Anecdote: Collaboration requires fairness

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28/11/08 |

Collaboration requires fairness

By Shawn. Filed in Anecdotes, Collaboration, Culture.

Chocolate Cake Humans have a strong sense of fairness. If two people are given a sum of money and one is asked to divide it and offer the other portion to their partner, if it's not a 50/50 split the partner is most likely to refuse offer, even if this means that both parties loose everything. And of course when it's hard to really to split something exactly down the middle (like a piece of chocolate forest cake) then the you-cut-I-choose method is the only fair approach. Interestingly if a computer makes the split people are most likely to accept whatever proportion that's offered. We don't expect computers to be fair. So don't fall for the lame excuse of, "the computer says no." They're just playing with your psychological foibles.

This sense of fairness has a strong bearing on how we rate our satisfaction with our collaborators, and therefore the collaboration's long-term success. We care more about the process of fairness than the outcome. In one study of car dealers and their relationship with the car manufacturer, the biggest factors in satisfaction were not the transactional details of inventory quality or how good a deal they were getting but how the manufacturer behaved towards the dealer. Did they take the time to learn about their unique operation and market, were they treated with respect, were they polite and well mannered?

Small things can make a big difference. In the middle of this year we started a project for a client and like for all of our clients we offer a 10% discount if the full amount is paid before we start (it usually happens about the same time as we start). This client took advantage of this discount but somewhere along the way our invoice was lost in their system and we were a month into the project without payment. I mentioned this to our client and he was embarrassed and immediately offered to pay the additional 10% because his company didn't fulfil their end of the bargain. Immediately our rapport was strengthened.

Treating everyone fairly is not just the right thing to do, it will determine the long-term success of your collaboration.

I was reminded of the money splitting experiment this morning reading Sway: The Irresistable Pull of Irrational Behaviour. They also tell the car dealer story. It's an excellent little book. Here are the papers describing the research.

Guth, W., R. Schmittberger, et al. (1982). "An Experimental Analysis of Ultimatum Bargaining." Journal of Economic Behavior and Organization 3: 367-88.

Kumar, N., L. Scheer, et al. (1995). "The Effects of Supplier Fairness on Vulnerable Resellers." Journal of Marketing Research 32: 54-65.

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