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A few years ago, in a previous role, I was brought in to do some consultancy work with a company that was attempting to build long-term relationships with well-established firms in their market. They’d been doing several deals over the few years prior but always felt that they weren’t getting lucrative deals or developing their relationships. It was evident that they hadn’t attended a Scotwork negotiation training course!
As I reviewed their previous deals, they were littered with dare I say it ‘goodwill gestures’. Free concessions that they’d been shovelling out to these large firms in the belief that these goodwill gestures would build up a bank of ‘favour’ or ‘credit’ towards them. Reviewing the deals, it felt as if these larger, more established firms had opened a big bag and swept up unbelievable volumes of free concessions. However, when this company attempted to extract from that ‘Goodwill bank’, the bank was firmly closed or there seemed to be no funds of goodwill coming from the other party. So how could they turn it around after establishing this dynamic over a long period of time?
During internal meetings, I heard the team argue how these goodwill gestures ‘hadn’t really cost them anything ‘. I was told repeatedly that they were ‘free items/data anyway’ and the repeated question ‘What else were we expected to do?’
We had to take the time to talk about how valuable all these goodwill gestures were to the other party. It took a while to shift the mindset. It’s not about how easy it is to give, but how valuable it is to the other party. We explored how they might have traded that value for something they valued in return. Linking conditions with the concessions would have enabled them to get tangible value from the agreements and taught the other party to trade with them and take them seriously as negotiators. It was an uncomfortable but ultimately rewarding change. Soon many more doors were being opened and the goodwill bank became a distant memory for all. They started bargaining and trading value, always keeping in mind the question ‘How valuable is this to the other party?’
