Don't Let Cilla Black Lead You Astray

It’s spring time, 2022. I’ve binned my suits three years before, so I’m leaning heavily on the casual side of ‘business casual’.

I’m at home in County Antrim, Norn Ireland, taking full advantage of what seems like the only long-standing upside from the pandemic: people realising just how much can be done remotely.

A client has just called me. A long-standing key supplier of one of their most profitable lines has just stopped supplying them. No reason given. No available immediate termination right in the contract. They just stopped.

Naturally, my client wanted to do something about this. “They can’t just do this, can they?”

The answer sounds obvious enough: “no, they shouldn’t be able to do this”. There’s a signed contract, after all.

But ‘should’ is an interesting, non-compelling, word. And there’s a lot more to successful business life than “what a contract says”. In fact, some things are way more important.

Like “can you actually enforce what the law says”.

In this case, there was no way to do that, even if they’d gone to court and had won (something that would have been stupidly expensive, burned a lot of internal time, caused a lot of stress & aggravation, and would still have been a gamble).

That’s because there was no money whatsoever in the legal entity that they’d entered into the supply agreement with (which, I hasten to add, was done before I started working with them!).

And if you can’t collect, everything else is worthless. Your contract is just one big legal chocolate tea pot.

So what should my client have done differently? If the contract wasn’t enough, how else should they have protected themselves?

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I look at every contract I see through one key lens: that the contract is with someone that you’re hoping to work with successfully for many, many years to come.

After all, business is a long-term game. And finding reliable, quality business partners is hard. So why on earth would you want to get into a situation where you’re having to look for new ones again & again & again?

That ‘long-term partnership’ goal drives a lot of how I build and shape what goes in a contract. But it’s also important before any “legal work” on that contract even starts.

Because if you’re hoping to work with successfully for many, many years to come, you should really want to find out as much about your business partner as you can.

Extra knowledge helps lay the foundations for you both to build a strong relationship, because the more you know, the greater the connection between you. Finding out more also enables you to double-check that each of you will work well together to build something that works long-term for both businesses.

Doing your homework makes sense. Whereas if you’re not doing some homework on the business you want to work with, you’re effectively applying what I call the “Cilla Black Approach” to your contracts.

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You know Cilla, don't you? Of course you do.

Red hair. From Liverpool. Singer of many songs (my favourite being "Alfie"). Saturday evening TV queen.

And of course, Cilla hosted Blind Date, in which she encouraged two people to get together based off nothing more than the answers to three rather random questions, and without seeing each other until there was no going back.

Funnily enough, that is not a strategy I would recommend for when it comes to your contracts.

Yet I often see deals that have been put together as soon as a headline price and basic headline terms have been found. Which is the contract equivalent of going on a blind date, at the encouragement of a Liverpudlian national treasure, on the basis of the answers to three random questions and nothing much else. The Cilla Black Approach is real and is used.

But as you’re reading this, can we all agree to reject Blind Date Contracting, and instead remember to do some homework on the businesses we want to partner with? “We can”, you say. Good.

Because there’s a lot you should look to find out, including:

• Which exact entity am I partnering with?

• Who’s bigger?

• Who’s got more cash in the bank?

• Who’s is doing the core thing that they usually do, and who (if anyone) is doing something unusual for them?

• Have any recent big events happened to their business? And to yours?

• What are their growth ambitions? How do they compare to yours?

• Is there any seasonality in their business, or are there any specific dates that are particularly important to them?

The answers to those questions (and anything else you think might be relevant) will give you confidence in your choice of partner, and their fit & alignment with you. They will help you feel more certain that the partnership between you will stand the test of the time.  And they’ll also tell you whether you should even think for one minute about going into a formal legal battle with that business (not that you’d do that anyway, given that you’re committed to putting your relationship first).

There’s no need for that homework to feel like a chore, though. Because thankfully, with the resources available on the internet and AI’s ability to carry out research, it’s never been easier to get answers to those questions.

In fact, we even have a free prompt that you can just plug into your GPT of choice to help you research those things and get a good 360° read on your business partner. As GPTs work off the adage “slop in, slop out”, it’s a lengthy detailed prompt: too long to include in this newsletter. But you’ll find it here.

Try it, and let me know how you get on.

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It’s always tempting to crash on ahead as soon as it looks like you’ve found someone who can help you. But do take the time to understand the context around the contract: there’s much untapped value in the context, particular about your proposed business partner. Whereas ignorance will bring you nothing.

Next week, we’ll dive into another easily forgotten part of the contracting process. Till then, if you’ve any questions, comments or concerns, just hit reply and let’s chat them through.

Till then, stay collaborative.

Andrew

PS: Don’t forget, you can still have a play with ‘AI Andrew’: he/it can help you work out the best way forward any time a legal thing lands on your desk.