Kate Vitasek: "Stop negotiating, turn around and align interests."

Kate, thanks for joining us today.

Well, thanks for having me.

Yes, it is our pleasure. So how would you get us started? By telling us a little bit about yourself and what you do.

Well, I'm on the faculty at the University of Tennessee, so far, far away from that red stuff. And I noticed you're sporting a little orange there. This must have been really hard for you, Kwame. Right. But I have to bow down to the Ohio State football team. Y' all slayed it. But bottom line is I'm on the faculty at the University of Tennessee. I'm in the College of Business, and within that, I'm in supply chain. And within that, if you continue to layer down the onion, I specialize in highly collaborative win win business relationships.

You have such a unique approach to difficult conversations and negotiations, and it's a really. It's a real paradigm shift. So when it comes to your approach to negotiation, what is your big idea?

Well, actually, if you're collaborating and you've aligned interest, you shouldn't be negotiating at all. Right? So the sign that you have to feel like you're negotiating means that you. You aren't on the same page. So stop negotiating, turn around and align interest.

This is beautiful. And I. It's really a record scratch because we always think about negotiation as a battle, like a war. And for us at the American Negotiation Institute, one of the things we've always wanted to do is redefine negotiation to be more collaborative. And you've taken it to a whole different level by saying, we don't even need to negotiate if we collaborate well. And the thing is, you've done this at the highest levels, so this is just not some kind of academic exercise. You've done this in the real world with real businesses, and you have. You've produced, what, eight books now on the topic? So let's talk about first how you came up with this approach, and then let's tell a story about it, because I think that'll really bring it all together.

Awesome. Well, before joining the University of Tennessee in 2003, I was actually a practitioner. So I worked at Microsoft. I worked at Microsoft's largest supplier at the time. So I had been in the trenches doing these big negotiations. And so when you have a big deal at stake, especially with lots of zeros, our egos get involved. Right? We want to win. And we're taught, you know, we're taught getting to yes. And so but the problem is when we get to yes, you're. You're still have one orange. Right? So if you think about the. The orange story and Fisher and Yuri's getting to. Yes, you know, win, win is when you get the pulp and I get the pill. But sometimes we really want the same thing. And so we're not having a discussion to figure out how we can grow more oranges. And that really, that's what vested does, is it seeks to align interest. So there's five steps in the vested methodology, and we get the term, the name vested, because when you are vested in my success and I am vested in your success, we really can align interest. And so you should be seeking business partners that you want to have a vested interest in. Now, sometimes you may have to end up negotiating because you're with a partner that you really don't want to work with. But I wouldn't call them a partner then. Right. So that's a different category. But all too often we say strategic partner, and we're turn around and negotiate. And we shouldn't be negotiating at all. We should be collaborating and aligning interest.

This is so incredible and so powerful, too. And listeners, I don't want you to overlook the brilliance of the metaphor of the orange. And some of you might be saying, well, she's a Tennessee volunteer. She's talking about her school colors. Well, no, we're talking about the fruit orange. In a classic negotiation story where there's a son saying, I want the last orange in the house, and the daughter says, no, I want the last orange in the house. The mother, of course, cuts the orange in half, and then the son uses the. Eats the pulp in, like, the traditional way. And then the daughter uses the rind to create a cake. And so they would have talked about their interest. They could have gotten 100% of what they wanted. So it's a really nice story, but you've taken it to the next level because you're saying, the problem is, we have one orange. Can we work together to make more so we could have more abundance? I think this is fascinating, and I know you have a really great story that was featured in the Harvard Business Review that really shows how you can put this process into action in a realistic situation with extremely high stakes and a lot of zeros attached to it. So can you tell the listeners that story, too?

