Life is never black and white. It is a mix of both and more like a gray shade. Allow me to explain.
There were these two gentlemen seated opposite me one evening, seeking my services in shedding more light about the ways to commence a business venture. Before they begin to embark on this journey, they thought it prudent to engage a startup consultant for guidance and directions. Well, it was very wise of these two to do some spadework right before the start, and not as an afterthought after inception.
So I say, “Gentlemen, I understand you want to set up something of your own. Fine. Is there a MOU ready?” Both erupted “Memorandum of Understanding? But that’s an agreement Naveen! We haven’t even started and you refer about MOU? That’s premature and preposterous in the present scenario. Please place it in perspective”. I agreed “Fair enough. Let’s deliberate”.
It’s not just these two, but most of us get it wrong. We are so familiar with the acronym MOU but fail to fit in the frame in our own premise but prejudiced in understanding that it’s a formal agreement between a vendor and client or a pact signed up between two entities. Why shouldn’t there exist one between two individuals within the same organization, for instance between these two budding entrepreneurs who are soon to become business partners. Puzzled and perplexed, they sit still, but quite sarcastic in expression while awaiting for me to articulate.
In easing their tension, I reminisce and take them to my good old days. It is easy connecting through anecdotes and I narrated something from my personal experience for them to empathize. As a boy I was always mystified by the rainbow – the 7 VIBGYOR colors and the beautiful arc that starts from one end of the sky and curves into the other, and shout with joy “mom, look rainbow”. My mom would say “Where it ends lies the pot of gold – prosperity”. With childhood innocence and ignorance, I would ask “Why can’t we have our home there then?” She would smile but chide me “Child, don’t dream, but work hard and you will prosper”.
The two gentlemen were by now interested but then again intrigued as to where this was leading to. I sensed and summed up: “Do you have the rainbow with you? You guys have got together but have you signed a MOU between yourselves during initiation? These are the 7 salient and most significant statements as a ‘must have’ in your MOU:
Vision: Definition of the reason and rationale in initiating the business in the first place.
Individuals: The background of the people/partners coming together
Bringing: Contribution in terms of time, knowledge, investment that each partner brings to the table.
Get: Expectation/Return on investment for the principal stakeholders (cash and/or equity).
Yardstick: Definition of short and medium term goals to accomplish as a team.
Objectives: Articulation of business and personal goals
Roles and responsibilities: Donning, defining, and discharges duties aligning with accountability and achievement
“How many amongst ourselves have the clarity to communicate to the stakeholders and promoters? If the vision, ownership, rights and responsibilities aren’t black and white, how would they translate their efforts to results? So often what applies for others and outside the ambit of our organization is never applied within. Like charity begins at home, correction too starts from the self. Hope you two got something from this conversation.”
The discussion was over. When they shook my hands to part ways, one remarked, “We understood the significance of the MOU. Thank You. By the way, your mom was right. At the end of the rainbow, there indeed lies the pot of gold”. I smiled. Yes, mothers are always right. The other added, “Maybe other wannabe- entrepreneurs too might find this a guaranteed guideline. Please do spread the word around.”
Today, they are thriving and often touch base with me, and never miss an opportunity to remind me of the rainbow!! It did add colors to their life.
Naveen Lakkur is co-founder & Director at Compassites. Naveen has a track record of 5 successful IT start-up initiatives in his professional career. He is an expert in building IT start-ups and has demonstrated his proficiency in innovating, validating and converting ideas into working business models. He has participated in 30+ successful ideations. He has also gained experience from large enterprises such as Wipro and Digital and has donned several roles. “Converting Creative Concepts into Commerce with Compassion” is a one line intro of Naveen.