In every business school, students are being told about the prisoner’s dilemma and game theory. The principle is to study how two entities (two people or two organizations) behave together. With two kinds of outcome: either a conflict mode (the famous win/lose or lose/win) or a cooperative one (win-win). Let’s all win?!?
Win-win is often depicted as the Holy Grail of any business person. Indeed, it makes lots of sense both financially and morally for a sales executive to aim at closing win-win deals with customers. Who wouldn’t dream of having more stable revenues, loyal customers, and only meeting happy faces? However there’s a darker side to the game theory: a slippery slope, a natural trend towards lose-lose.
Indeed, any time a salesperson oversells, abusing customer’s confidence, hiding some negative parts of his product and service offer…some time afterward comes a backfire. In other words, only a few days or weeks after the win-lose deal is closed, will the customer wake up. Struck by the awareness about his/her losing situation. And guess what? Time for revenge ahead, leading a shift from win-lose towards lose-lose. Time for self justice! This is how a conflictual situation gets worse and ends up even more conflictual! A divorce between the supplier and the customer. All good will vanished.
Another route may be taken, leading to the same dead end. If a sales person is deeply willing to get a new account, say a high potential new customer, he will sometimes be ready to undersell, and accept a very low unit price. He’ll be betting that there will be ways to catch up on future deals with the same customer. He’ll somehow « invest » for a brighter future. In other words, in front of a strategic account, the sales rep will start with a lose-win position (I lose, you win…but don’t get me wrong, I’ll win too!)
What if the catch up phase is not clearly explained and agreed in writing? Then naturally this lose-win position will seem unbearable for the supplier (the sales rep). And very naturally, he’ll be ripe for proper compensation (with eroding service, quality, reactivity, overcharging side options, etc.) Self-justice again! Finding ways to get a more balance deal, similar to a lose-lose situation (ok you won, now let’s both lose!)
Next, is that game theory only a matter of business, selling and purchasing? Not at all! In politics, biology or economics, the game theory is often used in order to try to anticipate the result of different choices between several parties. The key aspect that’s worth remembering is this « natural drift », on all conflictual occasions (always starting with either « I win-you lose » or vice-versa), towards the big losers game (we both lost!!) At a nation’s level, a bad political deal will eventually make the whole nation (the voters and their representants e.g.) lose. An unfair, or unbalanced law, starting with a win-lose deal (they got what they wanted…but we lost ground!) will also lead, at the end of the day, to a lose-lose situation.
At a geopolitical level, a « bad deal » between North and South countries (be it a any level of international military or humanitarian or climate cooperation…) will be understood by the weakest parties as a lose-win deal. And it’s just a matter of months or years until the deal drifts towards a lose-lose deal (here comes our migrants, here comes the new « bill » of what you guys « owe us », etc.) Self-justice again!
Eventually, be it in business or in any other parts of our lives, there’s only one kind of « good deal ». In a darwinian mode, only the most adaptable survive. Like it or not, it’s always time for win-win!