Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 10, Issue 46;   November 17, 2010: Durable Agreements

Durable Agreements

by

People at work often make agreements in which they commit to cooperate — to share resources, to assist each other, or not to harm each other. Some agreements work. Some don't. What makes agreements durable?
The Japanese battleship Yamato during machinery trials 20 October 1941

The Japanese battleship Yamato during machinery trials off Bungo Strait, 20 October 1941. To avoid an arms race, the great naval powers had agreed to a sequence of treaties from 1922 to 1936 constraining the sizes and numbers of capital ships they could construct. In 1934, Japan withdrew from the treaty (and the League of Nations), and in 1937 began construction of the Yamato. Its great size was intended to enable it to engage multiple U.S. warships simultaneously, a capability that was believed necessary because of the industrial capacity advantage of the U.S. Thus, although the battleship treaties provided incentives to signatories to adhere to the treaties, for Japan there were even greater incentives to abandon them. For more, read the Wikipedia articles, "Treaty battleship" and "Japanese Battleship Yamato." The photo is part of the records in the Yamato Museum (PG061427). It is available from Wikimedia Commons.

If you're responsible for people or resources — most of us are responsible for at least ourselves — you probably make commitments at work. You commit to do something (or not to), at a certain pace, or by a certain date, or within some constraints. Sometimes the commitment is part of an exchange: I'll do this, and you'll do that; or I won't do this, and you won't do that; and so on.

When commitments are part of exchanges, we sometimes call them informal agreements. Rarely are they written down, though they might be; rarely are there handshakes, though there might be. Most agreements actually work. What makes agreements durable? Here are some of their attributes.

They're bilateral
Bilateral agreements are based on mutual consent. In a unilateral agreement one of the parties believes there is an agreement, but the other doesn't, or is unaware of any agreement. For durability, both parties must be aware that a deal has been struck.
They're clear
Even if both parties acknowledge existence of an agreement, they might not agree on the terms. It's essential that all concerned agree about what's being exchanged, and how it will be exchanged.
They're voluntary
Neither party is coerced — not by the other, nor by events, nor by another party. If coercion drives the bargain, the agreement is durable only while coercion persists.
The parties are equally knowledgeable
Each party has roughly Even if both parties acknowledge
existence of an agreement,
they might not agree
on the terms
equal information about the value of the items exchanged and the framework of the exchange. That is, both parties estimate the agreement's fairness equally accurately. If one party has better information than the other, then when the second party "wakes up," the deal often implodes, or the relationship sours.
Incentives have symmetric value
When the agreement includes incentives, the value of the incentives to each party is roughly identical. Incentives that mean much more to one party than the other are likely to lead to non-performance by the party that has lesser regard for its incentives.
There are no incentives for breach of confidentiality
When the agreement is confidential and sub rosa a trap awaits, because there can be an incentive to breach confidentiality. The first party to admit to a sub rosa agreement can sometimes avoid the penalties of having made such an agreement, even after harvesting value from it.

Most important, there can be no incentive for one party to turn against the other. If one party can capture value by inflicting harm on the other, the agreement is inherently unstable. It becomes a form of "I'll scratch your back; you stab me in mine." Durable agreements are structured such that turning on one's partner is very, very expensive. Go to top Top  Next issue: Beyond Our Control  Next Issue

303 Secrets of Workplace PoliticsIs every other day a tense, anxious, angry misery as you watch people around you, who couldn't even think their way through a game of Jacks, win at workplace politics and steal the credit and glory for just about everyone's best work including yours? Read 303 Secrets of Workplace Politics, filled with tips and techniques for succeeding in workplace politics. More info

Your comments are welcome

Would you like to see your comments posted here? rbrenPklnoATMXqGvSKIoner@ChacCJweQMJRfgdvchDyoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Workplace Politics:

Gen. George Casey, Dep. Sec. Paul Wolfowitz, and Sec. Donald RumsfeldDismissive Gestures: I
Humans are nothing if not inventive. In the modern organization, where verbal insults are deprecated, we've developed hundreds of ways to insult each other silently (or nearly so). Here's part one of a catalog of non-verbal insults.
A scene from the Orphan Girl Theatre's production of Antigone at the Butte Center for the Performing ArtsStalking the Elephant in the Room: II
When everyone is thinking something that no one dares discuss, we say that there is "an elephant in the room." Free-ranging elephants are expensive and dangerous to both the organization and its people. Here's Part II of a catalog of indicators that elephants are about.
Robert F. Scott and three of his party arrive at a tent left by Roald Amundsen near the South PoleManaging Non-Content Risks: I
When project teams and their sponsors manage risk, they usually focus on those risks most closely associated with the tasks — content risks. Meanwhile, other risks — non-content risks — get less attention. Among these are risks related to the processes and politics by which the organization gets things done.
The George Washington Bridge, spanning the Hudson River between Manhattan and Fort Lee, New JerseyThe End-to-End Cost of Meetings: II
Few of us realize where all the costs of meetings really are. Some of the most significant cost sources are outside the meeting room. Here's Part II of our exploration of meeting costs.
The city walls of Dubrovnik, CroatiaProblem Displacement by Intention
When solving problems creates new problems, or creates problems elsewhere, we say that problem displacement has occurred. Sometimes it's intentional.

See also Workplace Politics and Project Management for more related articles.

Forthcoming issues of Point Lookout

Daffodils of the variety Narcissus 'Barrett Browning'Coming February 28: Narcissistic Behavior at Work: I
Briefly, when people exhibit narcissistic behavior they're engaging in activity that systematically places their own interests and welfare ahead of the interests and welfare of anyone or anything else. It's behavior that threatens the welfare of the organization and everyone employed there. Available here and by RSS on February 28.
George Orwell's 1933 press card photo issued by the Branch of the National Union of JournalistsAnd on March 7: Narcissistic Behavior at Work: II
Narcissistic behavior at work threatens the enterprise. People who behave narcissistically systematically place their own interests and welfare ahead of anyone or anything else. In this Part II of the series we consider the narcissistic preoccupation with superiority fantasies. Available here and by RSS on March 7.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenLLlZVKxmFTTanCEqner@ChaczbseEfgvGTlDDyyqoCanyon.com or (617) 491-6289, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

The Power Affect: How We Express Our Personal Power
Many The Power Affect: How We Express Personal Powerpeople who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Follow me at Google+ or share a post Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.