Professionals around the world bet on a strategy that is not unusual: never leave cash on the table.
Leaving cash on the table is perceived as a sign of weakness. If you leave cash on the table, you are believed to leave it for your business on the table. Simply put, he lost.
Research also indicates that leaving cash on the table is one approach.
One of the pioneers is Oliver Williamson, a professor at the University of California, Berkeley and winner of the Nobel Prize in Economic Sciences in 2009.
Williamson has conducted extensive studies throughout his long career on the economics of transaction fees, firm theory, and business relationships, i. e. , buy-sell relationships. In a seminal 2008 article in the Journal of Supply Chain Management, he warned that it is greater to leave cash on the table, not to insist on winning each and every negotiating point.
Williamson acknowledges that this is a contrary notion. Never leaving cash on the table is widely accepted, especially in what he calls “muscular” contract negotiation environments, where one party has all or nearly all the strength and doesn’t hesitate to use it.
Break the cycle of mistrust
But Williamson’s point is that leaving cash on the table is a key way to build buy-in and flexibility in a business relationship. Force play. When this happens, the contract is irretrievably skewed in favor of one party. At best, a commitment to success is compromised, Williamson says, and more than most likely to be unsustainable in the long run.
If one side, or even one of the parties, has an egocentric strategic schedule and needs to gain an advantage by exerting genuine or imaginary muscles, the most likely outcome is a problematic negotiation. This “could obviously jeopardize the joint gains of easier negotiation and more constructive contractual relationship,” he says.
“Leaving cash on the table can be interpreted as a sign of constructive intent to work together,” Williamson says.
Leaving cash on the table sends a strong message that the parties need a realistic and sustainable contract that creates a credible and sensible relationship, of a unilateral or overly idealistic contract.
Ultimately, putting cash on the table is a giant step on the road to building a relationship that is accepted as true in a relationship that can become a partnership. The result is a pragmatic contract based on credibility, collaboration, and acceptance as true from start to finish. . And accepting as true with is what it takes to keep up with dates that want to last and move beyond the kind of heartbreak that happens at a garage sale or flea market.
To learn more about Oliver Williamson, see “Unpacking Oliver: Ten Lessons to Improve Collaborative Outsourcing. “