4 Contract Lessons from Avatar

Just saw Avatar in 3D (from James Cameron, the same guy that brought you Titanic), and it’s awesome. Good story and unbelievably real graphics. And better yet, no crying teenagers like with Leo DiCaprio. Being a good nerd, I can’t help draw some lessons for you good folks out there. So here we go:

1. Big Projects Are Cool, but Costly. Around $400 million kind of costly. Make sure things don’t get out of hand. In this case, Avatar will likely draw a profit (as of 3 days and the time of this article, it brought in $232 million worldwide and), so it seems like a risk worth taking. They’re cool. In the same way as with contracts, big projects cost money, but don’t let that stop you from doing it if the potential benefits outweigh the potential costs. Be visionary and ambitious. Did I mention that those are cool too?

2. Believable Imagination Rules. The creativity in this film is probably unparalleled by anything out there. And that imagination is what draws you in. Yet it’s still believable. You honestly believe in flying mountains because the story explains it. (You just have to pay attention.) Creative contracts can end in better results for all sides, but make sure the imagination you bring to these contracts is believable. Have measurable evidence and cite precedents. Better yet, read Getting to Yes to learn how to persuade people.

3. Quality Takes Time. Nobody (particularly Americans used to instant gratification) likes to hear this, but it’s true. The director, James Cameron, wrote the original script in 1996. 1996. That’s a while back. Sure, quality usually doesn’t take that long, but you get the idea. Patience can result in amazing things. Same goes for contracting. Whether buying or selling, patience is a valuable ally. Look at the XM-25, a weapon shooting air-bursting bullets above enemy positions. It leaves no place to hide, so it’s a nice step up for infantry firepower. However, it’s been in development since 2005 and won’t enter into general field deployment until 2012. Just imagine what new fighter jets cost.

4. Recoup Your Costs. While quality is important, you’ve got to make sure you don’t end up holding a money snake – the costs can slither away and bite you. Avatar, like Titanic, will probably need people returning multiple times to see the movie in order to recover its enormous costs. Make sure your customers are lined up for the product or service by the time it’s ready to go or the money snake will get you.

Did you see the movie? Are there any other contracting lessons that can be drawn from this?

Sterling Whitehead maintains his own blog called All Things Sterling.

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Amanda Blount

*** Beware!! Possible Spoiler Alert! ***

I loved AVATAR! I learned some serious Contracting lessons in a foreign area;

1. Stay creative with your personnel and respond to events which may side track a project. Training an under-educated warm body cost less money than replacing millions of dollars of technology.
2. Care about the native population and they will respond in kind.
3. Don’t assume the native population wants what you have to offer. Often in foreign areas, the native population values are different then our own. Negotiations often fall through because of miscommunications of values.
4. Don’t assume the native population is stupid or weak because they do not live as we do. Strength comes in different forms, and when you underestimate a whole population due to preconceived ideas, you may find your ideas are terribly wrong.
5. Don’t try to take what you don’t fully understand. Again, you may end up in a bad situation.
6. If you ever want to do business in an area again, or you plan to stay for awhile, killing home tree is not the way to secure long term business relations. Also, your negotiations will only go south once you start destroying sacred areas.

There were many other contracting lessons to be learned from the movie, but I want to leave some for others to post. Plus, not everyone has seen the movie.