Lower Anxiety From Collaboration & Business Relationships

How can we work more collaboratively with our colleagues, vendors and others in business? Hello, I'm Chester Elton and with me is my dear friend and co-author, Adrian Gostick. Our guest today is going to explain how the best collaborations work and what we can do to build more mutually beneficial relationships that are going to help us reduce anxiety and build our success. As always we hope the time you spend with us will help reduce the stigma of anxiety at work and in your personal life. And with us is our new friend Kate Vytasek. She's an international authority on art, science, and the practice of highly collaborative business relationships. She's the leader of the University of Tennessee's research on strategic partnerships and developed UT's certified deal architect program. Her vested business model for highly collaborative relationships has been the subject of seven books and countless articles in the Harvard Business Review, Chief Executive Magazine, Forbes, and Journal of Commerce. University of Tennessee, go Vols! Kate, we're delighted to have you here on the podcast. Go Vols! And I need that for the upcoming playoffs. We need all the energy we can get pointing into the color of orange. Now you're only playing Ohio State. How hard can that be? Hey, we're thrilled to have you on the show, Kate. I'll start with this idea, the vested way. And for those of you, we're not showing our video, but Kate behind her has all these books with the big word vested on there. Explain that concept, you know, and the big concept of your work and your books. Well, great. Well, the word vested really has a lot of meaning behind it. Think about it. You're invested in someone else's success. You know, I invest in you. A win for me is a win for you. Investment ROI, so long-term. So when we say the word vested or vested relationships, it's really about strategic business relationships that are win-win. A win for the buyer is a win for the supplier and vice versa. And what that does is it creates an alignment of interest. So the buyer and supplier aren't sitting across from each other negotiating, in it like in a typical negotiation or trade-off when you've got to deal with lots of zeros behind it, but instead are seeking to align interest. And that may sound simple, but it's hard, but it's very powerful because when I'm aligning interest, our goals are aligned and I'm not negotiating. It's not us versus you. It is truly, it changes from a what's in it for me mindset to a what's in it for we mindset. You know, because we've, you know, Chester and I, we do some work with lots of different organizations. And I remember working with one big retailer that I won't mention their name, but by the time we were done through the negotiations, we felt like we, you know, it's like, yeah, we'll go do the work, but we didn't even want to by that point. We were so beaten up, felt like our work really wasn't valued. We went from a value of, you know, say 100 down to 20 by all this. And they were quite proud of their ability to negotiate, but it wasn't a win-win, I didn't feel, by the end. Yeah, you know, and this is exactly what happens, is we go into these relationships and we say strategic partner, but by the time we get done with the negotiations, we're worn out. And so you don't give it your best. It creates anxiety in how you're working in entering in that negotiation, but that anxiety stays with you long after while you have to show up and do the work. It's no longer fun. I'm not excited to work for you. Exactly. You know, you talk about, actually, one of the things you write about really well is this trusted relationship and vested relationship with your suppliers. And that's a group I don't think gets a lot of love these days. So, you know, why did you make that a focal point of your book? Well, that's really my background is in supply chain management. So I've been on the buyer side. I used to work for Microsoft and then I worked for Microsoft's largest supplier. And I've also been on the consulting side. So being in those buyer-supplier relationships, you can feel the tension that you have. Even in a good relationship, sometimes you're left with a Dilbert cartoon, right? And it just, you're not leaning in and giving it your all. So when the university called me and they had a really large research project that was funded by the Department of Defense and United States Air Force, I jumped at this opportunity in 2003 because I had lived these relationships. I'd lived great relationships, and I've lived a lot of good ones, and I've lived some bad ones. And so is there a way that we could teach people how to have great relationships? And wouldn't that not only make you feel better about it, but it would generate better results? I love that idea. One of the things, and your work spans a lot of different ideas, Kate, which I really appreciate, because by the time, we've been doing this for 25 years, and we touched a lot, in the garden, there's a lot of rose in our garden now, and it sounds like you've kind of done the same. One of the things you've become as an expert on collaboration, and I like that you say many managers are trying to get from a me mindset to a we mindset. That's a big ask for all of us who seem a little bit more, and