The Role of Relationship in Negotiation (Part One)- In Medicine, Strengthening the Long-Term Relationship Is Often the Most Important Outcome.

How you are treated and how you treat others will ultimately create more value than your immediate outcome.   This is especially true in the medical field.

Author: Robert A Felberg MD

Topic: Negotiation. Office Politics

Keywords: Doctor Contract, Negotiating for a higher salary, Doctor Salary, Reputation in negotiation

 

“Your trust account is more important than your bank account”- Billy Cox

It’s a common situation. You want to get an updated doctor contract salary, redefine the physician bonus structure, or just work with your partners to come up with a better call reimbursement plan. You know that it will require some bargaining, you want to a fair package for yourself, but you don’t want to mess up the relationship. Or maybe you’ve experienced the unsettling condition of being treated with “hard tactics” when trying to renegotiate your new doctor contract. The same administrator who claims we are “one big family” in this department suddenly tells you to “take it or leave it” when you ask for a salary increase to match a well-researched local market value.  You can’t believe it! You’ve worked with her for the last 4 years and built a great practice.  Now she treats you like this? Unfortunately, despite any past good interactions, the future relationship will always be tainted by this one moment.  This is something sage negotiators always avoid.

[Editor’s Note: To truly succeed in your medical career you’ll need three complementary skill sets.  Of course, you need to be skilled in the practice of medicine.  Secondly, you’ll also need to understand finance. Finally, you need Professional and Medical Business skills.   Of all the professional skills, negotiation is the most important.  This is one of an ongoing series from Physician Advocates and Medical Success Central introducing the science and practice of negotiation to healthcare professionals.  Sign up for our newsletter to be kept up to date.

Further note: The best book by far on this topic is Bargaining for Advantage by Richard Shell.  Several themes have been adapted from this book.]

In the end, negotiation is about the people and parties involved. Value, compromise, solutions, and actions are ultimately defined by the people who come to the agreement. The ideal negotiations leave both parties satisfied- you may not have gotten everything you desired, but you feel you were treated fairly, with respect, and most importantly- you would gladly negotiate with that other person again. Even better, you’d recommend that person to friends without hesitation. This combination of trust and a sense that you both follow the “golden rule” is loosely term “relationship”.

Relationships matter, often more than you can possibly understand at the time of the negotiation. Consider the colleagues who give you a glowing job reference, the contractor you recommend to your friends, or the referring physicians who send you patients. All of these actions are based on the relationship you have built with these people. The commonality between them is trust that you will act in an expected way with a certain level of reliability. Also included is the belief that you will do the same for them- this concept is called “reciprocity”.   When I need to refer a patient to a Cardiologist, I will consider the same group that has sent me so many clients over the years.

In this series I will describe the nature of relationships, the role of relationships in different types of negotiations, defining negotiations as relational or transactional, and how to account for relationship in your future negotiations.  I’ll consider hard vs soft tactic approaches and introduce the concepts of the “reservoir of good-will” and WATNA or Worst Alternative To Negotiated Agreement.

Here are some tips to help you with considering relationship as part of your negotiations:

  • Build relationships with trust, reciprocity, and small gifts. Show respect and appreciation towards your negotiating partner.   Always be certain to thank them for any concession or gift. Go out of your way to return favors in kind.   Be reliable and expect the same.
  • Don’t make the mistake of trusting too quickly, being made to feel guilty, or giving deals or concessions above and beyond the norms to family or friends. There are the bad guys who take advantage of relationships. Be on the lookout for them. The one characteristic of the sharks is that they view the relationship as purely transactional- they want something from you and they will quickly tire if the dedication of time and effort is beyond the minimum. Welcome new relationships, but treasure the old ones that have been forged in mutual trust
  • Avoid the grand gesture. Many people believe they can show the value of a relationship by granting the other party a large or unasked-for concession.  This has the opposite effect.  If you offer me a “free upgrade” because we are friends without a long-term relationship to back it up, my perception is one of being set up for deception. You might as well offer me “magic beans”. At best, I’ll take your gift without reciprocity, at worst I’ll walk away thinking this “free” gift has an upcoming costly price tag.
  • For purposes of medical negotiation, consider the long-term relationship to represent 75% of the total value of any negotiated deal. As you consider the goals of your negotiation, consider the relationship to be twice as valuable as the other aspects of the negotiation. Be willing to make concessions to preserve the relationship, but expect the same from the other party. It’s important to remember that as long as the relationship remains strong, you’ll be able to re-approach the negotiation again in the future.
  • Silent expectations kill relationships. Expecting others to know your desires is a recipe for disaster.  Clearly state your interests and goals in every negotiation.   Ask questions to understand what the other party desires. It’s highly unlikely you will get something unless you expressly ask for it.
  • Only value mutual relationships. Your mother was onto something when she would make comments about how a good friend would not treat you in a certain way. Many people give the impression of a strong and mutual relationship, until it comes time to reciprocate. Watch how others act. If they do not act accordingly, reclassify the relationship as transactional and not truly mutually beneficial. Treat them appropriately and consider moving your business elsewhere.

As you move forward in your journey of mastering negotiation for physicians remember to always pay attention to the role of   relationship. Learn to understand the value of a strong, long-term, mutually beneficial association over immediate gains.   Future posts will delve deeper into this topic, so please sign up for our newsletter and check back at medical success central frequently. In the meanwhile, be sure to learn         your market value, develop your negotiation strategy, and consider taking a CME approved negotiation course designed for doctors. With proper study and practice, you can master the professional and medical business skills you’ll need to succeed… really succeed.

     Some relationships take longer to build than others

 

What do you think? Do you value the business relationships you made over the years? Have you had experiences where the friendship saves your bacon? How about the times when someone treats you like some used car salesmen and sours the relationship over a short-term goal? Share your thoughts in the comment section below.

 

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