While preparing for a “Elite Negotiator” workshop some time ago, I asked John E Pepper Jr., the former CEO, Chairman of the Board and President of Procter & Gamble, who orchestrated several multi-billion dollars acquisitions what would be, in his opinion, the most important characteristics of the best long-term business relationships.
By the way, John’s life-long belief (which I share wholeheartedly) is that “Life is all abot relationships”, and that people do business with people, not companies with companies! This you will feel “perspiring” from his ideas below.
His reply came fast, as always. He said that, from his experience, there are 4 characteristics which will signal that you are on track to a successful long-term business relationship.
1. Both parties feel they are getting a “fair shake”. I loved the “fair shake” expression! It underlines that how the parties FEEL/PERCEIVE fairness is of paramount importance. It may mean that a “fair shake” is different from the 50/50 split of the “pie”! Sometimes a party may gain less than 50% of the “material subject of the negotiation”, but still be very happy because other, non-material gains, are more important (for example, a party may consider the relationship as being much more important than the monetary aspects and agree to give up some $ in the initial deal, but gain the long term relationship)
2. Both parties have a feeling of security and a sense of reliability in the relationship. While this may look as a no-brainer, I have seen countless situations in which I did not feel secure or did not trust that the relationship with the other party will stand the test of time. Call it my “feminine intuition”, but there was something that made be feel unsecure. On your side, always try to be reliable and keep your word! There is nothing that kills a person’s image faster than the lack of trustworthiness! And demand the same from the other party. It should be a “fair” deal, after all!
3. Both parties feel there is a recognition of their interests too. Some time ago I heard someone saying “For me, a WIN-WIN is when I win twice”. And she was not joking! Sadly many people use the “wooden” language of “win-win” when they actually think (in the best case) just “WIN!”, without caring if the other party wins too. Many deals went sour when a party realized that their interests were not honestly considered in the deal. Remember that people are not stupid and you can fool someone once, but then your reputation will be significantly wrinkled! So, be honest and ask the other party what they need and try to satisfy these needs to the best of your abilities. If you are afraid to be honest and open, revisit point 2. above, because you have a serious issue about the credibility of the other side!
4. Both parties feel there is an opportunity to grow / develop as a result of the partnership. The business relationships are never static, they evolve as the time goes by and as the business circumstances change. Growing as a result of a business partnership is a normal expectation. If you see that your joint business is stagnant or decreasing, check what is happening and have an honest conversation with your business partner. Also, at the beginning of the relationship, in the phase of negotiations, understand what’s in it for you from a growth point of view. This must be clear upfront; if not, think twice whether this is indeed the right partnership for you. On your end, be professional too and say it out loud if you feel that the potential relationship doesn’t help you or the other party grow. It is always better to know sooner rather than later if things are not working between the parties, as it is easier to walk away (less investment in the relationship has been made and the sunk cost is significantly smaller).
I strongly resonate with all these 4 characteristics of the best long-term business relationsm and I wish everyone would keep them in mind when they negotiate their next deal. I’m 200% convinced that their results will be significvantly better and more long-lasting. THANK YOU, JOHN!