maybe we're even more so this way, kind of me-centered. So how do we do that? How do we break from the me to a we mindset? Well, I think the first thing you have to do is understand that it's possible because a lot of people, especially in buyer-supplier relationships, if you're in procurement, you've been trained to go negotiate and win. You know, in one of my first book, I actually had a quote from the chief procurement officer of Microsoft, who's now retired. He said, Kata, win-win is when we get to win twice. And so we're expecting our employees to go out and beat the crap out of our suppliers. I mean, you talked about it with your retailer that you went and worked with. And that's the expectation. And those are the tools we've been given in our toolkit. And what we don't understand is that there's a massive amount of research on win-win and collaboration and the benefits of that. Not only the soft benefits, but the hard benefits. I like to say one plus one equals 11. I don't know if you've ever watched the movie, The Beautiful Mind, but John Nash, the Nash equilibrium game theory. What game theory teaches us is that the best results come from when we not only do what's good for ourself but we do what's good for the group. This is where win-win happens. One plus one isn't about value exchange, it's about value creation. Yet we go out, we say strategic partnership, and then we use tools in our toolkit to beat the crap out of the other guy. Or if I'm the supplier, I'm trying to be sly. I'm not being transparent. I'm trying to win, get a better price. I'm not leaning into these relationships. I want to sell you something instead of truly having a transparent relationship where we're working together, we're collaborating to co-create to create that value. So the first thing that we do is just educate people that there's science behind what we teach and then we give them a process. So there are five rules and ten contractual elements. So by following these rules and writing a contract that really is win-win, it radically changes the culture, and it radically changes the results people get because of that. Can you give us a couple of the rules? Yeah, so rule one is outcome-based versus transaction-based thinking. You know, you think about lawyers and they go, I've got to finish this transaction. I've got to write this transaction. I've got to paper this deal. And it really is about the commercials. And what we say is, no, it's about the relationship and what you're trying to achieve. So we have the team come together and create a joint shared vision. Lots of work has been done on shared visions and the power of understanding where you're going, but we don't always have a shared vision with our trading partner. So now we're gonna create that shared vision. We're gonna have five or less desired outcomes. The supplier, very, very aligned with where you're going, right? So if the supplier doesn't know where you're going, they're not gonna be able to help you get there. Yeah, I love where you're saying, take the longer view, the relationship view, get the outcome where everybody wins, and you're gonna wanna collaborate again, right? You're gonna wanna do business with that company again and you're going to give better work. You know, the example that Adrian gave, the worst thing that can happen to you at the end of a negotiation is people regret signing the contract, right? And they'll do the bare minimum to fulfill the requirements because they feel like they're getting the bare minimum for the talent and the products that they're bringing. Did I get that right? Absolutely. So you asked for a couple more rules. I'm going to give you two more. I can go through all five if we have time, but the second one is focused on the what, not the how. So I like to use this analogy of going to Mount Everest. You're the buyer and you have big hairy audacious goals, or maybe it's just the bunny hill, right? So to Mount Everest, you wanna go to the bunny hill, but you're trying to achieve something, some goals. And so I often turn around and go to my supplier. I have violated rule one. They don't know where you're going, you're just buying a transaction, but two, you've told them how to do the work. So we write these detailed statement of works, and it traps us at the bottom of our Mount Everest, right? Instead of buying Mount Everest and saying, you're my SERPA, I need you to bring your expertise, we're saying, gosh, I need you to show up and clean my toilets, or I need you to ship my product from point A to point B. So we're getting transactions instead of getting motivated people who are excited to come and work with you. You're just like, oh, I'm just the guy who gets paid per hour, per unit, or per shipment, or per mile versus I'm your SERPA and I'm going to help you do amazing things. Totally changes the nature of the work. Yeah, yeah. And rule three, which I think is near and dear to some of you guys, your original work is around the metrics and the incentives for the metrics. Because now I have to change the measures. So instead of a transactional metric, I'm measuring every task, I'm measuring our collaborative effort and how far we climbed on our journey to Mount Everest. So our actual metrics begin to change, and I'm incentivizing the supplier. The better, the faster, the cheaper, the