The Art of the Deal is a 1987 book credited to Donald J. Trump and journalist Tony Schwartz. Tragically this book helped to make Trump a "household name". I'm not sure why. According to the Schwartz, Trump was on the wrong end of the worst publishing deal ever signed by an 'author'. He's the only casino owner I have ever heard of that has declared bankruptcy (six times between 1991 and 2009), which again is a shame. If he knew the first thing about making deals his attention may never have wandered away from hotels and casino businesses into areas he was even less suited to.
Robert Fitzgerald Diggs (better known as The RZA, de facto CEO of The Wu-Tang Clan) however certainly knows a thing or two about turning negotiation into a true art form. When Wu-Tang’s seminal self-funded debut single Protect Ya Neck first hit the clubs in 1992, major labels with a keen ear for a success about to explode swarmed over them.
On the back of that one record, The Wu-Tang Clan were on the brink of what defined success to most of the DJs and MCs they came up with – signing a major record label. But for RZA, success would be defined only by the terms predetermined in his Five Year Plan. The Wu-Tang Clan, at that time nine members strong, was in RZA’s mind, just part of what would blow up into the first major hip hop brand. The Five Year Plan included elevating The Wu-Tang Clan to major record sale and stadium success; promoting The Wu-Tang Killa Bees – a broad network of affiliate hip hop solo artists and groups - supported, financially and otherwise, by the Clan; and Wu-Wear – the Wu-Tang brand as a clothing label.
As RZA put it, ‘I used the bus as an analogy, I want all of y'all to get on this bus. And be passengers. And I'm the driver. And nobody can ask me where we going. I'm taking us to No. 1. Give me five years, and I promise that I'll get us there.’
But RZA didn’t see an existing model in the record industry that was capable of realizing his ambition. He needed to break the mould if the Wu-Tang empire was to come close to its potential, so how was one major label – one controlling element of what to RZA was a rigid, restrictive and inefficient system, ever going to propel his success? No matter how vast the label, there existed no example of the level of commitment required to promote both the Clan and each member as a solo artist (there were nine strong personalities there), let alone the swarm of Killa Bees.
RZA thought – why have one label promoting us, when I could have nine or ten?
Once RZA had satisfied himself that he had the partner that was most closely aligned with his vision to make Wu-Tang the biggest hip hop brand of all time, which he found in Loud Records, he entered negotiations with his killa clause – every member of the Clan must be free to sign a separate solo deal with any label they choose.
This was an audacious move – it was unheard of for a label to invest in any artist only to give them a free pass to go and make money elsewhere, but it was a negotiation point which RZA secured, and with that stroke of creative negotiating genius, RZA now had not one, but nine of the world’s major record labels each individually investing their resources into the promotion of the force of the Wu-Tang.
‘We reinvented the way hip hop was structured, and what I mean is, you have a group signed to a label, yet the infrastructure of our deal wasn’t like anyone else's’ RZA told one interviewer ‘We still could negotiate with any label we wanted, like Meth went with Def Jam, Rae stayed with Loud, Ghost went with Sony, GZA went with Geffen Records’ and critically ‘all these labels still put "Razor Sharp Records" (RZA’s brother Devine’s independent label) on the credits’.
Not just Razor Sharp Records of course but also the infamous Wu-Tang ‘W’ logo, reminiscent of Batman’s Bat-Sign, which RZA commissioned from Ronald Bean, a.k.a. Mathematics, who was later the producer behind Wu-Tang Clan's The Saga Continues album. ‘Wu Tang was a financial movement. So what do you wanna diversify...? Your assets’ explained RZA.
Between 1994 and 1996 a slew of Wu-Tang ‘solo’ albums dominated the charts:
RZA’s side-project The Gravediggaz came first, releasing 6 Feet Deep (released on Gee Street Records), followed by Method Man's solo debut, Tical (Def Jam), Ol' Dirty Bastard’s hip hop classic Return to the 36 Chambers: The Dirty Version (Elektra), Raekwon's Only Built 4 Cuban Linx... (Loud), GZA's Liquid Swords (Geffen) and Ghostface Killah’s Ironman (Epic). Each adhered to the terms of the contract as they are named as a solo release, but RZA’s production and the frequent ‘guest appearances’ by fellow Clan members made them, to my ears at least, full-force Wu-Tang Clan records.
