It’s time for a new approach and mindset for contract negotiations—time to leave the me-first, I-win-you-lose strategy and replace it with a highly collaborative approach when structuring partnerships.
What if the agreement you negotiated was more than just a short-term, legalese-burdened piece of paper specifying a bunch of transactions, terms and conditions, self-interested risk avoidance provisions and liability limitation procedures? That mindset is old school and inadequate for today’s economic and business realities.
What if a set ethical of social norms based on mutual trust was the foundation of the deal? This may sound impossible to achieve, but we find that companies can establish highly collaborative relationships on a foundation of common social norms.
We outline six social norms or guiding principles and describe a five-step process that will make establishing highly collaborative relationships a reality. This new way of thinking about business relationships can take you and your partners beyond the handshake and the initial yes to Getting to We—a paradigm shift for negotiation based on the application of our proven what’s-in-it-for-we (WIIFWe) relationship approach.
The WIIFWe mindset is the foundation of a Vested relationship—a change in social norms from a what’s-in-it-for-me (WIIFMe) mindset. WIIFWe is the mantra for a highly collaborative and trusting relationship. Once embraced, a WIIFWe mindset can deliver a powerful competitive advantage for both parties long after a deal is signed.
The Getting to We mindset and process changes the goal of the negotiation from the deal to the relationship—the relationship itself becomes the focus of the deal, throughout the life of the deal. This compelling idea says that once parties have arrived at yes in a contract negotiation, some real work and resources are needed to forge a lasting, collaborative, shared-value partnership in which all of the parties prosper.
The Getting to We process changes the goal of negotiation from simply getting the deal done to forging a win-win partnership. Following this process helps you change how you view the relationship—helping you embrace the WIIFWe mindset. This is done through an approach based on trust and six core principles that flow from a true commitment to trust: reciprocity, autonomy, honesty, equity, loyalty and integrity.
These principles should drive collaborative business behaviors, especially in today’s volatile and uncertain global economic climate. And it applies equally to existing relationships and to new ones. So, to ensure a constant state of collaboration each party is responsible for always following the principles. For example, if the parties take seriously the principles of loyalty and integrity, they will look out for and strive to preserve the interests of the relationship, which means that some common ways in which companies negotiate become unacceptable, such as using coercion, or bluffing, or lying as tactics to get a better deal for one party at the other’s expense.
Negotiating the true nature of the relationship under a Getting to We mindset means that the parties move out of the competitive tit-for-tat cycle of actions and instead create a negotiation atmosphere that encourages cooperation. Three things about a WIIFWe relationship alter the conventional tit-for-tat strategy: 1) the players turn into partners for success—they set out to enter into a long-term relationship where each partner intends not to eliminate their partner by moving to another supplier or customer (the intent transforms a transactional business relationship into strategic relationship); 2) the relationship adheres to the common set of principles that drive cooperative behavior; and 3) the partners live the WIIFWe approach in daily interactions and use a formal, governance structure to ensure compliance with cooperative behavior. Thus, the relationship itself generates successive rounds of cooperative tit-for-tat thinking to create value that is mutually beneficial to the partners.
Take These Five Steps
The Getting to We process comprises five distinct steps: the first four take the parties to We, and the fifth ensures that the parties live the We mindset.
- Getting ready for WIIFWe. This initial step looks at three foundational elements for a successful collaborative relationship: trust, transparency, and compatibility. When the parties complete this step, they have a good idea whether they have a solid foundation to move on. If they don’t, they can work on solidifying the relationship, and then continue. Completing this step enables partners to determine whether a WIIFWe mindset has merit for them and whether they will explore establishing or renegotiating a highly collaborative relationship.
- Jointly agree on a shared vision for the partnership. The parties discuss and create a shared vision for the partnership. They will enter the discussion each with their own vision, of course. But then the parties transform their separate visions into one shared vision, giving the partnership its purpose beyond a series of transactions. And, it will guide the partners during the negotiation process and in the relationship.
- Collaboratively negotiate the guiding principles for the partnership. The Getting to We process demands that partners not only improve the relationship but also abide by a set of principles to drive highly collaborative behavior. This critical step distinguishes highly collaborative relationships from average functioning relationships. The principles provide the mindset to support the partners on their journey to live as We. Without guiding principles to prevent opportunism and competitive tit-for-tat moves, partners will not behave in a collaborative manner with each other.
- Negotiate as We. It is now time to begin to negotiate the deal. Partners following the Getting to We process must not start by negotiating the details of the deal such as the scope of work, pricing, and terms and conditions. Rather, they must first establish the mechanisms they will use as they negotiate the details. This includes agreeing on the negotiation rules—the strategies, tactics, and methods for ensuring the deal is fair and balanced, especially when it comes to how the parties deal with risk allocation and creating value. Once the partners have agreed to these mechanisms, they will use them to achieve a consensus on the deal’s specifics.
- Living as We. The partners reach the final stage, living as We, when they maintain a focus on the shared vision and guiding principles during the relationship. Since relationships are dynamic, the partners choose to focus on relationship management by taking actions and measures required to keep it highly collaborative. The principles continue to play a critical role by driving the partners’ daily behaviors.
So it’s not just a one-off negotiation, a handshake and then on to the next negotiation. It’s time to create and nurture a partnership. The Getting to We process, coupled with the vested WIIFWe mindset, enables the parties to negotiate the relationship itself and set that relationship on a course for continuous and fruitful collaboration.
This is the beauty and transformative power of the Getting to We concept: the business deal gets done, yes, but as a long-term partnership based on the parties’ commitment to fundamental, beneficial social norms. SSE
Are you interested in negotiating greater value? Then join me as I help you implement contract, procurement and sales’ best practices when you get my New Rules for Negotiating Ten Minute Learning Series that includes: manuals, pre-recorded webinars, charts and more. Sign up today! These learning sessions are truly worth your time and effort.