safer they climb, the more incentives they're going to get, both monetary and non-monetary. For example, a contract extension. Wow. That's, I mean, what's more motivating than, oh, you love me and you're extending my work. Yeah, yeah. You know, it's so interesting as you're talking, I'm thinking about relationships as well, right? This isn't just a good business principle. This is really good about relationships. Transactional relationships don't tend to last very long, right? Exactly, because they're a transaction. It's like, yeah, you're just the guy who's going to show up and clean my toilets versus versus you have a really strategic facilities and real estate management contract like our latest case study with EY and ISS in the Nordics. They're hitting it out of the park, not only reduced cost structure, better sustainability, happier employees, more innovation. Can janitors be innovative? Absolutely. Yeah. Absolutely Yeah, so why would you do it is what you're saying yeah Everybody wins. Hey, listen, I loved your reference to beautiful mind My favorite my favorite part of that movie was when he finally got the recognition he deserved You're talking about incentives and matrix and they all put their fountain pens In front of them at the dinner table, which I thought was just a beautiful moment in the movie, A Beautiful Mind. Chester loves rituals and symbols. I really do, and fountain pens. It was a win, win, win. Hey, tell us about your research project at University of Tennessee. What have you found that we can learn from? Gosh, I have the coolest job in the world because I get to study these relationships. Why is the P&G Jones-Lingosol relationship one supplier of the year three times in a row. Why was the Microsoft Accenture relationship winning awards where others weren't, right? And so it was really by going in and spending the time with these organizations, digging in deeply, that we could unpack the rules. And so now we, you know, the original research was 2003 to 2009. We wrote the first book in 2010, Vested Outsourcing, Five Rules that Will Transform Outsourcing. And since then, more and more organizations apply the concept. As I mentioned, our latest case study, EYISS, prior to that, we had BP and Jones Lingus Sol. So every year we get more and more companies that are adopting the methodology. And it's just the self-fulfilling prophecy because the more people learn about it and they do win-win, they're like, wow, that really worked. It's almost like they're skeptics coming in. And so they're choosing to pilot to think differently and the results are remarkable. And then I get to turn around and write more case studies. But I want to tell you about something, you know, this is the, you know, you, you, you talk about anxiety at work and there's the hard benefits, lower costs, higher service, more profitability for the supplier. But it's the soft stuff that also really excites me, because I'm going to throw out a couple statistics from two case studies. The first one is Island Health Authority and the Canadian government with their doctors. So think of it as a union contract. They don't really think of it as a union contract, but they are kind of sorta. So when we started working with them, we do a compatibility and trust assessment. And so we score the relationship health. And one of the questions that we ask at the end is give us three adjectives to describe your relationship. And they were at 85% negative. Words like opaque, distrustful, transactional, toxic. Boy, right? In 18 months, after following the Vestive 5 rules, they were 86% positive. Wow. Collaborative, trusting, transparent, fun. I mean, isn't that exciting? So the rules not only help build better results, but they create a better environment. Because think about rule two, focus on the what, not the how. Do you want someone leaning on your shoulder telling you how to do your work? Or do you want to say, hey, you're my SERPA, let's go do something cool together. It's totally changing the culture. We've worked a lot with doctors and getting them to move from negative to positive is really hard. So yeah, that is amazing. That's awesome. Yeah, it's absolutely amazing. We covered that one in our HBR article, but in our latest case study with EY and ISS, think about it. Some of these employees, it's not the sexiest job. A janitor, a security guard, the IT guy doing the work at the end of the day on the floor, not exactly the funnest jobs in the world. There's a metric called the net promoter score. And so you give, it measures employee engagement. So they use the net promoter score to see the relationship health of these employees that are in these outsourced jobs. Because if they're happier, they're probably doing better jobs, right? And that's exactly right. So the net promoter score when they started was just above 0.2. And so, but you think, you think, oh, that's horrible. But I mean, it's kind of, it's not very exciting to be a janitor, right? Security guard. Yeah. It went to 0.58. It's almost triple the engagement. And so they're working together, they're coming up with ideas, the employees feel valued, because they're not being, you know, micromanaged and told what they're like, hey, you own, you know, you're, you're the best facilities or environment, let's even change the title, environmental