Quantum Physics of Belief - Win-Win Negotiations

For the past few weeks, I was writing on how scientific and business research shows that human thoughts and beliefs have an effect on the physical world. In this article, I am going to explore further on how businesses deal with communications both within their organizations and outside clients and vendors in relation to greater profitability and productivity. Sales ability determines your gross revenues, but negotiating ability determines your profit! As a result, most business leaders, at least in Western cultures, think it’s a foregone conclusion that aggressive negotiation with suppliers will yield the highest profitability. Although it’s a common belief that obtaining the lowest price should be the goal, regardless of the impact to the other party, business research and scientific discovery indicate otherwise.

When Wal-Mart sneezes, everybody catches a cold. For the fiscal year ending January 31, 2011, Wal-Mart, the world's largest retailer, reported a net income of $15.4 billion on $422 billion of revenue with a 24.7% gross profit margin. With its single-minded focus on "EDLP" (Every Day Low Prices) and the power to make or break, a partnership with Wal-Mart is either the Holy Grail or the kiss of death for the suppliers, depending on one's perspective. There are numerous media accounts of the corporate monolith riding its suppliers into the ground. The concept of win-win bargaining is a good and powerful message. And, what happens when you encounter someone with a great deal of power, like Wal-Mart, who is also the ultimate non-negotiable partner? Let’s look at how Proctor & Gamble executive Tom Muccio pioneered a new supplier-retailer partnership between P&G and Wal-Mart. Built on proximity (Muccio relocated to Wal-Mart's turf in Arkansas) and growing trust (both sides eventually eliminated elaborate legal contracts in favor of Letters of Intent), the new relationship focused on establishing a joint vision and problem-solving process, information sharing, and generally moving away from the "lowest common denominator" pricing issues that had defined their interactions previously. From 1987, when Muccio initiated the changes, to 2003, shortly before his retirement, P&G's sales to Wal-Mart grew from $350 million to $7.8 billion.

Another great example is the automotive industry. There is a huge difference between the manner in which the US Big 3 automakers – Ford, GM, and Chrysler – negotiate with their suppliers, compared with Toyota-way doing things by Toyota. The Big 3 aggressively pursue the lowest cost in negotiations and have created adversarial relationships with their suppliers. In contrast, Toyota-way is all about creating collaborative relationships with the suppliers. They believe in creating close-knit networks of vendors, where all companies prosper. In essence, they commit to co-prosperity.

When we have important ongoing relationships with people, it’s generally appropriate not to play a competitive game and instead play an alternative game: a collaborative, compromising, or even avoiding or accommodating negotiating game. Collaboration is the opposite of competition in most ways (see the 3^rd article of this series for more on collaboration vs. competitive): you share information instead of concealing it, you focus on the other side’s concerns over your own, and you sit side by side instead of negotiating at arm’s length. Collaboration requires rich, ongoing communication, and it relies on joint problem solving. They talk more, they listen more, they ask a lot more questions, and they make a lot fewer declarations. They are also more forgiving about waffling and take-backs, since they want to get at the real underlying issues and understand that these may not be apparent to the other side at first. The negotiating game is very different when the goal is to make sure both sides win.

Win-win negotiations are the lifeblood of business success in most organizations. Anyone you work with is a candidate for win-win negotiating, including coworkers, team members, employees, bosses, suppliers, customers, regulators, and boards of directors. The payback of win-win negotiation can be seen in traditional terms in that your partners will be more willing to cooperate better and accommodate for future concessions. However the payback can also be considered from a scientific perspective, when considering what new science is teaching us about how we shape our experience.

The implications of the physical effect of our consciousness on our world are that when a business has a consciousness based in abundance rather than scarcity, events unfold in a manner that brings higher abundance, or profitability. Businesses demonstrate a belief in abundance when they adopt win-win negotiation styles, by showing they believe there is enough for all parties to win. Chance events then occur more frequently in favor of the business, such as customers being attracted to it more strongly and employees being more likely to hit upon the next big innovation.

The implications of the research and science are that adopting a win-win mindset can lead to higher profitability, so rather than fighting to retain the most dollars in each transaction, it’s wiser to work towards ensuring that all parties win.

An important caution is that negotiation with a belief in abundance does not mean letting vendors take advantage of you. In any negotiation, always negotiate strongly, while holding the view that all parties could win.

