In the classic business and self-leadership book The 7 Habits of Highly Effective People, Habit 4 is to Think Win/Win. Most people understand Win/Win – it’s a deal where both parties feel they’ve won. In the author Stephen Covey’s words, “With a Win/Win solution, all parties feel good about the decision and feel committed to the action plan.” (An excerpt of that part of the book is available here.)
Of course, not all deals can or should be Win/Win. In my experience, assuming that you’ve deemed that a Win/Win situation would be best, a common pitfall (that is not so much discussed in the book) is to wrongly assume what is considered a Win for the other party. Sometimes the other party may even accept it without really considering it a Win. Below I reflect on a time I made and learned from this mistake.
I was involved in a project delivery where I had already completed most of the work. However there was a simple yet crucial component that required a subcontractor’s input. It was a fairly simple part, and I could have approached a number of subcontractors and offered them a part in this “easy deal”. I chose a particular subcontractor as I had plans to develop bigger projects with them in the future. I offered them a fairly generous share of the deal (more than I would have offered other subcontractors) and they accepted. I still had significant upside in the deal and they got a steal, so it was a Win/Win…or was it?
Some time later, there was a follow up project, and I again approached the subcontractor and offered them a part in it, again with a fairly generous share of the deal. To my bewilderment, they rejected it and asked for even more. I was quite furious. Were they trying to take advantage of my generosity? Did they not understand that it was a simple job with a disproportionate reward that others would gladly take? I decided to have a frank discussion with them.
I was surprised when they told me that not only had they felt that the second deal was not good for them, but they had also felt the same about the first one! What I had perceived as Win/Win was in fact a Lose/Win situation in their eyes, and they had only accepted because they wanted to offer me some goodwill (by doing their part for less than they thought they should be getting), but by the second deal they already had some inner resentment building up. This was the worst situation. It turned out to be a Lose/Lose situation, with me offering more than I thought necessary and even then with them not feeling that they got a good deal. Moreover, both of us wrongly thought that we were doing the other a favour.
It turned out that in their eyes, there were some non-tangible contributions from them that they felt weren’t rightfully compensated. After some thought, I shared with them that even though I didn’t necessarily place the same value on those contributions, I could now understand their perspective, and more importantly I wanted them to feel that they had a Win out of this deal. So I offered them the deal that they felt was a Win for them too. After the subcontractor also came to understand my original intentions, they appreciated that I had given up some of my upside for them to get a Win. At that point, even though it wasn’t fully necessary, I went back to revise the first deal as well to demonstrate to them that it was really important to me that they absolutely felt good about it.
In this case it was more important for me to develop the longer term relationship with them than to maximize my Win on the early deals. Needless to say, the trust between us strengthened, and my goodwill paid off in the later projects that we did together.
Here I was fortunate that there was a second deal that eventually unearthed the misunderstandings. It also goes to illustrate that sometimes No Deal is the best option, and had the discussions revealed that there was in fact no possible Win/Win, the next best alternative would have been to agree to a No Deal. Quoting from 7 Habits:
With No Deal as an option, you can honestly say, “I only want to go for Win/Win. I want to Win, and I want you to win. I wouldn’t want to get my way and have you not feel good about it, because downstream it would eventually surface and create a withdrawal. On the other hand, I don’t think you would feel good if you got your way and I gave in. So let’s work for a Win/Win. Let’s really hammer it out. And if we can’t find it, then let’s agree that we won’t make a deal at all. It would be better not to deal than to live with a decision that wasn’t right for us both. Then maybe another time we might be able to get together.”
Don’t accept a Lose/Win, and if you propose a Win/Win, really take the extra step to verify that they really feel that it’s a Win too, even if they initially accept, as sometimes the other side may not be as outspoken for a variety of reasons (e.g. due to personality, culture, or power dynamics). Otherwise, be open to No Deal.