Monthly Archives: April 2010

NDAs and 5 tips for getting them signed

When I was a pimply faced lad and just received my commission to be an Army Officer, I had my new boss, a senior Armoured Corps Officer held up to me as the example I should emulate. It wasn’t because he was a particularly great leader or a great soldier though, it was because he thought through all possible outcomes and developed strategies to cope with them.

NDAs non-Disclosure AgreementsA really good example of his style was at a training course that he went on. All attendees at the course were set a task of developing a battle plan that could either have an Infantry bias or an Armoured Corps bias. The twist in the tail was that the assessors were an old Infantry officer and an old Armoured Corps officer, but you didn’t know who you were going to get. So:

  • Some people on the course wrote a battle plan that was a compromise between the Armoured solution and the Infantry solution. They hedged their bets.
  • Some people on the course wrote a battle plan that was clearly biased to Infantry, and some to the Armoured Corps. They hoped they would get the “right” assessor.
  • My guy however wrote two complete battle plans, one for each bias. He then held them both behind his back and handed over the plan with the correct bias, when he found out who his assessor was to be.

I was reminded of this the other day when I was having a drink/discussion about the use of NDAs or Non-Disclosure Agreements with a lawyer and a merchant banker. During the course of the conversation, a number of interesting points came out around their experiences, which I thought I might share.

1. How long should NDAs last for?

In Australia we tend to say “until the information is in the public domain”, however in the USA it tends to be for a time period “3-6-12 months?”. So consider how long the information needs to remain secret for, as it becomes much easier to get it signed if its only for a short period (especially if the other party is a potential investor and may be looking at many technologies in the same area).

2. Are their layers of Information the NDAs cover?

Information can be presented in layers, and NDAs uncover the layers. So you have an abstract overview that perhaps anyone can look at. An NDA that allows deeper access, and another NDA that allows secrets to be reviewed, but needs a “lets get serious” non refundable deposit to be executed.

3. How do NDAs fit with other documentation?

A presentation that has parts blanked out is sure to whet the appetite. A handy NDA can allow your audience to then see the version of the power point without the blanked out bits.

4. How many NDAs should you have?

There is more that one type of investor, generally strategic (smart money) or cash only (dumb money), and these people will need different information before they get on board. Perhaps you are even talking to a potential investor that has investments in competitors? You need to understand, the attributes of what you have to hide plus the needs of the audience. Thinking like this means that you will end up with more than one NDA.

5. Understand each and every clause of your NDAs

In every negotiation you are likely to compromise or give things away so that you can ink the deal. The NDA is no different, perhaps to get it signed, you need to drop some clauses. You need to understand what you are prepared to run a line though before you sit at the table.

The Army Officer that was held up to me as the guy I should emulate, wasted an awful lot of time worrying about things that never came off. The upside of this was that everything he ever did was successful.

So do you just use one standard NDA that your legal guy wrote?

Making life twice as easy

Earlier this year I had Keith Ishikawa from TBM Consulting Group speak at a Churchill Club function about applying Lean Manufacturing techniques to software engineering.  Keith was one of the original engineering team for Lexus and a major player in Toyota’s Lean Manufacturing push. I was a bit concerned about Keith originally, as his Japanese accent was strong, but he turned out to be fabulous as he told plenty of hilarious anecdotes that he used to make his points.  Anyway, one of the lessons he passed on about running a lean manufacturing programme was to have two suppliers for everything as it kept everyone on their toes.

I already have a tendency to use two suppliers for most things, but I hadn’t put much thought into why.  Other than it was better to have a great commercial lawyer and a great family lawyer, rather than the same guy trying to do both jobs well.

Keith pointed out that there was quite a number of benefits to doubling up your suppliers, including:

1.    Have great suppliers, rather than just good ones
By sharing around your you services, it means you can engage the best person for the job rather than having one group do everything.

2.    Improves the Relationship
Knowing that its easy to shift your business away, your suppliers are motivated to constantly improve the relationship with you and can’t hold you to ransom.

3.   Improves the Service
As your suppliers desire to win more of your business, they will always strive to give you best price, best response times & best quality (rather than at best 2 out of the 3).

4.  Provides a backup plan

You can’t be left in the lurch by a supplier failing or discontinuing a service you always have someone warmed up and ready to take their place.

The difficulties with employing two suppliers is of course you need to manage both suppliers (double the number of lunches?) plus you need to think through how you want to split the business.

Its not the hard though with secondary services, eg:
Lawyers – Overseas Vs Local
Accountants – Company secretarial Vs Tax
Stationary – Marketing Collateral Vs office products

Doubling up parts of your manufacturing supply chain can cause headaches as you try to ensure design standards are met,  but then again tyre replacement services manage to supply more than one brand of tyres, so its not that hard.  It jsut requires thinking though exactly what you want from them.

I have also been thinking about this since my personal accountant has decided to move back to the country town he cam from.  My other accountant is now doing all my work while  I search for a replacement at my leisure.

Life is twice as easy.

5 Learnings for Clear Thinking Teams

Recently at the Churchill Club, we were honoured to have Det. Sen. Sgt. Ron Iddles as a panellist for the “Clarity of Thought” event.  Ron is the longest serving member of the Victorian Homicide squad, having been there over 20 years and investigating over 200 murders.

Ron’s everyday work life is a hell of a lot tougher than anyone in the room had ever had to deal with as it includes dealing with horrific scenes, inflammatory accusations and emotionally distraught parents and partners.  So getting his team to work together well and think clearly in highly stressful environments was something that Ron knew all about.  I thought it would be beneficial to pass on the 5 lessons he shared with us.

1. Get the Culture right
You need to develop a culture where members admit errors early & easily.   Everyone is resource constrained so less time spent on activities based in faulty logic, the better.   Learning from mistakes is also extremely valuable for a team, so ensure this occurs as part of the process and without defensiveness of members.  Your team members can’t grow if they don’t learn easily from their mistakes.

2. Depersonalise the thinking
Train your team to depersonalise themselves from the thinking by laying their ideas out visually and seeking input from others.  Diagrams, maps, charts etcetera are much better for communicating &  figuring out what’s going on in a complex area than written or verbal briefings.

3. Get the Environment Right
The environment the team works in dramatically impacts the effectiveness. eg Gray walls are really bad for creativity but nature is good for it.  If you can’t change your environment, used pictures, props and decorations to improve it.  Eg. even staring at a picture of nature can make you more creative.

4. Manage the personalities
Every team will have a variety of different personalities, as well as people with different levels of expertise, but don’t let strong wills take over.    The team is much more effective  when every team member gets challenged and must  justify their decisions or adapt their thinking.  Making this part of both your process and culture makes for a better team.

5. Make Decisions
Avoid analysis paralysis.  There is never enough information to make decisions with 100% confidence.  So don’t procrastinate about making decisions, however, make sure you can justify your decisions and record the process.   For Ron he asks himself the question “can I justify this decision at court?”.

Nothing better than cross pollination of ideas from other professions!