Agreements

From relationships flow the agreements that give definition and direction to win-win. They are

sometimes called performance agreements or partnership agreements, or shifting the paradigm of

productive interaction from vertical to horizontal, from hovering supervision to self-supervision, from

positioning to being partners in success.

Win-Win Agreements cover a wide scope of interdependent interaction. We discussed one

important application when we talked about delegation in the "Green and Clean" story in Habit 3. The same five elements we listed there provide the structure for Win-Win Agreements between employers

and employees, between independent people working together on projects, between groups of people

cooperatively focused on a common objective, between companies and suppliers -- between any people

who need to interact to accomplish. They create an effective way to clarify and manage expectations

between people involved in any .interdependent endeavor.

Desired results (not methods) identify what is to be done and when.

THE SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE Brought to you by FlyHeart Guidelines specify the parameters (principles, policies, etc.) within which results are to be

accomplished

Resources identify the human, financial, technical, or organizational support available to help

accomplish the results.

Accountability sets up the standards of performance and the time of evaluation.

Consequences specify -- good and bad, natural and logical -- what does and will happen as a result

of the evaluation.

These five elements give Win-Win Agreements a life of their own. A clear mutual understanding

and agreement up front in these areas creates a standard against which people can measure their own

success.

Traditional authoritarian supervision is a win-lose paradigm. It's also the result of an overdrawn

Emotional Bank Account. If you don't have trust or common vision of desired results, you tend to

hover over, check up on, and direct. Trust isn't there, so you feel as though you have to control people.

But if the trust account is high, what is your method? Get out of their way. As long as you have

an up-front Win-Win Agreement and they know exactly what is expected, your role is to be a source of

help and to receive their accountability reports.

It is much more ennobling to the human spirit to let people judge themselves than to judge them.

And in a high-trust culture, it's much more accurate. In many cases people know in their hearts how

things are going much better than the records show. Discernment is often far more accurate than

either observation or measurement.

Win-Win Management Training

Several years ago, I was indirectly involved in a consulting project with a very large banking

institution that had scores of branches. They wanted us to evaluate and improve their management

training program, which was supported by an annual budget of $750,000. The program involved

selecting college graduates and putting them through twelve two-week assignments in various

departments over a six-month period of time so that they could get a general sense of the industry.

They spent two week in commercial loans, two weeks in industrial loans, two weeks in marketing, two

week in operations, and so forth. At the end of the six-month period, they were assigned as assistant

managers in the various branch banks.

Our assignment was to evaluate the six-month formal training period. As we began, we discovered

that the most difficult part of the assignment was to get a clear picture of the desired results. We asked the top executives the key hard question: "What should these people be able to do when they finish the program?" And the answers we got were vague and often contradictory.

The training program dealt with methods, not results; so we suggested that they set up a pilot

training program based on a different paradigm called "learner-controlled instruction." This was a Win-Win Agreement that involved identifying specific objectives and criteria that would demonstrate

their accomplishment and identifying the guidelines, resources, accountability, and consequences that

would result when the objectives were met. The consequences in this case were promotion to assistant

manager, where they would receive the on-the-job part of their training, and a significant increase in

salary.

We had to really press to get the objectives hammered out. "What is it you want them to

understand about accounting? What about marketing? What about real estate loans?" And we

went down the list. They finally came up with over 100 objectives, which we simplified, reduced, and

consolidated until we came down to 39 specific behavioral objectives with criteria attached to them.

The trainees were highly motivated by both the opportunity and the increased salary to meet the

criteria as soon as possible. There was a big win in it for them, and there was also a big win for the THE SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE Brought to you by FlyHeart company because they would have assistant branch managers who met results-oriented criteria instead

of just showing up for 12 different activity traps.

So we explained the difference between learner-controlled instruction and system-controlled

instruction to the trainees. We basically said, "Here are the objectives and the criteria. Here are the resources, including learning from each other. So go to it. As soon as you meet the criteria, you will be promoted to assistant managers.

They were finished in three and a half weeks. Shifting the training paradigm had released

unbelievable motivation and creativity

As with many Paradigm Shifts, there was resistance. Almost all of the top executives simply

wouldn't believe it. When they were shown the evidence that the criteria had been met, they basically

said, "These trainees don't have the experience. They lack the seasoning necessary to give them the kind of judgment we want them to have as assistant branch managers."

