If the recent economic collapse has taught us anything, it is that the pursuit of immediate gain with no attention to long-term consequences is a recipe for disaster. The gains accumulated were primarily on paper, but the losses have been painfully real. The folly was in thinking that the deal itself was the goal.
Unfortunately, that narrow focus misses the real point. Getting to “yes” is not the same as getting results. The challenge we all face is not in getting people to make promises, but in getting them to carry out those promises fully, willingly and consistently. That can only be accomplished by building honest and mutually committed relationships with the people who will be carrying out that agreement.
In the same way that wedding vows don’t guarantee a happy marriage, contractual terms won’t ensure smooth and successful business. Success depends on the parties’ willingness to make it work because they feel committed to the relationship and satisfied that they are benefiting from it.
Imagine this: A customer’s HR manager drives your training firm’s contract down to a rock-bottom price by continually reminding you of their company’s negotiation power and threatening to drop you for a cheaper competitor. You may reluctantly sign the deal, but wouldn’t you quietly begin charging them for every little “extra” they request, things you would willingly throw in for other, more likeable clients?
Traditional deal-based negotiation is transactional. It’s about this deal, these terms. Get a signature and you’re done. With its emphasis on winning and losing, transactional negotiation is frequently compared to a game or battle. But there is a crucial difference: Games and battles don’t require cooperation once they are over.
There are other critical differences:
- In a deal, the goal is to get an agreement. In a relationship, the goal is to work together profitably, starting from the first agreement and building far beyond it.
- In a deal, the party you are negotiating with is your opponent. In a relationship, the other party is your preferred partner.
- Deals are about getting as much of what you want as you can. Relationships are based on fair division and joint burden sharing.
- In a deal, you hold yourself aloof from the other party: hiding information, guarding your responses, pressing your position. In a relationship, you are more open and natural: sharing information and truly seeking to understand and resolve differences.
- In a deal, you may exaggerate the strength of your position or try to trick the other side. Successful relationships are based on honesty, reliability and follow-through.
- Deals are static and inflexible and come with exhaustive contracts intended to guarantee that every term and condition will remain carved in stone until the transaction is completed. Relationships are also based on fundamental agreements, but they are more dynamic and accommodating. Because relationships take place over time, change needs to be anticipated and managed constructively rather than ignored because it falls outside of the scope of the initial agreement.
Not all deals — such as buying or selling a used car — require relationships to succeed, of course. But short-term transaction cases are actually the exception. Most negotiations — from business contracts to internal funding decisions — are for arrangements that will be implemented over time or will lead to future arrangements. Even when you are unlikely to meet that individual customer or supplier again, the relationships you build throughout the negotiation process will have an impact on your future business by shaping your reputation and references.
How do you build relationships? My top 10 list for creating and maintaining a positive connection includes demonstrating:
- Respect and friendliness.
- Honest, open and positive communication.
- Care and concern for the other’s well-being.
- Empathy and understanding.
- Collaborative efforts toward mutual success.
- Reciprocity, returning favors and responding to trust with trust.
- Open-mindedness and flexibility.
- Appropriate commitment.
Relationship building may take more effort than simple deal making, but in the long run you will find that the extra time and work you invest will more than pay for itself in tangible gains — among them a happier, less stressful life.
- 5 Forces Shaping the Future of HR
- Why ‘Leaders Eat Last’
- Video: Overcoming the narrative of racial difference: Why the controversy?
- Mitigating the effects of implicit bias
- What it takes to become a collaborative leader
- It’s time to update your evaluation strategy
- Congratulations to the 2020 LIP Award winners!