I was talking with a potential vendor the other day and expressed that I appreciated his being open and honest in his communications; essentially saying “I like the way you do business”. His response was interesting: “You know, to me that’s the only way, but isn’t it sad that it’s not the norm?” I agreed; the norm has certainly moved to don’t trust, until proven otherwise, rather than the other way. I (unfortunately for me on occasion) only know the other; I just naturally trust people, until proven otherwise.
But (and a good “but”), in the long run, that has proven much more positive for me in business and personally, than I believe being “mistrustful” would have been. This is especially true as an entrepreneur; when it’s not just me on the hook, but the success of my business (and my employees) hinge on my behavior and my being able to “play nice” with other businesses, etc.
This is not better illustrated than the beginnings of MOS, when Rajeev called me with the idea. He called me because (he says) he trusted me, and liked the way I did business. Rajeev obviously agrees with this style of doing business; and it has proven a great partnership.
So, anyway, the exchange with the vendor started me thinking a little about trust, ethics, and then the handshake. We are all well aware of our parents (well maybe not my grandkids) talking of making deals with a handshake. “My word is my bond”, etc. Things have changed, haven’t they?
Googling “Whatever happened to the handshake” was interesting. I found references to politics (trust.yeah right), “manliness”, selling a tractor, how to do a good interview, “what is a good handshake”, and much more. There was/is of course a lot about the handshake vs. the written contract.
One thing I didn’t see a lot on, that has significant applicability to the way MOS does business, as well as all companies who utilize digital technology and the internet extensively to do business; is the lack of personal contact that occurs a lot these days in doing business.? We’ve all heard a version of this:? A strong handshake coupled with eye contact and a proper greeting will create an initial positive impression.? And we still deal with people who prefer to jump on a plane and “make eye contact” with prospects and/or clients.
However, there is simply not that opportunity in many cases, and therefore, we have to develop trust in some other way. We use contracts at MOS, but try to use the KISS principle. I am one who believes a contract is “just a piece of paper”; and believes that the subjective part of doing business in an ethical manner is still very critical. See our values for more detail:
So, in adding “ethics” to my research, I also found a lot, and have chosen to quote from two sources. “Lauren Bloom’s Blog”; http://bit.ly/9QVs4G discussed this issue:
“My clients sometimes give a sigh for the good old days when business was done on a handshake. With due respect, I’m not sure those good old days were especially good from a business ethics standpoint. if you can?t work with someone from a position of mutual trust and respect, you really shouldn’t work with them at all, even if there’s a lot of money on the table. At the same time, even the best-intentioned people can have misunderstandings and failures to communicate, and handshake deals offer lots of opportunities for both. Without a written summary of what’s going to happen, it’s very easy for two people to talk right past each other, not discovering the differences in their expectations until something goes wrong.”
Ok, there is a simple presentation of the ethics of the handshake and the wisdom in the contract. I think it states my philosophy that the contract is “just a piece of paper” in another way, as the “mutual trust and respect” must still be there. However, the protection of the contract is still a very wise choice.
Not to minimize the wise advice of my lawyer friends, but one cannot anticipate all the contingencies on a written document; therefore, the ethics remain as the key. And ethics are subjective; and relative to the people involved; back to trust and respect.
I found an interesting paper, written in 2006 by an MBA student from University of Minnesota Duluth. I can’t give him/her credit as the name was not there; but well done, and reminded me of the “case study” days in my program. The paper was “Contracts versus the old-fashioned Handshake” See http://bit.ly/9tbCNz.
What I felt added to my treatise; history of the handshake which began as a means for two people to assure one another that neither was carrying a weapon (Hartline). Over the years, it has evolved into a contractual symbol for an oral agreement. Classical Greeks figured that the right hand was connected to the heart, and that denoted trust, according to Boyles a Men’s Health Magazine editor:
- A handshake deal is made man to man. One guy looks another guy right in the eye and says, Deal. Then they shake. That?s because in business, ultimately, every transaction is a one-to-one handshake.
- It’s flexible. A handshake signifies an agreement on major issues, but can be shifted to suit circumstances, without much stress.
- It’s a matter of principle. A handshake is the gestured equivalent of a promise. Nobody can do business with a liar, so standing up and making a promise is an assertion of what you believe — it’s about the value of your word as a man.
- Reveal all. If hidden reports, secret side deals, or huge liabilities emerge after the handshake, then there’s trouble.
- Be willing to trust. If you assume you’re the only one working toward that goal in complete good faith, then you aren’t negotiating in good faith. You have to assume that the other guy is just as interested in working out an equitable agreement as you are.
- Know what your word is worth. Never promise more than you can deliver.
- Be pleased the other guy got a good deal. Agreements work only if they work both ways.
(Yeah, a little sexist (well a lot) but that can be “flexible”.)
This student also described a (paraphrased) $2M handshake deal that went sour, and the courts essentially threw it out, because nothing was in writing; except an appellate court that allowed the “breach of warranty”.? It took 8 years, but a jury awarded $135M. Then to quote the students conclusion: “Now that is a culture with high ethics!”
Perfect! A good company, in my opinion, will have a “culture with high ethics”. This culture perhaps is (or should be) rooted in the “old fashioned handshake”. Without offering quotes, I did see several references to the “handshake” between businesses; referring to the totality of the “deal”; the relationship, etc., which would include the contract, the understanding between management, the willingness to be flexible, the communications, and more. I like this. We will be discussing including this as a distinct part of our philosophy.
So, is the handshake gone? NO! Is ethics important? YES! Are they related? ABSOLUTELY! In fact, my take away is including the “old fashioned handshake” as part of our relationships; even if that handshake is virtual.