Simply getting the deal done and then moving on to the next one is a lot like treading water - you stay afloat but don't get very far.
There's much more that's needed besides "this deal, right now" in modern negotiations. Just filling out the signature page as quickly as possible is short-sided and unfocused. Simply put, it's not very useful for healthy strategic, long term relationships. A new approach and mindset for contract negotiations is needed that replaces the old school me-first, I-win-you-lose, risk-averse, lowest cost strategy with highly collaborative partnerships. The stress here is on creating partnerships that share and expand value.
There's a better way of thinking about business relationships that takes negotiators beyond the handshake and the initial yes to "Get to We," embodied in five steps and six social norms that should form become bedrock of a collaborative, shared value business relationship.
The five steps, featured in Getting to We: Negotiating Agreements for Highly Collaborative Relationships, enable businesses to change the goal of the negotiation from the deal to the relationship. In other words, the relationship forged by the parties becomes the focus of the deal, throughout the life of the deal. The goal of the negotiation changes, from simply getting the deal done to establishing a win-win partnership long after the deal is done.
This is the essence of the Vested sourcing business model's "what's-in-it-for-we" (WIIFWe) business relationship approach, which enables the parties to focus on the true nature of their relationship - together.
Negotiating the true nature of the relationship under a WIIFWe/Getting to We mindset means that the parties move out of the competitive tit-for-tat cycle of actions and reactions and instead go on to create a negotiation atmosphere that encourages cooperation. Three things about a WIIFWe relationship alter the conventional tit-for-tat strategy:
The parties become partners for success. They transform a transactional business relationship into a strategic relationship.
The relationship adheres to a common set of principles - reciprocity, autonomy, honesty, equity, loyalty and integrity - that drive cooperative behavior.
The partners live the WIIFWe approach in their day-to-day interactions and use a formal governance structure to ensure compliance with cooperative behavior.
The Getting to We process comprises five distinct steps: the first four take the parties to WIIFWe, and the fifth step ensures that the parties live that mindset.
Getting ready for WIIFWe. This initial step examines three foundational elements for a successful, highly-collaborative relationship: trust, transparency, and compatibility. When the parties complete this step they should 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 their situation, and whether they are willing to 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 their partnership. They will enter the discussion each with their own vision, but then the parties transform those separate visions into one shared vision, giving the partnership its purpose beyond a series of transactions.
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 is the critical step that distinguishes highly collaborative, trusting relationships from average functioning relationships. The principles (reciprocity, autonomy, honesty, equity, loyalty and integrity) 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. Only now is it time to begin to negotiate the deal. Partners following the Getting to We process don't 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 those details. This includes agreeing on "negotiation rules," or the strategies, tactics, and the 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 deal specifics.
Living as We. At this point the partners have reached the final stage of the journey: living as We, which occurs when they maintain a focus on the shared vision and guiding principles throughout the life of the relationship. Because 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.
The five steps put companies on the path to create and nurture a partnership entity. Negotiating the nature of that entity is as important as negotiating the specifics of the deal.
This is a unique and compelling approach: once parties have gotten to yes in a contract negotiation, some real work and resources are needed to cement a lasting, collaborative, shared-value partnership in which all of the parties prosper in a win-win partnership.
So it's not just a one-off negotiation, a handshake and then on to the next negotiation. It's much wiser to create and nurture a partnership entity. The transformative 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.
Kate Vitasek (firstname.lastname@example.org) is a faculty member of the University of Tennessee's Haslam College of Business Administration. Her award-winning research has been featured in five books including Vested Outsourcing: Five Rules That Will Transform Outsourcing and Vested: How P&G, McDonald's and Microsoft are Redefining Winning in Business Relationships. World Trade Magazine named her to their list of the 50 most influential people and ideas impacting global trade.