Contracts are lifeboats

A little more than one year ago I got my boat licence. I was very happy to start my life as a commander, after years of sailing with no chance to set up my own boat. Now after 14 months my head is filled with plans about sailing trips in many seas around the globe.

One of the key safety devices on board of a sailing boat is the lifeboat. When everything is lost – maybe even the boat! – the lifeboat lets the sailors keep their life, as precious as it is and may suddenly be perceived when you are shipwrecked in a storm.

S.O.S – Save Our Stakeholders

Portland Pudgy proactive lifeboatTwo sailors in a lifeboat may view each other as a hindrance, one consuming and subtracting useful resources and supplies from the other. Instead they’d better cooperate and identify the needs of each, be it for shade, drinkable water, medicine or food. They will want to go a step further and start considering those needs as shared problem, like other shared ones like trying to spot a ship, collecting rainwater and getting the lifeboat to a friendly shore. Engaged in a side-by-side effort to solve a mutual problem, the two sailors will become able to reconcile their conflicting interests as well as to pursue their shared interests.

Now, I don’t know what your experience of contracts is, but mine is that they come into play when things go wrong, really wrong. As long as the relationship among the parties goes fine, there’s no need for contracts. When people start seeing their interest disregarded in some way and no reconciliation seems to loom on the horizon, clauses and lawyers come front center.

Usual alignment. Or not?

As lifeboats don’t add anything up to a nice sunny sailing day, contracts don’t add any direct value to your products or services success. At the same time they are both meant to save your life when shipwrecked. And like two shipwrecked sailors in a lifeboat at sea fighting for limited rations and supplies, parties may start seeing each other as opponents.

If a contract must be a lifeboat, then it would be better for it to ease the sailors’ alignment. Standard fixed price or time&material contracts are focused on opposed positions of the parties instead of being focused on naturally shared interests and on reconciling conflicting ones.

If you ever found yourself on a lifeboat with another sailor, would you prefer to be aligned to him or not? When you sign a contract, do you prefer to be well aligned or not?

Photo credits: http://en.wikipedia.org/wiki/File:Portland_Pudgy_proactive_lifeboat.jpg

Three key criteria you are likely going to violate next time you negotiate a contract.

Contract negotiation

Whether a contract is about developing some new software or about designing a loft in Berlin, it all starts with a negotiation. If you are setting up a fixed-price contract you will be negotiating deadlines and price. If you’re working on a time & materials deal, you will be negotiating the fee, be it on a hourly, daily or weekly basis. Each side takes a position, argues for it, and makes concessions to reach a compromise. This is an example:

Customer: “I need some software to invoice my users”
Consultant: “It depends on requirements”
Customer makes requirements as explicit as she can/wants.
Customer: “I want features A, B, C and D. They are all important!”
Consultant: “I need 4 months and €16,000”
Customer: “What? No way. My maximum budget is €7,500!”
Consultant: “Well I could go to €14,000 if you pay €5,000 upfront”
Customer: “Mh, I might consider a serious offer, but…”
Consultant: “I can deliver A, B and C in 4 months for €12,000.”
Customer: “Features A, B, C in three months for €9,000”

And so on…

In software development this minuet is about how many features the team will be able to pack into a finite amount of time, the customer pushing for more features, the developer holding her position to get buffer enough to manage any sudden unplanned problem. The parties start from setting up an exploratory position and then gradually give up. It goes on until they reach an agreement – or not – and then they freeze the deal in a contract hoping the following reality check won’t spoil the party.

Usually it does. But that’s a topic for another post.

Three criteria to judge a contract negotiation

Any method to prepare a contract may be fairly judged by three criteria:

  1. it should lead to a valuable and sustainable agreement, if any is possible
  2. it should be efficient, with no waste of time or money
  3. it should not damage – if not improve – the relationship between the parties

The negotiation approach shown in the little dialogue above is known as positional bargaining and it is the most common way to reach a deal about a contract. It serves some useful purpose because it tells the other side what we want, it helps protecting our interest under pressure and it can sometimes eventually lead to a good deal. But still positional bargaining fails to comply with the basic requirements of producing a valuable agreement, efficiently and amicably.

Negotiating over positions leads to unwise contracts

When parties bargain over positions, they tend to lock themselves into those positions. This ignites a chain of events, because the more the parties make their position clear and defend it against attacks, the more committed they become to it. The more you try to convince the other side of how right your position is, the harder it gets for you to change it. Ego becomes the position and the true value of the agreement starts losing actual priority.

Any agreement reached this way usually reflects a point between starting positions and not a solution carefully crafted to meet the legitimate interests of both sides. The result usually is a contract less satisfactory to each side than it could have been.

Negotiating over positions is inefficient

Positional bargaining takes a lot of time. It creates incentives for a stall to establish. It’s a game based on starting with an extreme position, stubbornly holding it and making small concessions only to keep the negotiation going and so it is for both sides. Each of these factors interfere with finding an agreement quickly.