services expert. And how can you help us today with our environmental services. And so they're coming up with cool ideas, they're being recognized for those cool ideas. There's incentives, right? And it's a self-fulfilling prophecy. So I know it sounds silly, but you follow these rules to get better results, but the rules create less anxiety at work because it's a better place to work. Yeah, we love that you're getting into sort of the, sort of in a way, employee relationship too. In our book, All In, we call that partnering with your talent. And it's, yeah, it's not just treating people like employees or they're my people. No, they're my talent, but they're my partners. I love that. How do people learn more about your work? Kate, where would you send them? Well, Google is a wonderful thing today or whatever platform you like to go do your search on. Just type in Vested Vitasic, but if you want to go to the official site, it's vestedway.com. So vestedway.com. All of our white papers, all of our case stories studies are in open source. They're in the Creative Commons. You can go download them. You can share them because we believe education is really how you start to open the minds and hearts of getting people to change. So you know people do read books but not a lot of people, but maybe you'll go do a Google search, find an article. The HBR article I mentioned is in their hard feature print, but they also have it where you can just go online. Type in VytasikVested, VestedWay.com, and just be curious. Start to see what others... What's the art of the possible when it comes to collaboration? This has been such a great conversation. We've learned a lot and kind of stretched our thinking here on partnerships and especially supplier relationships. Give us a last thought before we close here. When we were chatting beforehand, you said something about trading partner relationship health. You have some research on that. Anything that might be intriguing to us that might kind of challenge our thinking there? Yeah. So I mentioned we do a compatibility and trust assessment, and SAP funded some work that we had in the oil and gas industry and the utility industry. And so we went out to buyers in those industries and said, pick a good supplier, pick a good supplier and a typical supplier. And we did the compatibility and trust assessment with buyer A, good and typical, buyer B, good and typical. So we have all these suppliers that we looked at. And remember those adjectives that I talked about with Island Health, right? Absolutely amazing. The difference between a typical relationship and a good relationship. In a typical relationship, only 57% of the people, this is a buyer and supplier pairing, have positive words. In fact, 19% use negative words to describe this. A typical relationship, you've got hundreds of suppliers, the majority are typical, and you've got 20% of people that are not happy, negative, right? In a good relationship, you've got 82% positive and only 4% negative. And so there's a huge difference in the relationship health when you have a good relationship versus a typical. And my premise is, you've got to start recognizing that typical relationships aren't very good. They're very transactional and we're not collaborating. So put that front and center and start to flip a lot of these typical relationships to good relationships. And when you do, when you follow the rules, good things happen. Not only do the adjectives start to change to be positive, net promoter scores, you know, you can measure that, start to be better, and the results start to get better. Excellent. You know, we just wish you were a little more passionate about this subject, Kate. You know, the energy is wonderful. I have an opinion, would you, Kate? Come on. Yeah, and stick to it. My last question is you're in a lot of these stressful situations. You're negotiating these contracts. You're educating people. Give us one personal practice that you use to manage your anxiety in the workplace. Yeah, I mean that's a really good question. I think it's that you have to embrace the fact that business happens, right? And I travel a lot. I'm 4 million miles on Delta. You know, so you've seen, I've seen just about everything. And so you have to just go in with the mind that business happens. And, you know, especially if it's something non-controllable you can't get overly upset about that. You just have to roll with it. And one of my later books is called Contracting in the New Economy. And we use this analogy that business happens. You need to create a flexible contract framework, but with your own life, you need to create a flexible contract framework to say, don't have to be perfect. Business happens and life happens, airports happen and roll with it, right? You just have to, you can't be perfect all the time. Well, that's great. Well, listen, Kate, you've been a delight. You've written several books, but what would be the one book, if people wanted to go find it, that you'd recommend to start? Oh, that's a great, great question. I would definitely say The Vested Way. It's a free book. It's an e-book. It's a download. Just go Google Vested Way. You can get it from our site. But it's a really short e-book, and it's just the one it's free, it's two it's short so people read it, but it just gets to the