There are certainly circumstances where a win-lose situation is expected (i.e., board games, sports, award shows, elections). However, this “one winner only” mindset has seeped into other aspects of our lives where it does not belong. We’ve been taught to think it’s always all or nothing, but we need to learn how to search for opportunities to create win-win situations to truly optimize success.
We see it all the time and may even experience it ourselves—the idea that one person getting ahead is somehow detrimental to our own success. We see people holding each other back instead of helping each other. In reality, there’s usually room for everyone to succeed and it’s often easier when all parties work together to create that win-win.
How do we go about cooperating to create the win-win?
It is well proven that tactics like collaboration, trust, and listening work better in decision making than dictating, lecturing, and proclaiming false expertise. This is based on extensive research supporting the idea that people don’t change unless they believe in it. So, when given the opportunity to argue your case, try to emphasize the benefits for the other party. If you can make them see the positives they’ll reap in the compromise, you’re more likely to convert them. Thus, the most productive strategy when collaborating is to increase the value of the outcome for all parties.
Understanding perceptions is critical in understanding outcomes. The best example is the statement, “the stock market is like going to the casino.” It’s simply not true. While there is significant fluctuation, the S&P 500 has increased about 10% annually over the last ten years. That means if you purchase even a random stock, your value will increase on average about 10%. In contrast, the casino takes a percentage of the bet so that it is a true zero-sum game. While some betters win and others lose, especially in the short-term, the casino always wins in the long-term. Therefore, make sure you fully understand all terms of an agreement.
Selfishness can also make it difficult to increase value or develop a win-win situation. What are the goals of a strategy or a program? Bias, defensiveness, denial, and tradition can all inhibit the development of the best solution for the organization. Similarly, short-term focus can inhibit long-term effectiveness.
Do we understand our risk in a situation? When can we and when should we pursue “out of the box” solutions rather than the most probable outcome? Decisions and risk are also greatly affected by probability and information. There is a huge difference in predicting results when there is significant and consistent historical data. However, predicting results for new programs or with little or inconsistent data becomes much more difficult. Knowing information can greatly benefit one party in a win-lose situation while sharing information can frequently maximize benefits for all parties.
Value can also increase by providing different costs and benefits for the buyer and sellers. Most retail transactions provide mutual gains by providing benefits for the buyer and seller. Issues like service and quality can also increase the long-term value and satisfaction of the customer. I have relatively expensive car and home repair service providers, but they offer maintenance, quick service, reliable availability, and excellent results. Being able to quickly repair a car that breaks down or restoring a broken heater in the winter has significant value to me.
Listening is a great collaboration tool that can lead to mutual benefits that increase the value of a transaction. Many organizations are debating the effectiveness of working from home versus in office after the pandemic. Convenience, commuting time, cost, and freedom all favor working from home. Communication, interaction, and less distractions seem to favor working in the office. Much of the discussion seems to argue one side or the other rather than trying to understand the parameters and develop maximum effectiveness. For example, if much of a worker’s interaction is international or with multiple offices, working from home has great advantages. In contrast, if much of the work is sequential or in groups, working in an office may be critical.
Make it a priority to review alternatives and probabilities—this is extremely useful for all parties. For example, there are lots of alternatives to automated calls about credit card debt as most robot calls are really expensive if you purchase them. It’s a lose-lose to spend a lot of money on something that only annoys people and isn’t very effective. Similarly, couples that decide to split up should examine their specific needs as contested divorces mostly benefit lawyers.
Collaboration and win-win solutions can sometimes be muddled by compromise. In many cases, compromise can be lose-lose because neither party really benefits and both may feel like they lost. It is important to recognize the difference between collaborating to benefit both parties versus both parties taking a loss or enduring pain.
In certain situations, coaching and mentoring can be great tools to adjust the structure of relationships and decisions. Assuming credibility and trust are established, coaches can provide advice without fear of resentment or bias. The client still maintains control of the situation because they can accept or reject the input. This support tool is meant to shape behavior and building confidence. The technical aspects of advice are important, but absolutely secondary to the need to help manage the total situation.
What about situations where win-win isn’t possible?
How do you collaborate in a zero-sum game? Collaboration assumes some mutual goals, which may or may not exist. Winning or losing a game, election, or bet are clearly win-lose situations. But this situation can change if the parameters change. I played high school football for a small private school. We practiced against one of the better large public-school teams. Our team got killed, but we got more out of it because we were better prepared for the regular teams we played. Sometimes the “win” for the loser is what you take away from the experience—that can be a lesson, practice, or the chance to test out a new strategy.
Expertise can also be a difficult issue to incorporate into a collaborative environment. We frequently rely (without question) on services and recommendations from people in healthcare or IT. How many times do we even question a doctor about alternative remedies? When possible, doing your own research is useful, but you also need to recognize when to accept an expert’s advice.
Win-win can be affected by organizational tradition and structure as well. Many large companies have tunnel vision, organizational constraints, and ignore emerging technologies and possibilities. They lack the flexibility to respond to the needs of the market and rely on the use of outdated solutions to deal with new opportunities. They fail to allow the vision, entrepreneurship, and risk necessary to succeed.
In general, I recommend more consideration of a collaborative process to develop more win-win situations. When given a chance to compromise, consider these questions: How good is our information? Are we analyzing alternatives? What are the consequences of mistakes and how much risk can we afford? I believe that (with the exception of issues like safety) we can afford more risk to increase the potential of our decisions—and those risks should be focused on creating win-win situations.
Related: Avoid Failure When Selecting Financial Alternatives