Principle-Centered Leadership

by Stephen R. Covey

Think Win-Win for Quality


When do we compete, and when do we cooperate?
To create independence, think win-win.


We once worked with a worldwide organization of several hundred thousand employees. Appointment to their prestigious headquarters training school as a faculty member was considered a major career plum.

After the very finest teachers from the organization were selected, they were organized into teaching teams to tap their creative synergy. A key objective was to ensure maximum benefit to the students from the cross-fertilization of ideas.

The faculty, however, was unmotivated and demoralized, only partial benefits from team teaching were being realized, and student achievement was lagging. In conducting assessment interviews, it was not difficult to discover a key systemic root cause for the difficulties. The teachers were responsible for creative cooperation in their team structure. Yet in their annual performance reviews, they were force-ranked against each other for substantial bonus pay and career advancement.

Quality within a two-person teaching team or a multinational corporate giant requires synergistic interdependence. The whole is greater than the sum of its parts. We have asked numerous chief executive officers and division heads the same question: "Which system do you want to optimize?" The answer is always the same, but this key insight is so frequently lost: The most important system to optimize is the ecosystem of the entire organization.

The root of interdependent, synergistic creativity and innovation for individuals and organizations is the fourth of the Seven Habits: Think win-win. We may not be able to achieve mutually beneficial outcomes in all interactions. But within organizations, long-term, sustainable quality effectiveness requires the attitude of seeking mutual benefits in all interactions.

When we are interdependent, anything other than long-term win-win degenerates to lose-lose-and commensurate waste in direct cost, opportunity cost, time, effort and other resources. Even independent competitors have many occasions and needs to cooperate interdependently. And, ultimately, a "no-deal" relationship is better than committing to interdependence based on win-lose or lose-win.

Competition has its significant benefits. In a free-market economy, independent organizations competing against each other for market share are motivated to deliver value, to innovate and to be cost-efficient. Through competition, individuals are frequently motivated to perform to their highest potential.

But competition can also drain creative energy, incite politics and turf battles, and destroy trust. The quality question is: When do we compete, and when do we cooperate?

The fundamental answer: When they are truly independent from each other, competition within rules and boundaries can be healthy and effective. When individuals and organizations are interdependent with each other, competition can be deadly. The essential principle to create effective interdependence is synergistic cooperation: Think win-win.

Actually achieving win-win, mutual benefit will depend upon the quality of four critical dimensions among the parties:
Win-win character-Especially their maturity, integrity and abundance mentality. True maturity requires courage balanced with consideration. Integrity means living true to one's values and convictions. An abundance mentality reflects whether people see the world as a pie of finite size or as a pie that can be enlarged by their mutual efforts.
Relationships of trust-The status of the "emotional bank account," the metaphor representing the measure of the trust and esteem in the relationship. Win-win will be easier to achieve when trust is high and communication is open.
Win-win agreements-Mutual understanding, agreement and commitment around five key areas: desired results, guidelines, resources necessary, accountability processes and consequences of success or failure. Win-win agreements incorporate synergistic, third-alternative solutions-not just your way or my way, but a third, better way that we create together.
Win-win systems-Aligned systems and organizational structure that support win-win relationships and cooperative synergy. Win-win people frequently must rise above the win-lose systems they work in-and then program the systems.

Is win-win always achievable? Perhaps not. But in continuing our quality journey, we should never be deterred from making constant serious effort.

About the author . . .

Stephen R. Covey is chairman of The Covey Leadership Center and author of Principle-Centered Leadership and the 7 Habits of Highly Effective People.

Keith A. Gulledge is vice president and a senior consultant with Covey Leadership Center's Professional Resource Group.
© 1995 Covey Leadership Center. For more information, telephone (800) 553-8889.