Yeah, actually, we have a lot of stories, but I like this one because they were really stuck in a negotiation rut. Right. And so it is the Canadian government and one of their health authorities, Island Health Authority on the west coast of Canada and their doctors. So South Island Hospital. So is a collective Group of their hospitalists. Now, hospitalists are very specialized doctors that are kind of like general practitioners in a hospital setting. So they care for the most serious patients that are very complex. So they kind of get assigned this. This general generalist who's a specialist in being a generalist, who then works with all the real specialists. And so their contract was out of. Had. Had expired, and they just could not get to a new contract. And it was very frustrating. Actually, one of the things that we did, we did a compatibility and trust assessment just to take the trust levels, because we use that as education and information to help people break out of the cycle. So we gave them this trust score. Right. And of course, they knew they didn't have much trust. Right. But it's shocking when you start to unpack that and you can see why you don't have trust. And, Kwame, whose fault is it that we don't have trust? You know, is it your fault or my fault?

I think blame could go both ways. But the way I often think about it is like, I want to accept responsibility, because if I accept responsibility, then I can be part of the solution.

Yeah, but often when we're in the heat of the battle, you want to blame.

Yeah, that's for sure. That is for sure.

Another guy. You know, we're not thinking rationally that we should have a different conversation. And why can't we get to this negotiation? Why can't we get to our contract? And so we should. We're. Our interests aren't aligned. So we started with a compatibility and trust assessment. And it gives them a quantified score. It looks at five dimensions of why they're not trusting. And then in the end, it puts up adjectives. So we make a word cloud out of the words that they use to describe the relationship. So they add words like toxic, opaque, distrustful, bullying. Right. And so the more we use our power, that could be perceived as being bullying, Right? Well, if you're bullying to me, I'm probably going to shut down. Right. So it creates this tit for tat. And so 85% of their adjectives were negative. This was not a good place. So they're trying to get to a contract. No wonder they can't get to a contract. They hate each other. But is it the other guy they hate, or is it the fact that they've gone in this negotiation cycle that's pent up all this negative energy, and they just need to have a different approach? And that's what we do, is we have the five rules. And so you start not with negotiation, but you start by taking a step back and saying, why? Why aren't we trustful? Why are we opaque? Should we be opaque? What's the benefit of transparency? And so talking about transparency and the benefit of transparency and what would they like to be transparent about? Well, if only you did shared with this with me and what? Well, I would like X. And so by understanding what you will be transparent about now, you can open up the envelope and have better discussions. Right. So that's one of the very first things that we do in step one is lay the foundation. So we want to lay the foundation for trust, transparency and cultural fit. And so we do do in the compatibility and trust assessment, we do look at cultural fit. They had a high degree of cultural fitness, but a very low degree of trust and a very low degree of transparency. So even though they were capable of working together, they didn't teach themselves how. Right. So we start with that and once they get past that and they say, all right, I'm going to choose to trust, we're going to go in and we're going to tackle this negotiation with a mindset of transparency, we're going to choose to trust. And when you don't have trust, right, you're like, oh, how do I do that? So it's almost like this leap of faith. But I remember Dr. Gene Masky said after the first half day of that workshop and we were talking about lack of trust and lack of transparency and why they lacked trust, what were some of the actions they had taken. And so those actions, when you're in a workshop and you take a step, you're like, oh yeah, that wasn't a very good action, was it? That that could be perceived as bullying. Yeah, yeah, I guess that wasn't so smart to do. Right. And so they got to reflect on how they got there and they realized that that wasn't where they wanted to be, so they chose to trust. And so Jean Maskey said she left that workshop the first day. It was a three day workshop. And she said, you know, if you, you know, when you look at it, we were so stuck trying to negotiate that what was, you know, there was, there was no loss if we tried a different approach, like when we're already so stuck, why not just try? And so what we tell people is like if you get out of the gate and the methodology is not working for you, you can always go back to your old way. You can always go back to that toxic, non transparent bullying way. But we're going to try and we're going to use collaboration. So they're then taught the tools of collaboration, taught the tools of transparency.

