The Consequences of a Win/Win Agreement


I’ve been reading The 7 Habits of Highly Effective People.  It is an “old school” book, and is a much heavier read than a lot of the more recent business related books.  The content is golden, though.  One chapter is on thinking win/win.  A win/win mind set is when you go into an agreement, or negotiations, with the prospect of coming up with something beneficial to both parties.  Over the years I’ve heard a lot of folks talk about “win/win”, but I get the impression it is more lip service while folks look out for their own best interests.  In business relationships, I believe it is better to walk away than to enter into a relationship that is not mutually beneficial.

A very small part of this chapter talks about how consequences are the natural result of a win/win agreement.  This is an important point that I feel was glazed over in the book.  There are four type of consequences that can be the result of an agreement:

  • Financial: Do a successful job and you can get more money!
  • Psychic: This is the ego boost, or the act of recognizing someone for their accomplishments.  Programmers answer questions on Stack OverFlow or the Adobe Forums because they want to help people and feel good about it.  The book mentions that this type of reward is often a bigger motivator than money.
  • Opportunity: If you’re a success, you’ll get more opportunities.  Opportunities are going to be related to the job.  As a consultant / vendor, many clients are going to say this to you as a way to negotiate your price down.  “Do a good job here and we’ll hire you for the next, bigger project.”  That is usually bunk because the next project is going to have similar budget issues.  However business folk do talk to each other, and being a success one one project will get you referred.  In fact, the entire 10 years of DotComIt Consulting was funded primarily by referrals.  Other opportunities could be training or comp time off, or… well, be creative.
  • Responsibility: If you do a good job, you’ll get more authority, or a wider scope of duties.

The idea is that in a win/win agreement, you are defining the actions that need to be done, the consequences of success ,and the consequences of failure.  You are not dictating the procedures or path, only the end result.  I’m still absorbing this idea, but I can think of many ideas where I failed in this.  Here is one:

When building the Flextras e-commerce site, I outsourced it.  I had a detailed mock up of how I envisioned the site would work; the pages that were needed; and some “business logic” style comments on each one.  I virtually sat down with the developer and went over the specs and we worked out a time frame for development.  We agreed to an hourly rate, signed a contract, and off he went.  He missed the first two deadlines.  I wasn’t keeping tabs on him because I was off building product.  Finally, I was ready to launch, but had no site.  I spoke to him two days before Christmas and asked if he could make final delivery by the end of the year.  We worked out a new list of deliverables, with less functionality to be ready and off he went again.  He missed the deadline a week later.  I was upset.

The problem is that there were no consequences for missing the deadline.  And no consequences for making the deadline either.  It was an hourly agreement, where I paid a contractor for the time he put in.  The missed deadlines, and late delivery were a direct result of me not defining the consequences.  How could consequences have helped the project?

I could have offered a bonus for on time delivery, or I could have received a discount for missing the delivery date.  I may have been able to offer psychic rewards, such as a hand written thank you note upon successful completion or a shout out to all my twitter friends, a public thank you on my blog.  I’m not sure what extra responsibility I could have offered to a non-employee; but you can be sure I’ll think twice before recommending that developer for future opportunities [or jobs].

I try to think of successes I’ve had where defining consequences has brought about successful implementation, but unfortunately I cannot think of one.  It is something I plan to explicitly incorporate into the agreement I make with future employees, contractors, or business partners.

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