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Zero Sum or Zero Some?

By Art van Bodegraven | 12/13/2009 | 9:19 AM

I traveled once again to the State of High Dudgeon this past week.  The impetus was a review of purchasing negotiation strategies as practiced by a respected Fortune 500 company.

The prescribed approach was a rigorous application of the principles outlined in Getting To Yes: Negotiating Without Giving In, by Roger Fisher and William Ury.  Good - even great - material in its time, but its time was 1981.  I struggle with the application of tools and tactics that are nearing 30 years of age, without honing, refining, and adapting them for the requirements of 1) a new century, and 2) a radically altered supply chain landscape.

While somewhat enlightened, in that the aim is merely to hobble, not cripple, the other party to negotiation, the core premise remains that the parties are still on opposite "sides."  This limitation severly inhibits the possibilities of what might otherwise be a collaborative - and winning - joint approach to the market.

Ultimately, the Getting To Yes model rests on a restricted (mis)understanding of game theory, as described in the breakthrough work, Theory Of Games And Economic Behavior, by John von Neumann and Oskar Morgenstern.  Too many people look only at the zero-sum element of this 1944 seminal work.  They see only the idea that one's gain can only come from the other's loss.

But, there are non-zero-sum games, as well, and there are models of coalitions that succeed.  These are much closer to the reality of modern supply chains.  Today, supply chain leaders and their key partners are on the same "side" in economic battles with other supply chains.  And, in fact, competing supply chains can both win in a non-zero-sum universe, with the better coalition simply winning more than its competitor.

Maybe the Getting To Yes thing more-or-less works for arms-length transactions with non-esssential commodity providers.  It seems to me to be a losing strategy for the long term when key product and service providers are kept on the other side of the table, and in the dark about where the future lies.  Another critical misunderstanding in this arena is that a longer purchasing contract isn't remotely close to being a long-term relationship, with all the power and value-add the term implies.

What do you think?  Are you locked in a zero-sum game?

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About Art van Bodegraven

Art van Bodegraven

Art van Bodegraven (1939 - 2017) was Managing Principal of the van Bodegraven Associates consultancy and Founding Principal of Discovery Executive Services, which develops and delivers supply chain educational programs. He was formerly Chair of the Supply Chain Group AG, Partner at The Progress Group LLC, Development Executive at CSCMP, Practice Leader with S4 Consulting, and a Managing Director in Coopers & Lybrand's consulting practice. Concentrating in supply chain management and logistics for over 20 years in his 50+ year business career, he has led ground-breaking strategic, operational, and educational projects for leading US and global clients. Art was principal co-author of DC Velocity's Basic Training monthly column for a decade, and was the principal co-author, with Ken Ackerman, of Fundamentals of Supply Chain Management, the definitive primer in the field. His popular blog, The Art of Art, has been a staple of DC Velocity's web site since its inception.



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