Most sellers understand it. Most buyers accept it, But most negotiators consistently fail to do it. The critical element in creating and delivering big value deals that drive growth, is investing in the right relationships. What kind of relationships should you, and could you, be building?
Competitive Relationship:
The distrust that results from adopting a competitive style inevitably constrains the size of any deal, as both parties limit conversations to the things they most want, and the areas where they have most leverage. A competitive relationship is about taking share of profit from the transaction, and is the right option whenever profitability or potential for growth is low.
Collaborative Relationship:
The very nature of a collaborative relationship encourages growth ideas. Often a deal simply rolls from one iteration to the next. Collaborative relationships have high fluidity, high trust and high value potential. They need mutual investment of time and energy to grow and maintain; they’re deeply rooted in openness and regular dialogue, and are easily destroyed by a badly timed competitive move.
Strategic Relationship:
Two parties share a vision, the value of which could be genuinely transformational. Usually it means starting small to test and build. But while the do-ers and deal-makers work on the “small”, the relationship owners must work just as hard on building, deepening and strengthening their commitment to the strategic relationship or, irrespective of the initial results, the real game-changing deals will always remain a pipe-dream.
BUILD RELATIONSHIPS: Wherever there are potentially profitable opportunities for significant or transformational growth
DON’T BUILD RELATIONSHIPS: For the sake of it. Prioritise a small number for genuinely collaborative and maybe one or two for strategic