Wisdom from James Madison for Business Papers (Part 2)
April 8, 2016 - Posted by: admin - In category:
Though only 4,500 words, the U.S. Constitution contains many important details relating to the organization and operation of our government. While it has been amended 27 times in the years since first ratification, the original document has been remarkably stable and helpful over the years.
This is the second part on the topic of what insights James Madison, as Father of the Constitution, might have for you and me in our efforts to properly organize, document and run our business ventures. In the first post, we noted the brilliance of the various checks and balances established by the Constitution and considered how such things might also be used in running a business. Let me also pause to acknowledge that James Madison was just one in a multitude of brilliant individuals who deserve credit and praise for their contributions to the Constitutional Convention and all things related thereto. Even so, since we designate Mr. Madison as the “Father of the Constitution”, it is fair to use him as the symbolic head as we consider these things.
Today we note that the original document, along with the 27 ratified amendments to the Constitution, collectively provide a significant degree of detailed parameters for how our government system was to be originally established and how it is to be continually organized and implemented over time. While it may seem obvious, it is worth noting that the founding fathers did NOT scratch a few sentences, shake hands and then call it a day (with the idea that people would “do the right thing” when the time came). No, these were some of the greatest intellects ever to walk the earth and they were wise enough to know that the only hope of having a predictable and understandable foundation of organization was to take the time and effort to consider, discuss and then memorialize in writing as many things as they could reasonably formulate and agree upon at that time. In other words, they chose to err on the side of more detail rather than less. Ok, what does this have to do with you and your business? Great question.
I cannot tell you how often I encounter business owners who have invested a great deal of time and money in their business venture and who fully expect that such venture will endure for years and years to come, but who at the same time are operating with nothing more than a few handshakes and verbal “understandings.” Sometimes we find business owners who have gone a step further and they at least have a page or two of written agreements, but very often such written papers are so pithy, lacking in helpful detail and otherwise fully inadequate that they are not all that much better than nothing. What is the solution? The better approach is to consider what James Madison and his colleagues would say if they came into your headquarters and asked to review your legal papers. Chances are that Mr. Madison would tell you to take the time to document, in careful detail, the parameters of your business deals and to do just as he and the other Founders did–err on the side of more detail rather than less.
Perhaps you are about to say that you don’t have a crystal ball, you can’t think of every possible contingency or detail and you cannot predict exactly what will be needed in the future. James would not be highly sympathetic to that excuse–rather, he would remind you and me that he and his brethren had similar concerns and challenges and they did the best they could at the time and then they also provided mechanisms for future amendments, updates and changes, as needed. You and I can and should do the very same things in our business agreements–consider, discuss and document all that we can at this time (erring on the side of more details rather than less), and then leave room and a clear method for future changes, growth and amendments in the papers to correspond to such growth and changes in our business.
The wise among us learn from history–both from the mistakes of others and also from the correct actions and triumphs of others. While James Madison and his colleagues were certainly human in all respects and they made many mistakes in their lives, they got it just about perfect (all things considered) in their roles as drafters of the Constitution. You and I would do well to glean as much wisdom as possible from them.