
 
        
         
		ADVICE & OPINION 
 THE YES FACTOR 
 FMJ AIMS TO SUPPORT TECHNICAL EXPERTISE IN THE FM MARKET 
 Want strong contract deals and supplier relationships? Here’s why collaboration is key.  
 By Julian Fris, Director of FM consultancy Neller Davies, and Kate Vitasek, an American  
 author, educator and lead researcher at the University of Tennessee 
 Once upon a time, negotiation  
 meant ‘getting to a yes’. But times  
 have changed. Today, the key to a  
 successful supplier agreement isn’t  
 just about scoring the one-time-deal  
 – it’s about a continuing conversation  
 in which day-to-day interactions play  
 just as big a part.    
 With collaboration a vital factor in  
 the business world, the traditional  
 ‘getting to yes’ mentality finds itself  
 at a crossroads. Where conventional  
 negotiation is concerned, the other party  
 is on the opposite side of the table. But  
 to mitigate risk and reduce the total cost  
 of ownership across the supply chain, it  
 is essential that today’s trading partners  
 share the same side – and purpose. This  
 new approach to negotiation is known as  
 ‘getting to we’. 
 What makes this di erent? 
 In simple terms, negotiating the  
 foundation of a long-lasting contract  
 relationship takes precedence over  
 getting to a deal. Embracing a ‘what’s  
 in it for we?’ mindset creates a  
 negotiation atmosphere that encourages  
 cooperation. The details of the deal –  
 including the scope of the work, pricing,  
 and terms and conditions – are no longer  
 the core focus. Instead, the parties start  
 by establishing the mechanisms they will  
 use as they negotiate those details.   
 GET READY  
 For both parties to understand to what  
 extent they can build the foundation  
 for their relationship, they need to first  
 discuss the three core elements for  
 successful collaboration. These are trust,  
 transparency and compatibility. Not  
 only will maintaining these three factors  
 encourage both buyer and supplier to  
 make investments in the relationship – it  
 will also pave the way for innovations and  
 continuous improvement opportunities  
 that benefit everyone.  
 Having a ‘kick-o ’ workshop is a  
 great start to the negotiation process  
 16    FEBRUARY 2021 
 and allows exploration around how  
 each organisation can improve their  
 relationship across each of the three core  
 elements. So, in the case of transparency,  
 what are the benefits of being  
 transparent? How transparent is each  
 party willing to be? And what are each  
 party willing and reluctant to share?  
 Tools, including the Speed of Trust  
 survey  further gauge the trust in  
 the buyer-supplier relationship. The  
 Compatibility and Trust Assessment   
 is another tool that measures five  
 dimensions proven to be linked to buyersupplier  
 success. These are as follows: 
 Trust (in terms of company performance,  
 reliability, and behaviours)  
 Innovation (in terms of the company’s  
 willingness to take risks, and the level of  
 support and encouragement received)  
 Communication (in terms of its  
 flow, consistency, availability, and  
 e ectiveness) 
 Team orientation (in terms of respect,  
 value, and how both parties work  
 together) 
 Focus (in terms of a common purpose  
 and direction, as well as clarity of roles)  
 AGREE ON A SHARED VISION 
 Collaborative buyer-supplier  
 relationships will only work when both  
 parties recognise that each has its  
 own perspective. In a joint-workshop  
 environment, both parties should work  
 together to combine their separate  
 visions into a shared vision. Not only  
 will this give the partnership a purpose  
 beyond a series of transactions – it will  
 also help to guide the partners during the  
 negotiation process and beyond. This  
 is something that should be included in  
 formal terms in the contract.   
 NEGOTIATE GUIDING PRINCIPLES  
 Guiding principles (or ‘social norms’)  
 provide the foundation of a highly  
 collaborative relationship. Formally  
 placing these into the negotiation  
 process helps partners to guide  
 behaviours while building a trusting  
 relationship. For it to work, the  
 following principles need to be  
 adopted: 
 » Honesty: This guiding principle  
 obliges both parties to tell the truth  
 by acknowledging business realities  
 and sharing their intentions and  
 experiences. Without it, the partnership  
 won’t survive as a collaborative  
 enterprise.  
 » Reciprocity: This value obligates  
 both parties to make balanced  
 exchanges and rather than adopting  
 the traditional ‘us versus them’  
 adversarial approach, allows the  
 buyer and supplier to decide what is  
 fair through a more transparent and  
 trusting negotiation process.  
 » Autonomy: Neither party should use  
 power to promote its self-interest at the  
 expense of the other. Both should be  
 free to make their own decisions, while  
 also working as equals. 
 » Loyalty: A ‘relationship-first’ stance  
 means each party’s interests are equally  
 important. In buyer-seller terms, if the  
 buyer demands a 60-day terms policy,  
 for example, this may damage the  
 supplier’s relationship and increase  
 costs if the supplier’s cost of capital is  
 substantially higher than the buyers.  
 » Equity: As with loyalty, both parties  
 should be equal when it comes to  
 equity. Having said that, a 50-50 split  
 isn’t always the fairest approach. There  
 are two important parts of equity, and  
 these are proportionality and remedies.  
 If one party takes greater risks or makes  
 larger investments, proportionality  
 means it may also get a larger  
 proportion of the rewards. An equitable  
 remedy, on the other hand, allows each  
 party to come to a compromise when  
 the contract itself limits the result or  
 does not address the matter. 
 » Integrity: This last value means  
 maintaining consistency when it comes  
 to decision making and actions. By  
 looking at previous decisions, both  
 parties can better predict the future,  
 therefore reducing complexity. Again,  
 this promotes trust and strengthens  
 the foundation of the buyer-seller  
 relationship.  
 NEGOTIATE AS ‘WE’  
 Time for negotiation. But first – what  
 strategies and tactics will and won’t  
 be used when working out agreement  
 details? A good starting point is for both  
 parties to make a list of negotiating  
 tactics it considers acceptable, and which  
 it considers o -limits. By agreeing these  
 details beforehand, they reach a less  
 painful approach to negotiating contract  
 details. Details including the scope,  
 metrics, pricing approach, and terms and  
 conditions should be discussed during  
 this stage.  
 LIVE AS WE  
 The last – and possibly most important  
 step of the process is to negotiate how  
 the relationship will be maintained  
 long-term. In other words, how will both  
 parties ‘live as we’ once the contract is  
 signed? Because complex and long-term  
 relationships are dynamic, a strong  
 governance framework should be  
 formally embedded in the agreement.  
 This enables relationship management  
 to remain the focus when ‘business  
 happens’. Companies sustain their  
 relationships over time by abiding by six  
 governance mechanisms.  
 1) Creating a tiered governance  
 structure 
 2) Establishing clearly defined roles  
 3) Establishing peer-to-peer  
 communications protocols  
 4) Developing a rhythm when it comes  
 to communications 
 5) Making sure performance  
 management is transparent to  
 encourage feedback 
 6) Developing a process to maintain  
 relationship continuity  
 MAKING THE SHIFT  
 The bottom line? Getting to ‘we’ takes  
 business negotiations far beyond simply  
 signing on the dotted line. If you need to  
 get the deal done, sometimes getting to a  
 yes is good enough. But to build a strong,  
 healthy, and long-term relationship  
 between buyer and supplier, the  
 relationship itself needs to be the focus  
 of the deal from start to finish.  
 FAST FACTS