Hello my friends. Before we get back to today's episode, I want to ask you a question. Have you ever wondered how to elevate your team's negotiation game and how you can help the folks on your team have better difficult conversations? At the American Negotiation Institute we we offer transformative keynotes and workshops tailored to empower professionals with top tier negotiation and conflict resolution skills. Whether it's a keynote for your next event or hands on training for your team, we've got you covered. Don't just negotiate. Master the art with the American Negotiation Institute. Click the link in the description to find out more. Elevate, negotiate and succeed. I think it's brilliant. I think it's brilliant and also terrifying because attorneys are terrified of doing something new. It's not really a profession that values creativity in the way that we would think about it in other professions. We value precedent, we value consistency and things like that. So even taking the perceived risk of stepping out and putting something into your contract can be really scary. And I know recently like probably in the last few years as I cause I still practice a wee bit, I started to feel a lot more comfortable putting those things in because what's the court going to like? There's no risk. There's no risk, you know, because if you just put it in there and people sign and agree and say yes, we will treat each other with respect, respect defined in this type of way, those types of things, it really makes it a lot more concrete. And, and then when you tie it to Cialdini's principles of influence, we have commitment and consistency as well. So it makes the, the, the contract significantly more self enforcing because you can look at the contract not just as a sword or a shield, but also a guiding light for how to interact on a more human level as well.

So that, that is the first negotiation that they do is to negotiate the intent of the relationship. So then they're going to actually start to work on negotiating the deal points, the actual agreement.

And it sounds like in most of these negotiations we're starting at the wrong spot. We're starting essentially at the end of the process where we're talking about the deal terms. But what we're seeing with your vested method there are so many more steps that you have to do before getting to that point where, where most people typically start.

Exactly. They've never laid the foundation, they don't understand the intent, they're never on the same page before they get out of the gate. Right? Or if you had, you know, a strategic partnership and somebody said something on the back of a napkin, oh, well, this is a great, this would be a great thing to do with the supplier. Let me run that through the procurement process. Let me run it through. And so what starts out as this really wonderful solution has gone through and, and what's in the contract itself is not the intention of what the business people set out to do. And so it's no wonder that they start to negotiate because this isn't what they had in mind. Right. It's the, it's, it's in every little negotiation and trade off and concession is a step that pulls them apart. So they're actually getting pulled apart versus being pulled hold together.

Okay? And so now the listeners are excited to know after this entire process, what were the results?

Well, it's interesting, sir, you know the thing I like, there's tangible results and there's intangible results. But I want to talk about the intangible results because they lead to the tangible results. Remember Those negative adjectives? 85% toxic, bullying, opaque, distressful. 18 months later, 86% positive. Collaborative, trusting. Win, win. Right. And so when you choose to focus on the health of the relationship and align interest, then good things can happen. So when they came to us, they were in the news for bad, you know, bad reasons. They can't get to a contract. It's like, you know, they're literally, their lack of contract negotiations were just like you have here in the United States, you know, General Motors and the auto workers or the longshoremen, you know, in the ports. It's in the news. This is not good, right? 18 months later, you know, they're in the news for innovating. How cool is that? They, for the first time ever met the budget, they beat the budget. So the results were spectacular. Every two years we go and do a relationship health check and the relationship continues to be amazing. And one of the clauses that we put in the contract we teach people is why, you know, especially in a contract like Island Health and the doctors, it's not like there's lots of other suppliers that the Canadian government can go to. And if you're a doctor, you can't really go work for someone besides the Canadian government. So this is ultimate lock in, right? They have to do business with each other. And so we teach people, why do you have this false contract expiration when your intent is to work together and collaborate to drive value and Better patient care. Why are we falsely contract expiring? So why don't we have an earned evergreen? So we intend to extend the contract. And so now it's a more collaborative, frequent way of working instead of like, oh, contract expires, oh, I have to negotiate. So that whole mentality with that one simple clause, an earned. An earned evergreen. We intend to work. As long as we're working collaboratively, we're going to come back. Yeah, we have to rethink the money. We may have to rethink the desired outcomes that we're working on because we solve those desired outcomes. So you have to rethink the deal points. But it's a collaborative negotiation that happens or a collaborative process that happens rather than this negotiation on the contract. We have a contract. We're just going to refresh it with what we need to refresh.

