The word 'partnership' is often bandied around as the holy grail of negotiation.
But while it is always appropriate to create a true partnership with your buyer or supplier, some partnerships are more about one side trying to make the other feel better about the fact they are battering them!
I spent two years working on the relationship between a small supplier and a large supermarket to whom it sold 80% of its product.
The supermarket required an open-book approach to its relationship with the supplier in the name of 'partnership'. It offered the supplier large volumes of growth but with a reducing margin - so the supplier's profits increased moderately but his exposure to risk was increased substantially. As a result, the supplier started hiding profit. This clearly was not 'partnership'.
The approach to true partnership is different. Partnerships occur between people. Therefore, separate the deal from the relationship. Negotiators who don't feel the need to trade the relationship for the individual terms within the deal exchange more information and create more valuable deals in the long term.
The cycle of partnership could work like this: share information about interests and priorities; improve mutual understanding of each other's objectives; expand the scope of discussions to allow for value to be created innovatively; create mutually valuable trades; and improve trust and communication so more information will
be shared.
The two parties must trust each other. Trust takes months, if not years, to build - but breaking it can occur within seconds.
Partnerships occur when both parties are prepared to give the other the benefit of the doubt. Being trustworthy means you always deliver on your commitments. But sharing too much information demonstrates naivety.
Therefore, the degree to which we share information needs to be considered in the light of the overall trust we feel for the other party.
Intransigence in negotiation kills the other party's trust. The ability to compromise demonstrates positive intent - but ensure your concessions are labelled or they will be valueless.
If you trust your business partner sufficiently to drive true partnership, you will always squeeze far greater value out of your relationship.
Graham Botwright is a partner in The Gap Partnerships, which specialises in commercial negotiation and development solutions.
But while it is always appropriate to create a true partnership with your buyer or supplier, some partnerships are more about one side trying to make the other feel better about the fact they are battering them!
I spent two years working on the relationship between a small supplier and a large supermarket to whom it sold 80% of its product.
The supermarket required an open-book approach to its relationship with the supplier in the name of 'partnership'. It offered the supplier large volumes of growth but with a reducing margin - so the supplier's profits increased moderately but his exposure to risk was increased substantially. As a result, the supplier started hiding profit. This clearly was not 'partnership'.
The approach to true partnership is different. Partnerships occur between people. Therefore, separate the deal from the relationship. Negotiators who don't feel the need to trade the relationship for the individual terms within the deal exchange more information and create more valuable deals in the long term.
The cycle of partnership could work like this: share information about interests and priorities; improve mutual understanding of each other's objectives; expand the scope of discussions to allow for value to be created innovatively; create mutually valuable trades; and improve trust and communication so more information will
be shared.
The two parties must trust each other. Trust takes months, if not years, to build - but breaking it can occur within seconds.
Partnerships occur when both parties are prepared to give the other the benefit of the doubt. Being trustworthy means you always deliver on your commitments. But sharing too much information demonstrates naivety.
Therefore, the degree to which we share information needs to be considered in the light of the overall trust we feel for the other party.
Intransigence in negotiation kills the other party's trust. The ability to compromise demonstrates positive intent - but ensure your concessions are labelled or they will be valueless.
If you trust your business partner sufficiently to drive true partnership, you will always squeeze far greater value out of your relationship.
Graham Botwright is a partner in The Gap Partnerships, which specialises in commercial negotiation and development solutions.
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