In talking with them later, we found that what many of them were really saying was, "We went

through goat week; how come these guys don't have to?" But of course they couldn't put it that way.

"They lack seasoning" was a much more acceptable expression.

In addition, for obvious reasons (including the $750,000 budget for a six-month program), the

personnel department was upset.

So we responded, "Fair enough. Let's develop some more objectives and attach criteria to them.

But let's stay with the paradigm of learner-controlled instruction." We hammered out eight more

objectives with very tough criteria in order to give the executives the assurance that the people were

adequately prepared to be assistant branch managers and continue the on-the-job part of the training

program. After participating in some of the sessions where these criteria were developed, several of

the executives remarked that if the trainees could meet these tough criteria, they would be better

prepared than almost any who had gone through the six-month program.

We had prepared the trainees to expect resistance. We took the additional objectives and criteria

back to them and said, "Just as we expected, management wants you to accomplish some additional

objectives with even tougher criteria than before. They have assured us this time that if you meet these criteria, they will make you assistant managers."

They went to work in unbelievable ways. They went to the executives in departments such as

accounting and basically said, "Sir, I am a member of this new pilot program called learner-controlled instruction, and it is my understanding that you participated in developing the objectives and the

criteria."

"I have six criteria to meet in this particular department. I was able to pass three of them off with skills I gained in college; I was able to get another one out of a book; I learned the fifth one from Tom, the fellow you trained last week. I only have one criterion left to meet, and I wonder if you or

someone else in the department might be able to spend a few hours with me to show me how." So

they spent a half a day in a department instead of two weeks.

These trainees cooperated with each other, brainstormed with each other, and they accomplished

the additional objectives in a week and a half. The six-month program was reduced to five weeks, and

the results were significantly increased.

This kind of thinking can similarly affect every area of organizational life if people have the courage

to explore their paradigms and to concentrate on win-win. I am always amazed at the results that

happen, both to individuals and to organizations, when responsible, proactive, self-directing

individuals are turned loose on a task.

Win-Win Performance Agreements

THE SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE Brought to you by FlyHeart Creating Win-Win Performance Agreements requires vital Paradigm Shifts. The focus is on results;

not methods. Most of us tend to supervise methods. We use the gofer delegation discussed in Habit

3, the methods management I used with Sandra when I asked her to take pictures of our son as he was

waterskiing. But Win-Win Agreements focus on results, releasing tremendous individual human

potential and creating greater synergy, building PC in the process instead of focusing exclusively on P

With win-win accountability, people evaluate themselves. The traditional evaluation games people

play are awkward and emotionally exhausting. In win-win, people evaluate themselves, using the

criteria that they themselves helped to create up front. And if you set it up correctly, people can do that. With a Win-Win Delegation Agreement, even a seven-year-old boy can tell for himself how well

he's keeping the yard "green and clean."

My best experiences in teaching university classes have come when I have created a win-win shared

understanding of the goal up front. "This is what we're trying to accomplish. Here are the basic

requirements for an A, B, or C grade. My goal is to help every one of you get an A. Now you take

what we've talked about and analyze it and come up with your own understanding of what you want

to accomplish that is unique to you. Then let's get together and agree on the grade you want and what

you plan to do to get it."

Management philosopher and consultant Peter Drucker recommends the use of a "manager's letter"

to capture the essence of performance agreements between managers and their employees. Following

a deep and thorough discussion of expectations, guidelines, and resources to make sure they are in

harmony with organizational goals, the employee writes a letter to the manager that summarizes the

discussion and indicates when the next performance plan or review discussion will take place.

Developing such a Win-Win Agreement is the central activity of management. With an agreement

in place, employees can manage themselves within the framework of that agreement. The manager

then can serve like a pace car in a race. He can get things going and then get out of the way. His job from then on is to remove the oil spills.

When a boss becomes the first assistant to each of his subordinates, he can greatly increase his span

of control. Entire levels of administrations and overhead are eliminated. Instead of supervising six or eight, such a manager can supervise twenty, thirty, fifty, or more.

In Win-Win Agreements, consequences become the natural or logical results of performance rather

than a reward or punishment arbitrarily handed out by the person in charge.