It's brilliant, it's. And again, it's so novel in its approach. But the results, both intangible and tangible are they speak for themselves. And that, that shows the strength of the process. So let's set the stage because the vested model is really unique because again, it's not like a negotiation strategy. It is a brand new approach to collaboration. But both people need to be okay and open to using this. And I think the listeners would find it interesting to understand how you got to this position, to be working with both sides in this. Because typically when you have somebody who is with your background, one of the sides says, hey listen, I am going to bring in a negotiation mercenary to help me to beat you in this negotiation. So how did they get you or feel comfortable having you in between both of them working through this collaborative model?

The Canadian government actually had me come up and it hosted a little workshop, an educational workshop. And Kim Krohn was the chief financial officer, chief legal officer. And she had heard, she had went to that, that little education workshop. It was like a half day training session. And so she came up and said, I have a deal that I am stuck. And she goes, can you, would you mind meeting and having dinner with myself and our attorney? And I was in town because I was doing some other training for them and I said, sure, no problem. And so we went through. And she goes, I am so stuck. We literally haven't been able to get to a contract in two years where we're at our wits end. And it's just, you know, using words like it's toxic, it's, you know, it's opaque. And I'm like, well, no wonder you can't get to negotiation, your behaviors prevent you. How do you think they feel? And so she goes, yeah, but I'm afraid the doctors are never going to go for this. And I said, well, just introduce them and say, you heard this interesting lecture. This, you know, this academic, you know, professor, come up with this crazy idea and just let me talk to them. So I get on the call with them without, you know, island health, and they're. And because they thought the administrators were trying to pull one over on them. Like, what are you trying to do? You're trying to go, look, I have no skin in the game. I'm just a teacher, right? So if you want me to teach you an alternative, I'm happy to do that, but it would be best if you're both in the room together learning that alternative. And then you can decide if you want to take an alternative path or if you want to stay on the path you're on. I don't care. You can stay, but obviously you hate it or you can try something different. So let's do a three day training workshop. We're going to start. You know, you'll learn the methodology, but you're also going to learn about yourself. So we did the compatibility and trust assessment, we did the contract review. Right? Because they didn't realize. They did know, but they didn't know. My behaviors create an environment that makes it very difficult to get to this negotiation.

Hmm.

Then you need to change your behaviors. My contract clauses create bad behaviors, perverse incentives. Then I guess some of these contract clauses need to go. Right? So what we do is just like in negotiation, when you have a dispute, you would have a mediator or an arbitrator eventually go to the courts, right? Well, that's an outsider. And so we suggest having a deal architect coach. So at the University of Tennessee, we actually train these coaches. It's called certified deal architect. And so we're training people in the methodology. And, and so I went in as a, as a, as a professor, as a faculty member to do some education, but brought a boutique consulting firm who specializes in the vested methodology. And then we together did the three day alignment workshop. And so what we tell them is that at the end of three days, you can, you can choose to go back to your old way. You do not have to. To. To. You don't have to continue.

Right.

And so they actually, at the end, they said, you know what, A new day, a new way. That became their mantra. We're choosing to go down a vested path instead of go down the negotiation path. That we have historically done. Yeah.

