You are here:


Contributed by Jim Thiemens

Agreement – A mutual understanding or intention between parties regarding a course of action, products or targets.

We make agreements everyday.  Some of them are large, formal and long term like a strategic plan or complex contracts.  However, most agreements are less formal such as “we are going to produce 100 more fish hooks this week than plan” or “I’ll meet you for lunch on Thursday instead of Friday”.  So we see there are various types of agreements:

  • Formal Agreements these include the U.S. Constitution, A Strategic Plan as well as an annual business plan and management reviews to evaluate performance.
  • Understood agreements these are agreements such as Safety rules, company policies and conditions of employment that are just simply understood.
  • Informal Agreements – these are used to handle issues and opportunities as they occur throughout the year in such a way as to effectively Identify, Evaluate and Respond to them.

The process of making an agreement is important to assure everyone involves clearly understands what it is and what it means to them. The steps in making and completing an agreement are as follows:
  • Complete a clear statement of what is to be accomplished
  • Identify the necessary steps
  • The assignment of responsibilities and resources
  • Establish a time line
  • Complete a management review

Consider that our Constitution, a Strategic Plan and Annual Business Plans are formal or understood agreements.  However, you then must consider that things change, opportunities appear and problems must be solved. This is the area of informal agreements.  Informal agreements are made on the way to implementing the formal agreement.

We didn’t abandon the Constitution just because we had a war or someone discovered electricity. Instead, we changed our implementation through types of informal agreements to better implement the formal agreement. 

We see that the formal agreement provides the platform from which we can identify our choices, evaluate them and choose our response.  The process for making informal agreements is the same as making any agreement and is made with the intention of implementing the formal agreement.  This is how we “adapt improvise and overcome”.