3 Ways Power Changes People

How much does power go to your head? If it didn’t, then you’re the exception and you’re magnanimous and generous of spirit.

According to numerous studies, people put into power positions are prone to a couple of behavior changes:

1.    Power makes most people become more focused on their own needs and wants

2.    Power changes people to become less focused on what others need, want and do

3.    Power influences people to act as if rules others are expected to follow don’t apply to them

Consider this scenario. Three people are working together. A plate of five cookies is made available on the break. Social norms dictate that no one takes the last (fifth) cookie, but what about the fourth?

In an experiment for the research study, groups of individuals were placed into teams of three, to evaluate the output (the “boss”). During the break, the experimenter arrived with a plate of five cookies. This allowed each participant to take one cookie, and at least one participant to comfortably take a second cookie, thus leaving one cookie on the plate. No one was expected to take the fifth cookie and no one did. But what about the fourth, the one that could be taken without awkwardness, or negotiation?

The results of the study showed that the “boss” (the evaluator) was clearly more likely to take a second cookie.  (Videotapes of the interactions also showed them more likely to eat with their mouths open and scattering crumbs widely.)

The conclusion is that individuals in power are more “disinhibited” and prone to focus on their own needs to the exclusion of others.

This is just one study showing bad boss behaviors and how “power corrupts.” There are many others. Maybe you can think of a few examples in your experience when the boss ate the fourth cookie with his/her mouth open?

Leave a comment.

If you’re wondering if you’ve fallen into these power traps, you might benefit from some outside coaching. Give me a call.

Life – Dinner Principle

The “Life-Dinner” principle is valid not only in the relationship between a parasite and its host, but also in a great many other inter-species and intra-species interactions. This principle was originally identified (and named) in systems of the predator and prey type. Put simply, rabbits run faster than foxes for the simple reason that they are running for their lives, while the fox is only concerned about its supper. But the rabbits always stay a little faster than the foxes; because a fox can afford to go without dinner sometimes, but a rabbit can never afford to BE dinner. So the foxes always push the rabbits to go faster. You decide which is the more potent motivator.

But, this isn’t an article about motivations, but rather a very simple principle with far reaching consequences: Priorities matter. Things survive for a reason. Existence implies viability.

Therefore we should always be on guard when given easy answers to hard questions and simple metrics to explain complex businesses.  Life is much more complicated than dinner.

Rabbits, Foxes and Cuckoo Birds

Let’s draw some analogy between the culture and business by thinking deeply about things like rabbits, foxes and cuckoo birds.

Rabbits that are born slow are more likely to get eaten, enlarging the proportion of fast rabbits in the gene pool. Foxes that are fast enough to catch the slowest rabbits survive and continue to propagate, but only need to be fast enough to stay well fed.

If foxes became too efficient or rabbits became too slow, neither would survive. All of rabbits would get eaten and the foxes would either starve or have to seriously change their business model.

The cuckoo story is more bizarre. They have evolved to lay eggs that look so much like those of other birds that they are able to drop them in their nests, leaving the unsuspecting victims to do the hard work of nurturing the cuckoo offspring.

Why haven’t the other birds evolved a defense mechanism against the ruse?  Most likely the costs would outweigh the benefits. They nurture far more of their own eggs than those of the deceitful cuckoos and that’s what they need to do in order to thrive.

Expending the energy of a few dinners is more than worth it when life hangs in the balance.  Nature is a great optimizer.

Life and Dinner in Business

Once you become aware of the Life-Dinner principle you start seeing it everywhere. All too often, it is put in clichéd terms of “long-term vs. short-term,” but it’s really about the difference between having a true commitment to excellence and just keeping up appearances.

Consider the following example:

Leadership vs. Optimization: Optimization is about getting more of what you want with fewer resources.  Leadership is about getting your people to want what you want. Leadership requires not only investment, but serious dedication to the overall mission.

It’s easy for an outside consultant to come in and optimize. Leadership doesn’t show up in excel spreadsheets and there are always ways to squeeze out a few points of margin for a few quarters. By then, the consulting project will be over and impressive ROI results will have been delivered.

Issuing directives is always easier than building a consensus. Organizational charts always look better when they are simple and streamlined. The real world, however, is quite a bit messier.

A False Choice

Many would like to pose the Life-Dinner principle as a tradeoff – do you want to eat today or tomorrow? It isn’t that simple. You have to do both.  What is really at issue is whether you truly want to win or just put up stats and make it look good.

