Peter Freeman, MPH
Public Health Strategist & Senior Advisor
As I said in our Collaboration Our Ideas article, because your business is predicated on relationships, your company needs to collaborate with a lot of people: staff, clients, vendors, and partners. A similar statement could be made about compromising.
Chances are you will have to make a compromise or two along the path to your company’s success. There are those that will tell you that compromising is killing your small business, while others want you to understand how to use compromise as a conflict management style. Entrepreneur.com has these handy seven steps on how to effectively compromise as a leader in business.
Understanding your relationship to compromise is important, regardless of whether you do it or not. So today we’ll talk about two components of compromise: the types of compromises you are making and how to respond once you’ve done it.
THE WS AND H OF COMPROMISE
There are lots of ways to compromise, but we think they can largely be boiled down to five types. We will use the 5 Ws and 1 H as a framework to understand the difference:
W #1: Who – Who are you as a company? Your brand identity is associated with the services you offer, the products you deliver, and the ways in which your business interacts with its community, employees, and stakeholders.
W #2: What – What do you do? The suite of services and products you deliver are defining data points of your business.
W #3: Where – Where do you do what you do? This is a combination of where your services and products are offered, as well as where you get the work done in making both come true.
W #4: When – When do your outputs matter? The timing of when your product needs to be finished or when a client is expecting you to complete a service significantly impacts the rest of your company’s operations.
W #5: Why –Why are you doing what you do? Your Vision and Mission (or other guiding principles) informs the answer to this question and probably drives many of your business’ day-to-day decisions.
H: How – How do you do what you do? The technology and resources and materials and intellectual property you require to deliver your goods are all components in getting you from concept to execution.
Before you agree to any compromise, you should have a clear understanding of the type of compromise you are making. By doing so, you are raising the likelihood that you will able to anticipate how that compromise will impact your company and what actions, if any, will be necessary to mitigate any potential interruption to your day-to-day (We’ll come back to those actions shortly).
With these types of compromises identified, the question for you becomes which, if any, are you willing to make and under what circumstances? This decision echoes recommendations we make as part of your negotiation tactic and we think it is imperative you also go into compromises knowing where you can and cannot budge.
RESPOND TO COMPROMISE
If you are on the concluding side of a compromise and you find you have conceded something you had not wanted to for the good of the deal, then this should be a point of action. That something need not always be a point you compromise on in the future. In fact, we recommend that it isn’t.
A compromise occurs when there is misalignment between the needs and wants of your company and whomever you are hoping to come to an agreement with. This can happen for numerous reasons. You may be trying to establish a relationship with the wrong partner. You may be working with the right partner but offering the wrong service. You may have the right partner and be providing the right product but operating under a model that is not conducive to your partner’s needs. Regardless of the why, a compromise ultimately ends with you giving up part of your business model, operational structure, or product for the greater good of an agreement. And this is where we think you should go into action: figuring out why.
Every component of how you operate and what you do that ends up on the cutting room floor as a result of compromise needs to be analyzed. Does not having access to that one data point significantly reduce your ability to track return on investment? How much more in personnel costs are you spending to follow that one additional workflow? Does leveraging your partner’s system, instead of your own, limit your ability to scale a product or service to other markets?
Sometimes what you have compromised on does not impact your performance one way or another. If that’s the case, you have to wonder why you are bringing it to the table in the first place. What does it add if you can do without it? On the flip side, sometimes the result of a compromise is a drastically new workflow or an overly burdensome productivity expectation. In these types of scenarios, the question becomes: How did you get there? What do you need to instill in your company to increase the likelihood that your operations, systems, and expectations are the ones that prevail?
What we’re saying, really, is this: Everything you bring to a negotiation should have a purpose in how you do what you do. The loss of it should have an effect, and you and your team should do what you can to ensure you either do not have to manage without it again or modify your company so it is no longer necessary.
THE TOOL OF COMPROMISE
There is a lot to consider when it comes to compromising, because compromising can happen in almost any facet of your business. That is why we do not think compromising is a bad thing; it is a necessity. And like all things related to your company, you must spend the time understanding its effects in order to successfully leverage it as a tool.