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The Gidget Man and the Business Master

or The Magic of Mutual Respect and Trust

Frank Muller P,E., Esq.

Richard A. Coughlin P.E., MBA

Once upon a time not so very long ago, there was a man who loved to make "gidgets". So great was his passion for his work, he put all of his efforts and expertise into making gidgets of the highest quality and the results of his efforts were very obvious. In fact, he produced gidgets of such quality that he soon established a reputation as the best producer of gidgets in the area and people came from all over to purchase his products.

The gidget man was so happy.... The more gidgets he made, the more people wanted to buy them and he soon found that he had to hire lots of helpers to meet the demand. He was also making a lot of money which was nice because he had a young son and it was always his dream to send him to business school (something the gidget man had never been able to do for himself)

As sales increased, the gidget man found that he needed more space in which to produce his gidgets and, because his needs were unique he also felt that he should build a new building on land that he owned adjacent to his small shop.

So he called his friendly architect (because everyone knows that architects are good at design and that stuff) and told him what he needed. The friendly architect in turn prepared contract documents and gave them to friendly contractors for pricing (because everyone knows that contractors are good at pricing and that stuff). After receiving the prices, the architect and the owner selected a contractor to work with and the owner went back to making gidgets while the architect and contractor put together his building and every one was very very happy.

As the years passed, the gidget man's business continued to grow and he added building after building for his business, which meant that the architect and contractor continued to grow as well. It also meant that the gidget man could send his son to business school, which he did. Life could not have been better.

Then one day the gidget man's son returned from business school with a sheet of paper that certified his attendance for four years and suggested that he had learned something in that time.

Upon his arrival the son immediately approached his father with recommendations as to how the business might be improved. The son called it "line item" management.

"Father, said the son, Do you realize that you have no way of knowing that you are getting the absolute best deal on the buildings you have added over the years?"

The father responded " I manufacture gidgets, not buildings. That's why I use my friendly architect and friendly builder to handle such matters. It is also the reason I was able to send you to business school and make you so smart."

"I am truly grateful father, I am here to apply the "line item" techniques that I learned in management theory 101 and will make you even more money" said the son.

Now because the gidget man loved his son, he decided to let him try these new found techniques that he was so proud of:

First the son cut the architects fee from five percent to four percent, which according to the "line item" technique represented a twenty percent reduction (but in reality was less than one percent of the building cost).

Then the son invited lots and lots of contractors to bid on the  new building thinking that competition would lower cost (caveat emptor).

Now because the architect was getting less money for design, he told the son that the contract documents would not be as complete as on previous projects but the son was not concerned because he had heard a lecture on "errors and omissions" at business school and knew just what to do if problems arose on the job.

He was also aware that the contractors were bidding on less than complete documents so he was sure to add clauses in the contract that put as much of the risk on the architect and contractor as they could bear (and then some).

Soon after the contract was awarded and the work started the gidget man noticed that the people on the project were not quite as happy or productive as the people on the other buildings he had built.

He also noticed that he was receiving a lot more mail concerning this building than he had on other projects and that most of the mail was rather nasty with the architect and contractor and his son blaming each other for problems on the job. The gidget man was not happy with these letters as reading them took a lot of time away from his gidget making. But he loved his son and hoped he would straighten things out.

Unfortunately, things got worse. The architect and the contractor and the son spent so much time writing letters to each other that they had no time left to spend on the project and the project had to shut down. This meant that the gidget man could not hire people to make his gidgets and the customers had to go some where else.

Just when the he thought that things could not get worse, the gidget man received letters from attorneys representing the architect, the contractor and subcontractors and a number of suppliers demanding that he compensate them for their losses. The thing that surprised him most was that the total of the claims exceeded the amount of savings his son took credit for.

In an attempt to find out what was going on, the gidget man called his friendly architect only to find out he was no longer friendly. "Talk to my attorney" said the architect. He then called his friendly contractor only to find out that he too was no longer friendly. "Talk to my attorney" said the contractor. Finally, he went to his son who said "Don't worry Dad, I have engaged the finest attorney that money can buy and we'll fight them to your last dollar"

Now the gidget man was really concerned to the point where he  had difficulty sleeping and eating and eventually became so weak that he could no longer make gidgets. He had to lay off his employees and close his buildings and soon had no customers left. His heart was broken and his bank was not far behind.

Then one night, when all seemed lost the gidget man had a dream in which a visitor came to him and said "I am the spirit of teamwork and I bring trust and mutual respect to building projects such as the one you are having trouble with. You should remember me because I was present on many of your projects before your son drove me away. You must understand that I only remain on a project as long as the project members want me there and when I leave adversity and conflict take my place.

Now because you are a decent person and have demonstrated goodness in the past, I will tell you how to regain your health, your business and your fortune.

First you must call your friendly architect and contractor together and demonstrate a willingness to work with them to resolve the issues. You must deal them in a fair manner and negotiate a reasonable settlement of the claims. Under no circumstances are you to leave a dispute unresolved. When all claims have been resolved, you must reestablish the harmonious relationships that you once knew. I have given these same instructions to your architect and contractor who are also anxious to rid themselves of this terrible burden of litigation, so your task should not be difficult."

When the gidget man woke in the morning he was full of joy and immediately called his architect (who now seemed friendly) and his contractor (who also seemed friendly) and arranged a meeting at which all parties dealt in good faith, and all disputes were resolved amicably. And, above all, all parties agreed to return to the relationship of trust and mutual respect that they once knew.

As a result the gidget man regained his health, rehired his workers and produced lots and lots of gidgets that brought his customers back. Before too long he needed more and more buildings and his friendly architect and friendly contractor provided them and made a reasonable profit in the process.

When the son saw how happy his father was, he put away his diploma, borrowed money from his father and took a cruise around the world, quite pleased with himself for if it wasn't for him his father would never really appreciate the value of a non-adversarial relationship.

Moral: Relationships work best when the parties work to make them work.

Just a comment from the Editor <g>.  Transaction costs aren't just finders fees, and attorney hours and such. They include the cost of the nature of the relationship.  If you have to fight for every inch of a deal, it is going to cost you.  If that is your amusement and entertainment in life (I once had a client like that), it is money well spent.  But ... fighting is often not worth the cost, even if you "win."

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This HTML version of this article is copyright 1998 by Frank Muller P,E., Esq. and Richard A. Coughlin P.E., MBA. All rights reserved, used by permission.

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