The Operational Agreement: what it is and why it matters
The written agreement is the concrete output of the program. It's not a summary of conversations — it's a document that specifies what was decided and how it will work.
A working document, not a legal contract
The operational agreement is a practical document written in plain language. It captures the decisions that partners reach during the four facilitated sessions and organizes them into a clear reference that both partners can use day to day.
It's not a legal contract — it doesn't replace a shareholders' agreement or any formal legal document. It's an operational tool: a written record of what both partners have agreed to about how they'll work together.
Partners who want to give the agreement legal standing can take it to a lawyer afterward. The program doesn't provide legal advice.
What the operational agreement covers
Role & Responsibility Map
A clear description of each partner's primary responsibilities — what they own, what they lead, and what they support.
This section documents the agreements reached about who is responsible for which areas of the business. It covers operational responsibilities, commercial responsibilities, administrative responsibilities, and any shared areas.
- Primary responsibility areas per partner
- Shared responsibilities and how they're managed
- Tasks that were previously unclear or unclaimed
- External relationships each partner manages
Decision Authority Matrix
Which decisions each partner can make independently, which require consultation, and which require joint agreement.
This section maps the decision landscape of the business and assigns clear authority. It reduces the consultation load on routine matters while ensuring that significant decisions involve both partners appropriately.
- Decisions each partner can make independently
- Decisions requiring prior notification
- Decisions requiring joint agreement
- Spending thresholds for each category
Financial Arrangements
How compensation works, how profits are distributed, and how financial decisions are made between partners.
This section documents the agreements reached about how money flows between the business and the partners — compensation, profit distribution, capital contributions, and the criteria for changing these arrangements.
- Partner compensation structure and criteria
- Profit distribution method and timing
- Capital contribution obligations
- Process for renegotiating financial terms
Deadlock & Review Process
What happens when partners can't agree, and how the agreement itself gets reviewed and updated over time.
This section defines what happens in situations where partners can't reach agreement — the steps to follow, who can be brought in, and what the fallback is. It also specifies how and when the operational agreement itself should be reviewed.
- Deadlock definition and escalation steps
- Agreed fallback positions for key scenarios
- Schedule for agreement reviews
- Process for proposing amendments
Why writing it down matters
Verbal agreements between partners erode over time. Memory is selective. What seemed clear in a conversation becomes ambiguous six months later — especially when the business is under pressure.
A written agreement doesn't eliminate disagreements. But it gives partners a shared reference point — something they both signed and agreed to — that makes those disagreements easier to navigate.
About the operational agreement
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