Crippling Green.
For those start-up firms addressing energy (including renewables) challenges, the author can put you in touch with Global Energy Mentors which provide no-cost mentoring services from energy experts. If interested, check it out and give me a shout.