Whether it’s promising venture capitalists a return on investment, inking contracts with suppliers, or collaborating across departments to achieve a companywide goal, forging partnerships is an inevitable feature of doing business. And those partnerships are built on negotiation.
“If you’re in a long-term partnership, ultimately you’re in a long-term negotiation, because every interaction, in some way, tends to shift or manage the expectations of the other party, which will have a bearing on how they perceive any future discussions,” says Guy Johnson, founder and managing director of negotiation consultancy BreakPoint Black.
Often, people are inclined to view negotiations as zero-sum games, where the party on the other end of the table is an opponent that needs to be beaten. Sometimes, that approach might be helpful—as, in Johnson’s example, when negotiating a one-off purchase of a product such as a used car. If you want to maintain a long-term partnership, negotiations need to be geared toward finding common ground, or what Johnson prefers to call a value exchange.
Johnson’s distinction is astute. Common ground implies there’s a particular product, culture, or interest that the two parties share; a value exchange recognizes that the two sides of a negotiation have different but complementary priorities. While the former is useful for building relationships at the outset, ultimately, Johnson says, it’s the exchange of a commercial value that maintains a business partnership.
“A mistake we see very often with our clients is focusing on rapport and relationship building at the expense of the creation and exchange of true commercial value,” Johnson says. Of course, you want to have a cordial relationship with your business partners, but “if that’s not backed up by the creation of commercial value, how much is that relationship going to be worth when somebody else comes along?”
One simple way associates might mistake building rapport with creating a value exchange is when they meet business partners for coffee or lunch simply to maintain a personal relationship, without using that chance to check in and see if their partner’s business priorities have evolved.
Even internally, companies are prone to mistaking routine meetings for productivity. (Read Priya Parker’s excellent The Art of Gathering for more on that.) The question of precisely what value face-to-face meetings offer lies at the heart of the work-from-home, return-to-office divide—a tense negotiation between employers and staff.
That’s not to say there is no value to face-to-face meetings. At the simplest level, face-to-face meetings generate a lot more contextual information than, say, texts and phone calls do, allowing both parties to better interpret the tone and reception of a message. But for meetings to be valuable, the parties organizing them have to be deliberate about what they’re trying to achieve and mindful of how to achieve it.
Next week, we’ll look at how business partners can establish and maintain that vital value exchange, and why partnerships sour when either side takes an eye off that common ground.
Eamon Barrett
eamon.barrett@fortune.com
IN OTHER NEWS
Social insecurity
The younger generations are increasingly concerned about their retirement years—specifically, that there won’t be any money left in Social Security to help fund them when they get there. Gen Z, Fortune’s Chloe Berger reports, is the least confident they’ll be able to save enough to retire, according to BlackRock’s 2023 Read on Retirement. Alongside recession-scarred millennials, they’re outpacing older generations in 401(k) contributions in order to address this fear.
How to make decisions about A.I.
Google’s chief decision director—a role that involves devising frameworks for informing executive decision-making—has left the company after 10 years, in order to launch a solo consultancy that advises CEOs on how to navigate the minefield that is artificial intelligence. One question Cassie Kozyrkov suggests leaders ask themselves before pulling the trigger on any decision: "What would it take to change my mind?"
A.I’s ‘hallucinates’ on mushrooms
Books written by A.I. could already be having life-ending consequences. Amazon and other retailers are reportedly selling multiple foraging guides written by A.I., which the New York Mycology Society has warned could misidentify deadly species of fungi as edible. A mycologist in the U.K. reviewed one such book and found it suggested tasting mushrooms as a means to identify their species.
Birmingham is bankrupt
Birmingham city council, the local government body of the U.K.’s second-largest city, effectively declared itself bankrupt on Tuesday because it doesn’t have enough money to pay £760 million ($955 million) in equal pay claims it owes to female government employees who were paid less than men in the past, Fortune’s Prarthana Prakash reports.
TRUST EXERCISE
“Obviously, he can’t handle the truth. Hopefully, Ramaswamy’s GOP rivals and political reporters can avoid his diversionary maneuvers–and focus on the truth.”
So says professor Jeffrey Sonnenfeld of the Yale School of Management in a scathing takedown of Republican presidential hopeful Vivek Ramaswamy, who has been rising up the polls to (by some reports) edge out Ron DeSantis as a favored second-place contender. Sonnenfeld’s portrayal of Ramaswamy as an “entrepreneurial huckster” and “court jester of corporate governance” suggests voters need to take careful due diligence when assessing the candidates' campaign pledges.
Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.