Dr. Weeks’ Comment: Are you a person of your word? Do you honor a written contact more than the handshake of a person you respect? Read about successful entrepreneurs who are people of their word and do not sign contracts or swear oaths.
From The Bastard’s a Genius The Robert Clifford Story by Alastair Mant
Chapter 35
It’s not what you do; It’s the way you do it
By 2009, a series of research studies revealed that whenever a big firm relocated its basic manufacturing to another country, the requirement for manufacturing agility and versatility demanded the creation of a kind of information conduit between the headquarters in the manufacturing sites -a sort of evolutionary feedback loop. Increasingly, (and as the researchers demonstrated, inevitably) the locus of invention shifted to the manufacturing site. All the patents in the world could not prevent that transfer of essential know-how and cleverness. In other words making things makes you clever. As the Nobel laureate chemist Sir Harry Kroto said ”˜Nobody learns things without actually doing things”; So it’s not surprising that Incat itself started to attract research attention. It was the subject of another learned treatise by Australian academics entitled “An unconventional approach to intellectual property protection: the case of an Australian firm transferring shipbuilding technologies to China”.
This research also demonstrated that Clifford’s difficulties with formal contracting (especially with the labyrinthine complexities of US military) were compensated for by his facility for dealing informally with Asian businessmen. The eminent scholar Charles Hamdon Turner has written extensively about the problems western businessmen encounter when they deal with the Japanese and the Chinese, especially when circumstances surrounding contracts change. Harvard business school approach is generally to stick slavishly to the legalistic wording of the contract, even if doing so may destroy both businesses. Asian businesses generally value relationships based on trust more highly than the letter of the law. If there is an important change in external circumstances, the Asian businessman is far more likely to accept or to initiate a modification to the contract. He does this because the idea of partnership means more to him and squeezing contractors till the pips squeak.
Here again Clifford was ahead of the game. Throughout the 1980s, Incat managed a licensing relationship with the AFAI Corporation of Hong Kong for the production of the K class fast ferry. This matured into a joint venture in the 1990s. Speaking of the original contract, the chairman of AFAI remarked “It was basically a gentleman’s agreement. There was a licensing contract but we never signed… you can never get the words right”. The unconventional logic of a FAI’s managing director also made perfect sense to Robert Clifford: “This is where you need to approach a different thinking. Often if you want to honor in agreement you will not sign the contract. The person who would not honor the contract probably would sign it.”
“Although the actual process of drafting the unsigned agreement may have facilitated the development of trust and understanding, the long term relationship between in cat and a FAI appears to have been pivotal to the operations of the venture.”
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And from Shakespeare’s Julius Caesar on the problem with swearing an oath. Brutus has been recruited to the side of freedom and agrees to kill his friend Caesar the next day. He is asked to swear an oath and he refuses. Once you read these words of Shakespeare, you will see how ethically bankrupt is our American litigious society where the word of a man is subservient to a contract.
BRUTUS
Give me your hands all over, one by one.
CASSIUS
And let us swear our resolution.
BRUTUS
No, not an oath: if not the face of men,
The sufferance of our souls, the time’s abuse,–
If these be motives weak, break off betimes,
And every man hence to his idle bed;
So let high-sighted tyranny range on,
Till each man drop by lottery. But if these,
As I am sure they do, bear fire enough
To kindle cowards and to steel with valour
The melting spirits of women, then, countrymen,
What need we any spur but our own cause,
To prick us to redress? what other bond
Than secret Romans, that have spoke the word,
And will not palter? and what other oath
Than honesty to honesty engaged,
That this shall be, or we will fall for it?
Swear priests and cowards and men cautelous,
Old feeble carrions and such suffering souls
That welcome wrongs; unto bad causes swear
Such creatures as men doubt; but do not stain
The even virtue of our enterprise,
Nor the insuppressive mettle of our spirits,
To think that or our cause or our performance
Did need an oath; when every drop of blood
That every Roman bears, and nobly bears,
Is guilty of a several bastardy,
If he do break the smallest particle
Of any promise that hath pass’d from him.