There are basically four kinds of consequences (rewards and penalties) that management or parents

can control -- financial, psychic, opportunity, and responsibility. Financial consequences include such things as income, stock options, allowances, or penalties. Psychic or psychological consequences

include recognition, approval, respect, credibility, or the loss of them. Unless people are in a survival mode, psychic compensation is often more motivating than financial compensation. Opportunity

includes training, development, perks, and other benefits. Responsibility has to do with scope and

authority, either of which can be enlarged or diminished. Win-Win Agreements specify consequences

in one or more of those areas and the people involved know it up front. So you don't play games.

Everything is clear from the beginning.

In addition to these logical, personal consequences, it is also important to clearly identify what the

natural organizational consequences are. For example, what will happen if I'm late to work, if I refuse to cooperate with others, if I don't develop good Win-Win Agreements with my subordinates, if I don't

hold them accountable for desired results, or if I don't promote their professional growth and career

development.

When my daughter turned 16, we set up a Win-Win Agreement regarding use of the family car.

We agreed that she would obey the laws of the land and that she would keep the car clean and properly

maintained. We agreed that she would use the car only for responsible purposes and would serve as a

cab driver for her mother and me within reason. And we also agreed that she would do all her other

THE SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE Brought to you by FlyHeart jobs cheerfully without being reminded. These were our wins.

We also agreed that I would provide some resources -- the car, gas, and insurance. And we agreed

that she would meet weekly with me, usually on Sunday afternoon, to evaluate how she was doing

based on our agreement. The consequences were clear. As long as she kept her part of the agreement, she could use the car. If she didn't keep it, she would lose the privilege until she decided to.

This Win-Win Agreement set up clear expectations from the beginning on both our parts. It was a

win for her -- she got to use the car -- and it was certainly a win for Sandra and me. Now she could

handle her own transportation needs and even some of ours. We didn't have to worry about

maintaining the car or keeping it clean. And we had a built-in accountability, which meant I didn't

have to hover over her to manage her methods. Her integrity, her conscience, her power of

discernment and our high Emotional Bank Account managed her infinitely better. We didn't have to

get emotionally strung out, trying to supervise her every move and coming up with punishments or

rewards on the spot if she didn't do things the way we thought she should. We had a Win-Win

Agreement, and it liberated us all.

Win-Win Agreements are tremendously liberating. But as the product of isolated techniques, they

won't hold up. Even if you set them up in the beginning, there is no way to maintain them without

personal integrity and relationship of trust.

A true Win-Win Agreement is the product of the paradigm, the character, and the relationships out

of which it grows. In this context, it defines and directs the interdependent interaction of which it was created.

Win-win can only survive in an organization when the systems support it. If you talk win-win but

reward win-lose, you've got a losing program on your hands.

You basically get what you reward. If you want to achieve the goals and reflect the values in your

mission statement, then you need to align the reward system with these goals and values. If it isn't

aligned systematically, you won't be walking your talk. You'll be in the situation of the manager I

mentioned earlier who talked cooperation but practiced competition by creating a "Race to Bermuda"

contest.

I worked for several years with a very large real estate organization in the Middle West. My first

experience with this organization was at a large sales rally where over 800 sales associates gathered for the annual reward program. It was a psych-up cheerleading session, complete with high school bands

and a great deal of frenzied screaming.

Out of the 800 people there, around 40 received awards for top performance, such as "Most Sales,"

"Greatest Volume," "Highest Earned Commissions," and "Most Listings." There was a lot of hoopla --

excitement, cheering, applause -- around the presentation of these awards. There was no doubt that

those 40 people had won; but there was also the underlying awareness that 760 people had lost.

We immediately began educational and organizational development work to align the systems and

structures of the organization toward the win-win paradigm. We involved people at a grass-roots

level to develop the kinds of systems that would motivate them. We also encouraged them to

cooperate and synergize with each other so that as many as possible could achieve the desired results of

their individually tailored performance agreements.

At the next rally one year later, there were over 1,000 sales associates present, and about 800 of them

received awards. There were a few individual winners based on comparisons, but the program

primarily focused on people achieving self-selected performance objectives and on groups achieving

team objectives. There was no need to bring in the high school bands to artificially contrive the fanfare, the cheerleading, and the psych up. There was tremendous natural interest and excitement because

people could share in each others' happiness, and teams of sales associates could experience rewards

together, including a vacation trip for the entire office.