Top professional athletes understand this. They don’t ask, “Is it better to practice hard or play hard?” To be at the top of your sport, field or industry you need to constantly work to be your best every day, even when no crowds are cheering and there is no relevant balance sheet item.

Here is an important note: doing your best and being your best does not mean being at your peak at all times. There is a natural ebb and flow of our energy, attention, and intention across each day. Some days you do better thinking than on other days. Some days you are better listener than on other days. Doing your best means being the best you can be in any given moment, even if you know you have done better on other days. Similarly, being your best varies from day to day and from time to time. One cannot be upbeat and enthusiastic all the time. Being your best means getting the most out of a particular moment, even if other moments felt a lot better.

Most of us operate under a myth in business and often in life in general. We think of it as the 110% rule. There is this unfortunate and unrealistic belief on the part of many leaders that they and their people can and should show up and operate at ‘110%’ every day. The danger is that dinner is always more obvious than life. At the end of the day, you know if your belly is full or not.

So, How Do You Measure ROI?

In our quest for measurable ROI, we forget that the term is meaningless without clear objectives. Are we evaluating only for our dinner or for our life as well?

·   Are we happy with brand awareness or do we also measure brand attributes such as quality, value and other category specific measures of satisfaction?

·   Are we satisfied with marketing campaigns that produce sales, or are we working towards consumer advocacy?

·   Do we measure only sales and profits, or are we pushing for an increasing return on capital?

Research studies have shown that the best companies spend years determining which factors drive their business. Key metrics are specific to a company’s strategy and culture and are therefore often elusive. There is no textbook answer.

Dinner is simple. Life is complicated. Don’t let anyone ever tell you differently.

What Defines Leadership?

The search for the characteristics or traits of leaders has been ongoing for centuries. Yet, defining leadership has been challenging and definitions can vary depending on the situation. Here are a few:

• We have conceived of leadership... as the tapping of existence and potential motive and power basis of followers by leaders, for the purpose of achieving an intended change...
• Though leadership may be hard to define, the one characteristic common to all leaders is their ability to make things happen...
• Leadership can be defined as the will to control events, the understanding to chart a course and the power to get a job done, cooperatively using the skill and abilities of other people...
• Leadership is the ability to get men and women to do what they don't want to do or like to do...
• Leadership appears to be the art of getting others to want to do something you are convinced should be done...

The world is evolving at every second. Everything is being touched by this accelerated pace of change. No person, entity, industry, profession, and no part of the world or any business can escape the relentless pull of the future into the present moment.

Business leaders need to chart an effective course into the future even though they don't have a clue what their organizations will look like tomorrow let alone next year. Many business leaders are mired down in philosophies, strategies and approaches that were the standards held years ago when the rules and the world were more predictable.

The rules are changing - and the rules that are determining the rules are changing.

We are living in a crazy, frenzied time in history. The roller coaster left the starting point several years ago and it is poised for yet another rapid decent - challenging what we know, believe, feel and have forecasted. The smooth ride of the past is nothing more than a distant memory for most of us. Never again will we know what is around the next corner or where or how the ride will end.

How, then, can today's executive, business owner and manager predict what their vision of what tomorrow will look like with any degree of accuracy? It's anybody's guess what the next several years will create, manifest, modify, re-define or even destroy. What you can do is: stay loose, flexible, positive and optimistic. What you want to avoid is: remaining stuck in yesterday's paradigms, attitudes, philosophies and strategies.

What are some of the specific things to avoid as we move into the future?

• Believing that what worked last year or yesterday will work today or tomorrow.
• Thinking that what you thought yesterday about the future will come to pass.
• Status-quo thinking.
• Conventional wisdom or thinking.
• Using yesterday's results as a benchmark for tomorrow.
• Refusing to think out of the box.

Spend some time considering how all of this is impacting your ability to manage successfully.