And I think the framing and autonomy, those two characteristics, are really standing out to me, Kate, because you're not framing yourself as a negotiation expert, because then that creates the bias in people's minds, oh, it's me versus you type of thing. As a negotiation, you have to pick sides. But then even as a mediator, and this is me speaking as somebody who has done mediations as a mediator and believe strongly in the process, people are still terrified of mediation. It might not be court, but it's still scary and they still see it as a conflict, too. So again, we're still triggering the us versus them type of bias that you have to work through as a mediator, but by framing it differently now, there's no bias associated with it. You're saying, hey, listen, I'm a professor, I've got no skin in the game here. I'm just trying to teach you something. I'm not trying to push you to do anything. And you still have a choice. You don't have to do anything. You can see this way and say, hey, you know what? The security blanket of aggressive negotiations that I have before, I'm going to stick to that. You can do that. And I think that also makes people a little bit more bought in because you're giving them the respect of showing them choice, which often counterintuitively makes them more likely to do what it is that you ultimately want them to do. Kate, interesting question for you, because we can see how this works with big business deals, but it seems like if individuals, maybe within a relationship or friendship or even maybe at work with a colleague, it seems like we can take some of the essential elements of this process and put it into play with our interpersonal relationships, too. Hypothetically, what could something like that look like?

Yeah, actually, it's fun you're asking that because people observe that all the time and they'll say, oh, I use this in my personal life, but we're actually writing my ninth book on this to say how you can actually do use some of these tools to do that. So think about that statement of intent. You're going to get married, right? So you have this relate. You're thinking about dating. Do you get married? Why wouldn't you have a statement of intent for your relationship? And so one of my beefs is that I have a couple of friends who've gotten married and one of the people did not want kids and one wanted kids. And I was like, why didn't you talk about this beforehand? Because that's a guardrail, like, don't get married and then go, oh, I want kids. I didn't want kids. I didn't know you like, seriously. So think about your statement of intent. Think about your guardrails. And if there's not compatibility there, then you might love each other short term, but long term, it's not going to work out. Right. We teach governance. So in the, in the deal itself, there's governance and how you're working together to continue online, interest, those kinds of things, you know, transparency, those can all be translated into any relationship. And we have had small business deals. So for example, there's a small $5 million contract manufacturer in Oregon, Megatech Oregon. And so we profiled them. He came to our class, actually, and he goes, Kate, I'm $5 million. This is like, these deals don't have lots of zeros behind them. And he said, well, what can I take just to start working in a different way? And he doubled his revenue and he doubled his profitability by adopting a philosophy.

Incredible. And I think that's very inspiring and encouraging for the folks who are listening too, because this model is powerful. And even if it's not a multi, multi million dollar deal, we can still take some of these elements and put it into practice with our difficult conversations that we're having every day. And I know we're coming up on time here too, Kate. So before you go, I wanted to give you an opportunity to, to say one parting piece of advice for the listeners. If they want to take everything that they learned today and put it into practice. What would you say is the first step?

If you find yourself frustrated over a negotiation, your interests aren't aligned, stop and focus on collaborating, true collaboration to align interest.

Amazing. Thank you so much for joining us, Kate. This has been fantastic. And then let's give a shout out for your most recent book and how folks can get in touch with you.

Yeah. So my most recent book, Ironically I'm a Supply Chain professor, was published by the American Bar Association. I am not a lawyer, but it's called Preventing the Dispute before it Begins and how to use proven methodologies to help you prevent disputes and foster better business relationships. Because a lot of what we can do, if you do these things up front, you don't ever get to a dispute. And so I want to shout out, you know, I'm not the only author on here. We actually had a law school professor and two attorneys, all three attorneys, actually, but one was a former law school professor now at cpr. And so, you know, I'M really excited to see that the American Bar association is still starting to think and open their eyes to more collaborative approaches that keeps you out of disputes.

So amazing. Kate, thank you so much for joining us. Really appreciate it. Congratulations. You've just joined an elite club by listening to a full episode. You're now officially on the Negotiate Anything team. So welcome aboard. What most team members do is they subscribe to the podcast because that allows them to automatically get the latest episodes of the show. The best things in life lie on the other side of difficult conversations. Keep learning, keep practicing, and keep getting better. Your relationships will improve, your career will soar, and you'll have the confidence you need to get the most out of these crucial conversations. Again, thank you for joining the team. We're excited to have you, and I will see you in the next episode. I'll catch you later.