THE SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE Brought to you by FlyHeart The remarkable thing was that almost all of the 800 who received the awards that year had

produced as much per person in terms of volume and profit as the previous year's 40. The spirit of

win-win had significantly increased the number of golden eggs and had fed the goose as well, releasing

enormous human energy and talent. The resulting synergy was astounding to almost everyone

involved.

Competition has its place in the marketplace or against last year's performance -- perhaps even

against another office or individual where there is no particular interdependence, no need to cooperate.

But cooperation in the workplace is as important to free enterprise as competition in the marketplace.

The spirit of win-win cannot survive in an environment of competition and contests.

For win-win to work, the systems have to support it. The training system, the planning system, the

communication system, the budgeting system, the information system, the compensation system -- all

have to be based on the principle of win-win.

I did some consulting for another company that wanted training for their people in human relations.

The underlying assumption was that the problem was the people.

The president said, "Go into any store you want and see how they treat you. They're just order

takers. They don't understand how to get close to the customers. They don't know the product and they don't have the knowledge and the skill in the sales process necessary to create a marriage between

the product and the need."

So I went to the various stores. And he was right. But that still didn't answer the question in my

mind: What caused the attitude?

"Look, we're on top of the problem," the president said. "We have department heads out there setting a great example. We've told them their job is two-thirds selling and one-third management,

and they're outselling everybody. We just want you to provide some training for the salespeople.

Those words raised a red flag. "Let's get some more data," I said.

He didn't like that. He "knew" what the problem was, and he wanted to get on with training. But I persisted, and within two days we uncovered the real problem. Because of the job definition and the

compensation system, the managers were "creaming." They'd stand behind the cash register and

cream all the business during the slow times. Half the time in retail is slow and the other half is frantic.

So the managers would give all the dirty jobs -- inventory control, stock work, and cleaning -- to the

salespeople. And they would stand behind the registers and cream. That's why the department

heads were top in sales.

So we changed one system -- the compensation system -- and the problem was corrected overnight.

We set up a system whereby the managers only made money when their salespeople made money.

We overlapped the needs and goals of the managers with the needs and goals of the salespeople. And

the need for human-relations training suddenly disappeared. The key was developing a true win-win

reward system.

In another instance, I worked with a manager in a company that required formal performance

evaluation. He was frustrated over the evaluation rating he had given a particular manager. "He

deserved a three," he said, "but I had to give him a one" (which meant superior, promotable).

"What did you give him a one for?" I asked.

"He gets the numbers," was his reply.

"So why do you think he deserves a three?"

"It's the way he gets them. He neglects people; he runs over them. He's a troublemaker."

"It sounds like he's totally focused on P -- on production. And that's what he's being rewarded for.

But what would happen if you talked with him about the problem, if you helped him understand the

importance of PC?"

He said he had done so, with no effect.

THE SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE Brought to you by FlyHeart

"Then what if you set up a win-win contract with him where you both agreed that two-thirds of his

compensation would come from P -- from numbers -- and the other one-third would come from PC --

how other people perceive him, what kind of leader, people builder, team builder he is?"

"Now that would get his attention," he replied.

So often the problem is in the system, not in the people. If you put good people in bad systems,

you get bad results. You have to water the flowers you want to grow.

As people really learn to Think Win-Win, they can set up the systems to create and reinforce it.

They can transform unnecessarily competitive situations to cooperative ones and can powerfully impact

their effectiveness by building both P and PC.

In business, executives can align their systems to create teams of highly productive people working

together to compete against external standards of performance. In education, teachers can set up

grading systems based on an individual's performance in the context of agreed-upon criteria and can

encourage students to cooperate in productive ways to help each other learn and achieve. In families,

parents can shift the focus from competition with each other to cooperation. In activities such as

bowling, for example, they can keep a family score and try to beat a previous one. They can set up

home responsibilities with Win-Win Agreements that eliminate constant nagging and enable parents to

do the things only they can do.

A friend once shared with me a cartoon he'd seen of two children talking to each other. "If mommy doesn't get us up soon," one was saying, "we're going to be late for school." These words brought forcibly to his attention the nature of the problems created when families are not organized on a

responsible win-win basis.

Win-win puts the responsibility on the individual for accomplishing specified results within clear

guidelines and available resources. It makes a person accountable to perform and evaluate the results

and provides consequences as a natural result of performance. And win-win systems create the

environment which supports and reinforces the Win-Win Agreements.

Date: 2015-02-03; view: 758