Fairness As Sword; Fairness As Shield

Last time I explored the power of fairness in conflict resolution. Today I have my sword and shield to discuss how we employ it.

First, an illustrative story:

I was recently asked to help a professional services firm, which I’ll call PeachTree, negotiate their fee with their biggest client. The PeachTree partner and her staff worked full-time for the client, and the client considered her a key part of their top team.

But when PeachTree quoted their fee for the upcoming year, which included a modest increase for inflation, the client pushed back. They claimed they were having a tough year, they couldn’t justify the expense, even that PeachTree’s yearly fee for the partner’s work was greater than the salary of some of their c-suite people.

To employ fairness when you disagree, first identify objective, independent criteria that both you and your counterparts might consider fair: Things like market value, relevant laws, past practice, industry standards and precedents. We call these fair or “legitimate” standards.

And that’s what we did. The fact that the client had paid a comparable fee to PeachTree for years was one such standard. To find another, we used our network to survey corporations who had teams providing similar services internally. As it turned out, if anything, PeachTree was a deal: There was no way the client was going to be able to replicate the services PeachTree provided for less money. We created a spreadsheet of this data for the client’s benefit.

Once we have standards we like—and this comes right from the classic Getting to Yes—we can use them as a sword to assert ourselves as in this example:

“We want to come up with something fair. Of course this fee is virtually identical to what you’ve paid us for years. We’ve also done some research and found out that it’s in line and in some cases even less than teams who do this work internally for similar companies. Take a look at this…”

Or as a shield to defend ourselves from unfair demands of our counterpart as in this example:

“We’ve appreciated our long term relationship and feel we’ve created great value here. Given what we’ve showed you, help me understand how reducing our fee at this point is fair? We can’t continue to work with you otherwise.”

Engaging your counterpart in a search for a solution that’s fair is very hard to resist.

With PeachTree, because our standards were compelling (and also because their alternatives were weak…see an earlier post about this), the client paid PeachTree’s fee without further discussion after the meeting.

Of course, what’s “fair” is in the eye of the beholder, and we may have to negotiate over which fair criteria are most relevant and acceptable.

But deciding that is easier than negotiating over our position vs. theirs, our arbitrary number vs. their figure.

Try this out and let me know how it goes.