What is a Win-Win Situation?
Win-Win Situation: acting together, profiting from each other
Why do people make contracts? Why do organisations cooperate? And why do companies form consortia? Because people, organisations and companies expect benefits. In general terms, win-win refers to a situation in which all parties gain more benefit from an agreement reached than without an agreement.
The special thing about a win-win situation is that it is not just any contract of sale and not a declaration of intent. It is a cooperative approach and the conscious acceptance that all parties involved benefit from working together. In other words: For all parties, the individual benefit is greater than the individual cost. Each party benefits.
Examples of win-win situations
There are large and small examples of win-win situations. Here you can find some examples:
- Eco systems provide interfaces, companies develop apps or extensions for these platforms, users buy the apps – everybody wins.
- Bidding consortia bundle competences in order to participate in tenders together and, in case of success, to provide the required services. The client receives the required competencies in the defined scope and time frame, and only has to communicate with one central contact person, receives only one joint invoice instead of many individual invoices from the individual companies, etc. All parties win.
- A company has no budget for a required service, a freelancer has not enough references on his website. The freeclancer provides the service and receives a benevolent reference in exchange. For both parties the cooperation is beneficial.
- You have too little space in your basement and a bicycle you have not ridden for many years. The growing son of a friend needs a new bike. You give your bicycle to the father, who gives it to his son and from now on you have more space in the cellar.
You can probably easily imagine many more examples. But you might also be critical of the examples, because programming apps for eco-systems or working in a consortium creates dependencies. The freelancer provides his services free of charge, so he might be exploited. And the bike might have the wrong color and the son may not like it. This leads to three conclusions:
- The assessment of whether it’s a win-win situation must be made by those involved.
- The benefit can be greater for one party than for the other.
- Only if it really is a win-win situation is there a chance that the parties involved will continue to try to cooperate with each other and “do business” in the future.
Conditions and advantages of the win-win strategy
The term “win-win situation” goes back to a research project at Harvard University in the 1970s. In the course of the “Havard Negotiation Project”, negotiation methods were examined and optimised. The result of the project was the so-called “win-win strategy” – also known as the Harvard concept or double win strategy. This concept focused on “proper negotiation” in which the parties involved in a negotiation situation each achieve a profit by reaching an agreement.
The following conditions apply to the win-win strategy:
- The parties are able to adopt the perspective of the other party.
- The parties not only have the individual advantage, but also a real advantage of the other party in mind.
- The parties know that it is not about winning and losing, but about winning and winning.
- The parties know that it is not about the position of the strongest and also not about maximising profits, but about the advantages of cooperation that both sides want to realise.
- The parties know that they are mutually responsible for the interests of the other party.
If they succeed in putting this double win strategy into practice, there are several advantages:
- The basis for a trustful cooperation has been laid.
- Opportunities for open and honest communication are given.
- There is the option for further, future cooperation.
One very practical advantage is often overlooked: by working together to benefit from each other, work becomes more pleasant and difficult situations can be avoided or at least eliminated. For this reason alone it is desirable to strive for a win-win situation.
Impulse to discuss:
A win-win situation for companies that are not yet cooperating with each other is difficult to agree upon. The proposal of one party to strive for this situation means an advantage for the other party in the negotiations.
A no-win situation, also called a “lose-lose situation”, is by the way a situation in which a person has several options but no option leads to a net gain.
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