Agree onshore

We have already talked a little bit about arrangements and agreements in the previous alley. But now we are going to deep dive a little bit more into this topic.

It is crucial, because if you fail to conclude arrangements and agreements at the very start of a business (relationship) - there can be severe consequences, such as undervaluation of oneself, ending with depression. There may be serious self-criticism and criticism from your close family members or your friends, who may say to you in the end: "Well, it is your fault, you did not ask more for the work you’ve done", etc. Probably these topics ring a bell.?

Let's start with the basics: It happens that you are offered a new position, first, of course, this applies to those of you who are hired top managers and not founders of their businesses. For that kind of job, there is a certain set of tasks, goals, expectations, and deadlines. Now, here are a couple of important points to consider:

What kind of work are you going to perform: restructuring a distressed business or enterprise, or managing a business or assets that are not experiencing any major problems and need proper "fair weather" support from your side? This is the basic and very first question that should be answered.

The next step is about your future compensation: how much you get and how it is going to be structured, depends heavily on the two business cases. If you take over a distressed business and it needs, let's say, very serious structural changes, from personnel to re-financing, re-balancing legal and organizational structures, and in general will and should be subject to fundamental changes and in the shortest time (very typical). In that specific case, you cannot calculate your compensation based on KPIs such as EBITDA, sales growth, etc. Often, such distressed assets are strictly unprofitable, and while you may "clean up" a distressed company by applying all your talents, empirically it will take several years for such a company to come to a break-even point, reach profitability, and grow. In worst case despite all efforts and talents applied - you might fail.

In relation to a distressed business case - if and when you suddenly receive a tempting offer of exorbitant bonuses from a shareholder, immediately remember that such a shareholder is trying to trick you and wants to use you for free. Or this shareholder is not very intelligent, which is very unlikely. Under no circumstances should you allow this to happen to you. Declare your fixed value immediately. I'm sure there are enough talent managers, recruiters, headhunters, or experienced friends in your network who will be able to advise you on the range of your market value for this type of assignment considering your talents, the sector, and the geography of a potential engagement.

Well, concerning the "fair-weather businesses": My advice is to market yourself as a brand, rather than blindly accepting a first incoming offer. Many different factors can be leveraged in your favor - the number of languages you speak, the depth and number of really successful projects you've completed, metrics that can't be measured in money equivalent, such as strong team leadership, charisma or new product certifications for carbon footprint decrease, and other things that are not directly, or at least not immediately, linked to the monetary equivalent of your performance. Don't forget to include all of your accomplishments in your achievements list.

The "agree onshore" principle in this alley is more focused on the dialogue between a shareholder and you as a top manager. However, this principle at the very start applies to all your interactions with all related parties you are negotiating. It is not without reason that at the end of the day, after the conclusion of an agreement, there is a golden saying: "A promise is worth than money." But you should always agree on all crucial parts at the very start. Right from the very beginning. After all, once the ship has left the dock, it is always very difficult to change important agreements or key milestones.?

To sum it up, it looks like this

Conclude and agree on all crucial things at the very start of a relationship.

Know your value and what you want to receive for your services and talents in exchange.

"Fair weather" business and "Distressed" business are two completely different business cases. Also in terms of reward.

Don't be afraid to ask for more in the beginning.

Be aware of what you are giving to that person in exchange.