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Is Collaboration A Myth?

March 26, 2013

In response to a past blog, Charles Rear poses a question: “I wonder if an IACCM member in a Procurement function, and an IACCM counterpart in a sales-function, have ever agreed, openly and with their employers’ blessings, to undertake a contract negotiation according to the IACCM principles of Principled (“win-win”) negotation styles. In the Western world, the instinct to keep information and skills privy to oneself, inhibits application of best practice in negotiations with external parties and knowledge sharing within one’s own organization ….”

I can certainly offer examples from both IACCM members and personal experience. But it does tend to depend on specific conditions, typically either strong personal relationships that have generated underlying trust between the negotiators, or (on the buy side) a history of adversarial relationships and disappointing outcomes that have led to internal soul-searching and a realization that things must change.

Charles is right that ‘win-win’ negotiating tends to be the exception, not the norm – in spite of the fact that a vast majority of negotiators claim that they prefer a win-win approach. It seems to me that there are several factors that result in adversarial negotiations being more typical:

1) Absence of trust.

2) Measurement systems (driven by incentives that have no connection to long-term win-win outcomes).

3) Inadequate planning.

4) Poor coordination within the internal team.

5) Absence of substantive authority to negotiate (especially within Procurement).

What are your experiences and what factors would you say lead to the predominance of a win-lose style?

(As a footnote, I should comment that while it is generous of Charles to credit IACCM with the concept of Principled Negotiation, it was of course introduced in the book ‘Getting to Yes’ some 20 years ago)

7 Comments
  1. Owen Davies permalink

    Tim, it can be a practice of short termism where long termism is the key, businesses take decisions based on business cases established at a strategic level but then rely on their officers to deploy them, this strategy gets lost in the negotiation process.

    Owen

  2. I can state unequivocally that collaboration is no myth! Just ask companies such as McDonald’s, P&G, Microsoft and Dell. It works–and highly successfully–over the long term. Companies that are locked into self-interested, what’s-in-it-for-me mindsets will generally view collaboration with suspicion and paranoia. Breaking free of that will ensure the long-term win-win for themselves and their partners.

    • Kate, you are right. There are great examples of projects – and sometimes of companies – where there is a collaborative spirit and a readiness to build long-term relationships and as a result they achieve superior value. But I think you would acknowledge that these remain the exception rather than the rule – though that is clearly something we are together working to change!

  3. @ Owen. I look at it just the other way around, that is – on operational level people know they’d be better of long-term, while more and more over I see that at a strategic level minds are pretty short-term.
    And therefor to me one of the major reasons why collaboration still seems a myth is what I call The Rock and The Hard Place. The Rock being management on the demand side not listening to what ‘the users’ say they really need and pushing procurement to squeeze as hard as they can. After all – who cares about good requirements and long term relationships if that takes longer to get to while your political career is ever so much shorter? So, ‘Get A Move On!’
    The Hard Place being management on the supply side. Same deal. Shareholders decide how long a management career will be and what incentives to be paid. Merely based on profits on a rapidly turning shorter timespan. Some of them are about to drown, it seems: Would you believe that a delivery manager recently told me that his company organizes so called ‘integrity sessions’, not to talk about how to be a nice and trustworthy delivery manager, no, ‘How far can we push the limits? What can we still get away with?’ Now, this is a respectable delivery manager, believe me. But he just couldn’t help it – he was being forced by his own company to deploy the hidden tricks the bid manager, pricing offers en sales team had provided him with in the successful offering – waiting to unfold. Same goes for many a procurement professional, loaded with all kinds of hidden safety nets. So, there we have it – two souls at either side, both crushed between The Rock and The Hard Place: short-sided, short-term, ego-management. There’s still a lot to do, Tim. For pointing at management (like above) and leave it to that will not help us any further. Great mission for IACCM and each and every member!

    • Jaap, thanks for sharing this interesting perspective on the problems we face in generating longer-term value, Unfortunately, I think you are right that in many cases this is what happens. It is also perpetuated by past experience and resulting perceptions – in other words, because I do not trust that you will treat me well, I will treat you badly in anticipation …

  4. Great discussion, and I would like to add a slightly different perspective.

    In a project environment, I believe that collaboration can work “short-term”, by which I mean on a single project. It does not have to be over a series of projects to deliver benefits. Major projects have inherent characteristics which make collaboration a better route than arms-length competition. I can understand a client’s reluctance if the selling point of collaboration is “the first project or two may not be better – could be a little worse, but by the time we do the third and fourth, we will really be delivering”. I see no reason why collaboration cant deliver fast results

    I have no issue if a client truly wants a “cheep as chips” project. However they are more likely to get one if they use collaborative approaches such as early selection of the team based on capability, aligned incentives & reward for all the team, open acceptance and management of uncertainty, trusting inter-company relationships, contracts which reflect the expected behaviours and relationships, etc.

  5. I really enjoyed this discussion and also believe that collaboration can work but long term, for instance if you are aware of the recent horsemeat crisis, findus faced – do you not think they could have collaborated for a long term win-win situation with local farms or a retail chain to makesure their reputation was back on track and they were showing their stakeholders they can improve their reputation and the crisis itself?
    This would have benefited them for the long term as people would have slowly been reassured – with evidence, that they were using this crisis as a way to manage their relationships better and regain trust?
    Could collaboration have been the answer?

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