So, what can the Wu-Tang Clan teach systems thinkers about negotiating for better public services?
Firstly, we need to understand the purpose of negotiation, which is simply to reach an agreement in which all parties’ needs are met.
The end result of a negotiation must be that all parties feel they have benefitted by entering into the deal. If everybody benefits then both (or all) sides will be internally motivated to deliver success. The mark of a good deal is that both (or all) parties want to deal with each other again – which if they are delivering success with you is surely a great thing. A negotiation sets the terms that establish a relationship and a good deal is the beginning of a good relationship.
For all systems thinkers, the attitude to both customers and to suppliers is ‘co-operative’ not ‘contractual’ or 'competitive'.
We know that achieving a 'win' in a win-lose deal is achieving a very near-sighted win (and in the long term almost certainly a substantial lose). You have not gained a partner who is intrinsically motivated to deliver success for or with you, but a rival who resents their being shackled to you. You have not built the foundations of a great relationship, but poisoned the well of any future project you may need that partner to help you make a success.
Monopolizing an asymmetry of information, holding the favourable portion of an imbalance of power or manipulating your ‘opponent’ to continue to negotiate beyond their interests without them walking away shows who has a finite mindset, storing up problems later.
It is actually only marginally better than being the loser in the win-lose deal - striking an agreement that you are already plotting your way to workaround for a better outcome later - which is never reached.
In public sector commissioning this usually occurs because the social enterprise, charity or whatever values-based organization is providing the service – perceive an imbalance of power that is not in their favour. ‘Cash rules everything around me’ proclaims Method Man on Wu-Tang’s classic 1994 12” C.R.E.A.M. As such is the third sector's misconception that the public sector holds all the trump cards in commissioning as they have all of the money. The public sector however is a mass of distant unwieldy fiefdoms, largely unable to yield to the variation in demand from citizens. The third sector is nimble, has the power to innovate and is connected with citizens so as to know what matters to them.
But in this relationship of no trust, there will always grow the belief that there needs to be control - control of a provider organisation that risks frittering away limited public resources if the commissioning budget holder does not feel they can monitor spend. This means that commissioners need to invent all manner of KPIs to ensure that they fully understand where money is going. Providers therefore focus on meeting these measurers - which are of activity, not of outcomes - and so productivity becomes the measure of success - rather than making a positive difference to a person's life.
Commissioners therefore invest precious scarce resources in expensive forms of financial gatekeeping rather than innovating new forms of help.
Contractual, not co-operative.
Never wield your power unwisely in negotiations as it will not be an investment in your future.
If a mutually beneficial outcome can’t be reached through negotiation, then both or all parties should simply walk away. It is far easier to walk away from a negotiation respectfully and courteously and go on to build a strong and successful relationship with the other party around later opportunities than to try to build relationships from a foundation of Win-Lose, Lose-Win or Lose-Lose deals.
Reaching a Win-Win agreement in which all parties’ needs are met is our core aim. It is possible that each party’s starting position is one of wanting to enter into a deal in which their desired outcomes happen happily to coincide. In which case, you are in a mutually beneficial position, skip any further negotiation and head straight to planning, working out measures of success rather than KPIs – together!
More often, there is significant gap between either party’s starting positions, which in traditional negotiation would mean that one party would need to concede ground in their desired outcomes so that the other could meet theirs. Usually this begins a tit-for-tat concedence dance. Many well-intentioned negotiators look at this as desirable – to find a fair middle ground in which both parties give a little and are compensated with further concessions from the other. However, this is in fact mutually dissatisfactory and is already heading down the path to Lose-Lose. As Chris Voss put in in Never Split the Difference 'Never split the difference—it leads to dreadful outcomes. If you want to wear your black shoes, but your spouse wants you to wear the brown ones, splitting the difference means you end up wearing one black shoe and one brown. Compromising is a cop-out, a way to feel safe'.