heart of each one of these rules. But if people do like to read a little bit more meat, I would say Vested, how P&G, McDonald's and Microsoft are redefining winning in business relationships. We cover five rules and five case studies and the case studies are so inspirational. They're mind-blowing what these people and organizations have done when they truly, really lean into collaboration and follow the rules. Mind-blowing results. This is a win-win when Kate is recommending a free book, Jeff. That is a great giving relationship. So thanks. I don't think we've ever had anybody recommend a free book for where you start. That's great. That's right. And thevestedway.com. Hey, thanks so much, Kate. Thanks for the work you're doing and making work more fun and engaging and vested and all that great stuff. So really appreciate your time today. Awesome. Thanks so much. Well, Chess, we have been buyers, we have been suppliers. Suppliers, this really resonated here because it's an anxiety-filled transaction when you're selling something or you're buying something. I think she had some really interesting rules for us to start considering to make this a less anxiety-filled process. This comes back to the old Stephen Covey win-win. She's taking it to another level where you contractually lay it out and say, ìThis is what we're going to do and here's how we're going to do it and we're going to call each other on it, right? This longer view is so interesting. And she says, you know, it reminded me of our story about NASA, remember? It was a bit apocryphal, but where Kennedy, President Kennedy is asking the janitor, what are you doing? And he says, oh, I'm helping to put a man on the moon. That's that long view, right? I'm not just emptying the garbage as I'm keeping a clean place so that they're- Outcome based, yeah, she said, versus transaction based. Yeah, and that shared vision. I thought that was great. And we've had some wonderful clients like that. You know, I mean, one restaurant chain that I remember, you know, that we've worked with for years, we even helped the CEO write his book. And I remember they had you come and speak somewhere and you got the check and it was twice your normal amount and you went, what the heck? And they just went, hey, we love you and we want you to know that. And it's like, it's not all just down to money, but I mean, did you go early? Did you do all you could? Did you meet everybody that you could? You stayed extra. You wanted to reciprocate, right? Well, and you feel that sense of ownership. You know, I'm really helping accomplish something great here. And you know this we mindset instead of a me mindset. Isn't it interesting she shared this story where a win-win was we win twice. In other words, we get a discount and then we get another discount. You know? And that was her retail. It was you went for the first, you know, negotiator, then you went to the second, then the manager got you. By the end, you were like, what are you gonna give me? You know? Yeah, why am I even doing this? At one point I remember saying, look, you've beat me up so much, here's the deck, you should just do it. Clearly, none of my ideas resonate with any of you, right? That's great. Okay, so really good stuff. I think it's really such a positive thing. I love that idea. We talk about it in our book, All In, this idea of partnering with your talent, partnering with your suppliers. You know, it's such a powerful concept. So, you know, it was a great session. Just, I don't think we've ever done this before, but it could be something that's really anxiety-inducing, whether we're buying or selling. So, yeah, I wanna thank you. Yeah, and I like the idea of you apply it to your personal relationships as well. I mean, you know, whenever you have a transactional relationship with anyone, it's not going anywhere, right? That longer view, how can we help each other? How can we make this a meaningful relationship? So, I really like that aspect as well. From the negative adjectives to the positive adjectives. And it was really great. And you know, when I think of positive relationships and positive adjectives, one name comes to mind. Can you read my mind? What name am I thinking of? I'm seeing two letters. I have B and a K. Am I saying it right? Brent Klein, our wonderful producer. Yes, he takes the mess that we give him on these recordings and really makes them wonderful podcasts. So we love working with Brent Klein and Christy Lawrence, who finds us all these great guests. In fact, found Kate at a conference she was at. So thanks so much to both of them. We also like to talk about helping you buy our book. Anxiety at work. Listen, she talked about the free resources she's got available at vestedway.com, at thecultureworks.com. We've got some great resources for you there as well. Please visit us at thecultureworks.com. And of course we like to speak, Adrian. Speak on what? We speak on culture, leadership, and especially lately we've been speaking on leading through change and uncertainty which seems to be on everybody's mind so yeah give us a call we'd love to talk to you about your events whether it's virtual or in person and yeah give us a call we'd love to go out and share our messages with with your organization yeah and until the next time we wish you the best of mental health.