Negotiating Agreements for Highly Collaborative Relationships

It’s time for a new approach and mindset for contract negotiations, time to leave the old me-first, I-win-you-lose strategy far behind, replaced by highly collaborative 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. A new way of thinking about business relationships is needed, a new paradigm that can take you and your partners beyond the handshake and the initial yes to Get to We.

What if instead a set ethical of social norms based on mutual trust was the foundation of the deal? The latter course may sound naive and impossible to achieve, but our research found that companies of varying sizes and industries established highly collaborative relationships on a foundation of common social norms. Our new book, Getting to We, outlines the six social norms—which we call guiding principles—and describes a five-step process that will make establishing highly collaborative relationships a reality.

Getting to We is a paradigm shift for business negotiations processes based on the application of Vested’s proven “what’s-in-it-for-we” (WIIFWe) business relationship approach.

The WIIFWe mindset is the foundation of a Vested relationship; it is a change in social norms from a “what’s-in-it-for-me” (WIIFMe) mindset. WIIFWe is the philosophical mantra that forms the architecture for a collaborative and trusting relationship. Once embraced, a WIIFWe mindset has the power to deliver a powerful competitive advantage for the parties long after a deal is signed.

Here’s the crucial element: The Getting to We mindset and process changes the goal of the negotiation from the deal itself to the relationship. In other words, the relationship itself becomes the focus of the deal, throughout the life of the deal.

This unique and compelling idea says that once parties have gotten to 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 the negotiation from simply getting the deal itself done to forging a win-win partnership. Following this process helps companies change how they view the relationship—helping them embrace the WIIFWe mindset. This is done through an approach based on trust and six vital core principles that flow from a true commitment to trust: reciprocity, autonomy, honesty, equity, loyalty and integrity.

These principles, so important in our personnel endeavors and interactions, should drive collaborative business behaviors; this is especially true in today’s highly volatile and uncertain global economic climate. And it applies equally to existing relationships and to new ones. Therefore, 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 very common ways in which companies negotiate become unacceptable, such as coercion, or bluffing, or lying.

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 go on to create a negotiation atmosphere that encourages cooperation. There are three things about a WIIFWe relationship that alter the conventional tit-for-tat strategy:

  • 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.
  • The relationship adheres to the common set of principles (outlined above) that drive cooperative behavior.
  • 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.

The Getting to We process comprises five distinct steps: the first four take the parties to We, and the fifth step ensures that the parties live the We mindset. None of the steps should be skipped, because cutting corners will only derail the ultimate purpose: Getting to We.

The five steps are outlined briefly as follows:

  1. 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 will 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 are willing to explore establishing or renegotiating a highly collaborative relationship.
  2. 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. Furthermore, it will guide the partners, not only throughout the negotiation process, but throughout the term of the relationship.
  3. 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 relationships from average functioning relationships. The principles provide the mindset to support the partners on their journey to live We. Without guiding principles to prevent opportunism and competitive tit-for-tat moves partners will not behave in a collaborative manner with each other.
  4. 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 and 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 the deal’s specifics.
  5. 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.

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 entity. 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.