Let's close things up with what eight of the most common leadership myths:

1. To lead you have to have followers. Leadership does not imply that you have to be in front of a group. If you are the only person working in a department you can still demonstrate leadership attitudes.
2. You can study your way to effective leadership. You can attend hundreds of leadership seminars, retreats, programs, and read all of the books on leadership -- even pay for leadership coaching. Unless you are willing to let go of some of your beliefs, attitudes, prejudices, opinions or paradigms you can have all of the leadership knowledge in the world and still fail as a leader. Just look around you! This doesn't mean that you shouldn't receive leadership training, but it does mean that education is not enough, it takes wisdom, understanding and execution.
3. That to be a leader you have to be in charge of something or someone. Leadership is not position. You can be the receptionist and have a leadership attitude about your roles and responsibilities. You can be in sales and have a leadership style and mindset.
4. You have to be a senior citizen with gray hair to be an effective leader. I know many executives who are still in their twenties and are model leaders.
5. Tenure or longevity equates to effective leadership capabilities. Just because you may have been with your organization for over thirty years does not mean you are an effective leader. Any success you might have had could have been timing, luck, pure effort, will or any combination of these.
6. Position or title equates to leadership. Just because you may be the CEO, President or top executive does not mean you have leadership attitudes or skills. There are a lot of executives running organizations today that I would not classify as good or even acceptable leaders.
7. Leaders have to be willing to do any task that any of your employees are asked to do. Sure if the floor is dirty and the Janitor is sick and not at work someone needs to sweep the floor. But is it really your responsibility to show your employees that you are not above this task? Your employees want a leader they can respect and trust not a back-up for the janitorial staff.
8. Leadership is an endowment or an education process. Leadership, trust, respect and confidence are earned and not a set of mastered skill sets.

Is your business stuck?

Creating a new normal

Many businesses of many sizes have spent the last year dealing with the challenging times. Some businesses have failed, many are still floundering, and many businesses are just stuck. Often when we are defensively forced to deal with outside forces we get so ingrained in our defensive mechanics that we get stuck in that mind set. Defensive mechanics will not lead to positive growth and/or results. There is no question the business world is in the process of creating a new normal. The question becomes how is your business creating and defining its new normal? What will positive growth and future success look like for your company?

It has been our experience that creating a new normal requires going back to basics. Here are some thoughts to consider that have helped our clients get unstuck:

§ What is the basic foundation and business philosophy of your company?

§ Why are you in business?

The answer to these two questions will reconfirm or reestablish the reasons your business exists and provide a much needed guidepost. After you reconfirm or reestablish the reasons your business exists take the time to review your vision and values.

“A clear vision of the desired future state of the organization is an essential component of high performance.” - Tom Peters (writer and consultant on business management practices, best-known for, In Search of Excellence co-authored with Robert H. Waterman, Jr)

Creating a new normal requires reevaluating your vision of the desired state. Based on the changes in the current business climate, what will your organization look like in the future? The vision statement provides focus for everyone in the organization. An understanding of the vision provides the foundation for day-to-day decisions. A vision energizes action, toward a future that is better than today. How does your company’s vision need to change? There is one universal rule in success: you will never be greater than the vision that guides you. Perhaps for your organization, getting unstuck requires revitalizing your company’s vision.

In addition to a clear vision, a successful company needs to communicate values and principles by which they do business. Values represent your philosophy for achieving success and they serve as important guidelines for everyday behaviors and decisions. How have recent changes in the business world impacted your values and principles? What does your organization believe to be true and non-negotiable today?

“The purpose of an organization is to attract and maintain customers in order to generate profits and viability.” - Peter Drucker

Issues such as current customer’s expectations, product quality, and service should be taken into consideration in your values statement. Your values should take into account how you feel about and the value you place upon your customers, your employees, your suppliers and vendors, stockholders, the community and all others with whom you interact and do business.

Re-evaluating your vision and values are the first two steps to revisiting your strategic direction. We have found in these ever-changing times that strategic planning is no longer a discretionary decision, and it provides the impetus to getting unstuck. Create your business’s new normal by re-evaluating your strategic plan and implementing the critical success factors that will propel your business forward. There is a very high likelihood that what you are doing today and what you did yesterday will not produce the results you want to see tomorrow.

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Surya M Ganduri, PhD. PMP. is the founder and president of eMBC, Inc., an international firm specializing in strategic and executive leadership development processes that Help People Succeed in an Evolving World. His company is affiliated with Resource Associates Corporation, a network of 600+ associates that are dedicated to helping organizations and individuals manage strategic change, innovation, cultural transition, and goal achievement. Surya has over 26 years of business experience in management consulting, leadership development, executive coaching, process improvements, organizational development and youth leadership. Contact Surya at s6ganduri@eMBCinc.com. For more information visit www.eMBCinc.com or contact eMBC, Inc., directly at (630) 445-1321.