Truly successful negotiators recognize that, rather than competitive, negotiation is a joint enterprise which should be both co-operative and creative. These people approach any negotiating impasse looking for a creative third solution. A third solution is one which does not concentrate on objectives set out in either party’s starting position as the roadmap for a satisfactory outcome, but seeks to find alternative approaches to achieving the outcomes that both parties seek.
When this approach is committed to by both (or all) parties, the outcomes for each could be far greater than those envisaged in their respective starting positions. RZA’s creative third way did not force the negotiator from Loud to compromise on the budget that he had been given to negotiate with, the number of albums he would attach to a deal or how much promotion Loud would commit to, but to look outside of the normal way of doing things to allow for other companies to invest in the promotion of their core deal.
From my own experience I can recall a time that a Clinical Commissioning Group wanted to commission my team to produce a Health Outcomes Framework. The budget they had available (artificially limited in order that it came under the radar of procurement rules that were designed so as to prevent them from working with those they felt would do the best job) would not allow for us to produce anything of the quality we believed was associated with our brand and so I felt that we had reached a No Deal outcome - and I initially felt it best to respectfully walk away, preserving our good relationship for future work. My team however were concerned that the result of the No Deal outcome would be that the CCG would then simply commission a low-quality model from another organization, which would be a waste of public money and fail to deliver significant social or public health outcomes for the community we worked to serve and whose taxes were being spent on the venture. My instinct to walk away would therefore be actively delivering a negative social outcome for our community - which didn't sit well with us.
As such, we came back with a third solution which was to produce the Health Outcomes Framework for their price but to retain 100% Intellectual Property Rights over the framework, which we were then able to re-sell and modify many times over – surpassing, for the original commissioner, what could possibly be imagined to be achievable within their budget - giving them a far greater product for their money and, from our point of view, re-casting the original contract as an investment into the research and development of a new product, the ultimate iteration of which was eventually sold to an NHS Trust for an amount which provided great investment into our social objectives. RZA had shown me that many organisations could invest in development and each have their financial (and in our case, social) objectives met without compromise.
What does this mean for systems thinkers?
As systems thinkers we need to not be seduced into the tit-for-tat negotiation game – even though it can be a fun game to play, that level of competition stymies opportunities for genuine collaboration to develop services that truly deliver.
Our role is to be co-operators who aim to collaborate on the greatest outcomes for citizens. This means taking a step back and looking at the prospective project as a system and all parties to the negotiation as stakeholders with genuine objectives that need to be achieved. Understanding the what and why from their perspective will lead to the opportunities to find alternative ways of achieving them rather than aiming to reach a middle ground that is dissatisfactory for everybody. Usually this approach will help identify the areas of waste, the expensive forms of gate keeping, which can be removed to achieve effective services within budget.
What do you need to read?
Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher, William Ury, Bruce Patton is the benchmark by which all other books on negotiating tend to be judged.
Based on the work of the Harvard Negotiation Project, a group that deals with all levels of negotiation and conflict resolution, Getting to Yes offers a proven, step-by-step strategy for coming to mutually acceptable agreements in every sort of negotiation.
Never Split the Difference Negotiating as If Your Life Depended on It is an indispensable handbook of negotiation principles perfected from Chris Voss's remarkable career as a hostage negotiator and later as an award-winning teacher in the world's most prestigious business schools.
Whilst a hostage negotiator is never aiming for co-operative planning of services, the principles are borne out of some of the highest stakes negotiations imaginable and offer insight into how to reset a negotiation partner’s fixed mindset.
If you remember just one thing:
Splitting the difference means you end up wearing one black shoe and one brown. Compromising is a cop-out, a way to feel safe - Chris Voss