To collaborate effectively, you need to negotiateSep 15, 2022
In your solopreneurship or small business, the majority of your negotiations will be collaborative in nature. But don’t be fooled. It’s still a negotiation. Even though it may feel collaborative, you need to follow the process of negotiation to get what you actually want. Women often prefer to use the term collaboration over negotiation because, as they tell me, it seems “nicer” (and we have all been socialized to be nice girls). The big problem with calling a negotiation a collaboration is that your focus can easily deviate away from the reason that you are in that conversation. So rather than achieving what you had set out to, you walk away with less value (and often more work) than you deserve. The truth is, to collaborate successfully in your business, you also need to know how to negotiate effectively.
Let’s start with some definitions
A negotiation is where two or more people come together from different starting poitns and with different perspectives to create a mutually beneficial agreement. It assumes that you will each walk away with specific responsibilities or obligations. It assumes you have different strengths and priorities. And it assumes you want to establish a consistent way of working together where risks, rewards, and responsibilities are clearly outlined.
A collaboration is where two or more people work together to create something. It doesn’t define responsibilities. It doesn’t articulate each person’s priorities. And it does not provide clarity around how risks, rewards, and responsibilities will be shared.
So in short, a negotiation is about establishing how you will work together. A collaboration is the process of two brains coming together to create something new.
Negotiation and collaboration are complimentary
Negotiation and collaboration are mutually reinforcing and beneficial processes. But they are unique and they have distinct outcomes. So it’s important for you, as a business owner, to be able to identify whether you’re in a position where collaboration or negotiation is the next step.
The progression is not always linear. Sometimes you start with collaboration, go into a negotiation, and then come back to collaboration. In other circumstances, you might start with a negotiation and then go into collaborative work, using the terms you defined in the negotiation to help shape how you work together. In a third option, you might collaborate on a project, negotiate the terms, and never collaborate again; instead you'd deliver on the agreement.
For many entrepreneurs, especially solopreneurs who can benefit from collaborative work, you will go back and forth between the two processes. Let me give you an example. Over the past several months, I’ve been getting to know a fellow entrepreneur, Shana Robinson, through networking events and one on one “dreaming and scheming” conversations. We’ve realized that our approach to supporting female entrepreneurs is complimentary and that there’s an opportunity for us to deliver something (details TBD) that is the product of our collaboration.
Right now, we are in the collaboration stage. We are ideating, considering the challenges that entrepreneurs face, identifying the specific knowledge and skills we can bring to those problems, and dreaming up what the outcome might look like.
This stage could last an hour or a year (hopefully not). The most probable outcome is that we would develop a high level outline of a new creation that we would put out into the world. Now once we have this idea sketched out, it’s time for us to shift into negotiation.
Negotiation can still be collaborative
At some point, Shana and I are going to determine that we are ready to move forward and execute this creation together. But before we do that, we need to take steps to ensure that we both protect ourselves by putting in place an agreement that defines our responsibilities to one another, how we will execute the plan, and how we will share the revenue from the creation.
Even though we will likely be running a beta test on what we create, we still need to define those things in writing. At this stage, a formal contract would probably be a bit much. But to protect ourselves and our relationship, we need to have a critical conversation and take the time to document what we agree to. It doesn't need to be complicated; it's perfectly acceptable for that document to be an email back and forth, confirming the details of how we will move forward.
Negotiation is still negotiation
When we have that conversation, we will both take time beforehand to consider what each of us wants from the agreement, what we are willing to put into the creation, and how profits and expenses would be shared. It’s important we not confuse this stage with collaboration.
Just because we are working collaboratively doesn’t mean we should abandon our own personal interests. Establishing the terms of what each of us will take from the creation is essential to avoiding conflict later on.
So we will come to the negotiation, priorities in hand:
- We’ll have a conversation about what each of us is hoping for.
- We’ll ask each other hard questions.
- We’ll talk about what happens if things don’t go well.
- We’ll determine how the work will be split up.
- We’ll talk about the money we’re willing to put in at the front end.
- And we’ll talk about how we’ll split the revenue.
At the end, we’ll document what we agreed to, so that it can guide our ongoing collaborative work.
Negotiation often opens the door to more collaboration
Once we have our plan documented, we return to our collaborative process. Except now, we have an actual plan that will help us execute effectively. We'll know who is doing what, where we need to check in with one another, and where we have autonomy to move forward quickly.
Having this agreement in place reduces confusion and the potential for conflict. It will allow us to get back into our collaborative work with the comfort of knowing the difficult conversation is behind us. And it will allow us to move forward with confidence.
Skip the negotiation at your own risk
We’ve all heard horror stories of collaborations gone wrong. For example, what if:
- Your partner fails to execute the things you think they’re responsible for?
- The other person spends thousands of dollars more than you assumed would be necessary?
- They expect you to pay half of those costs out of your share of the profits?
- They don’t include your name or branding in marketing materials?
- They stop communicating with you?
These are just a few of the situations I've heard about in the last few weeks - you might want to think about your own experiences where expectations weren't met. How did it feel? What impacts did it have on your business? What might you have done differently to clarify those expectations upfront?
Negotiation makes your collaboration better
The great thing about operating like a business, is that, by having a negotiated agreement, collaborations can result in incredible opportunities:
- New sources of revenue
- Growth in audiences and followers
- Spin off opportunities that come from a well-executed creation
- A strong and collaborative relationship that can continue to generate new ideas and opportunities
Negotiation and collaboration aren’t twinsies; they’re besties
The next time you meet someone and have a discussion about collaboration, I want you to remember that collaboration and negotiation aren’t the same thing. Even though you can negotiate without a collaborative process, collaboration carries a lot of risks if it's not supported by negotiation. Of course, together, the two skills are a powerhouse that can drive the profits and opportunities in your business.
Are you ready to add negotiation to your collaborations? My Fearless Negotiation for Entrepreneurs course will help you build more powerful relationships, and start negotiating with confidence.