The more you drag your feet, the more you threaten to walk out of the negotiation, the more you make the other side tired the more likely you are going to win. But all these tactics are also going to increase the time needed to reach an agreement and the chance you don’t even reach it at all!

Negotiating over positions makes an ongoing relationship uncomfortable

In positional bargaining each side asserts what she will and won’t do. Since a party’s success is the measure of the other party’s defeat and viceversa, reaching a deal this way very soon becomes a contest of will. Since the people you are negotiating with try to reduce your reach, it becomes very hard to keep them apart from bitter feelings.

To make this sad scenario even worse, this all usually happens the very first time you meet a new business opportunity, represented by a new customer or a new consultant, conditioning the very moment in which your relationship is established.

What to do then?

Many people think being nice is enough to solve the problem. They hope that following a more gentle style of negotiation will make things easier. The other side is not an adversary, but a friend and they try to focus on reaching agreement instead of their goal, making offers, concessions and giving up as necessary to avoid confrontation.
Such a soft negotiation style leads to two possible outcomes:

  • In case two soft parties meet, the agreement will be highly likely reached and even very soon but it will usually be suboptimal. Both parties will have given up something too soon.
  • In case a soft negotiator faces an hard one, the game will be biased in favour of the hard player, no need to explain.

We play two games: a game and a meta-game.

The point is that every contract we are about to sign brings another negotiation in. It is a sort of meta-contract. The first contract is about the price and terms of the service you are going to buy or sell. The second one, on a higher level, helps structure the rules of the game you are playing and you are going to play in the future. This second invisible contract escapes notice because it is usually negotiated unconsciously. But you know it or not, every move you make trying reaching an agreement will forge the rules of the agreement itself.

Principled negotiation

Instead of accepting a positional negotiation, try changing the game next time you discuss a contract. Try adopting these four principles:

  1. Separate the people from the problem of reaching your goal. People are not computers but still every negotiation passes through people. Figuratively, if not literally, both sides should come to see themselves as working side-by-side, attacking the problem, not each other.
  2. Focus on value delivered, not positions held. Both parties’ constraints are legitimate. Business constraints and technical ones as well are legitimate. Just compromising between positions is not likely to produce an agreement which will effectively take care of the human needs that led people to adopt their positions.
  3. Generate many options before deciding what agreement to sign. Designing optimal solutions while under pressure is very hard. Deciding in the presence of an adversary narrows your vision. Having a lot at stake inhibits creativity. We should learn by lessons learned by designers and generate many options before going on with the selected one enhancing the chance to reconcile differing interests.
  4. Define some criteria to judge the quality of the agreement for both parties. Raw stubbornness may prove valuable while negotiating a contract. However you can counter such an approach by insisting that a single say-so is not enough and that the agreement must reflect some fair standard, independent of the naked will of either side.

To sum up, try negotiating your next contract on these four principles. It will result in a wise agreement, reached efficiently without all the costs of digging into each other positions and keeping people away from the problem, thus making an amicable agreement possible.

Have you ever experienced such a negotiation? What contract you ended up with that time? Tell me more about your past negotiation experience!

Photo by wiertz: https://www.flickr.com/photos/wiertz/4563720850

What about a Makers Group in Milan?

Experimenting is all in all just this: you have an idea and you validate it by asking the Universe a proper question.

Today I had this idea: the Arduino User Group Roma has been a great success. Something similar could be possible in Milan too.

I want to validate this idea and start asking people: do you like the idea of a Makers Group based in Milan?

The outcome of the experiment is unknown, the value of the response high!
Please, spread this form if you are as curious as me about how it will end!

500 euro every 10 minutes

Suppose I give you 10 euros every 10 minutes under just one condition: the money you haven’t spent within that time frame will be mine again. You can buy anything, you are free to drink, eat, drive, read, watch, listen, wear, shoot, see, meet, learn, waste, build, travel and do whatever you want with those 10 euros. But if you only spend 5, I’ll take 5 back. If you only spend 7, I’ll take 3 back. You will have no chance to save that money for future use.

Let’s make it more violent.

Suppose I give you 100 euros each 10 minutes. No, even better: 500 euros. Yes, five hundred euros to you every 10 minutes for you to spend freely, no constraint, except one: I’ll take away the money you don’t spend.

What would you do?

Would you start to spend as much as you can? Would you manage expenses in order to only buy what you need? Would you focus the money that will come? Would you make your life a slave to this inexhaustible resource or would you let it go? On the other hand, would you mind to burn this money? Would such a waste disturb you? Would you feel bad? Would you mind at all?

Whatever your answer, you are in this situation every day, every hour, every moment of your life.

Time is your main resource, it is given to you for free, it is given to you anyway. No matter how you will spend it, it will go. Every hour you can only choose how to spend it, not whether to spend it or not. You are going to spend it anyway.

Every 10 minutes you will have spent 10 minutes of your life, that’s it.

Would you start to use as much time as you can? Would you manage your calendar in order to only live experiences you need? Would you focus on time flowing? Would you let your life be a slave to time or would you let it go? On the other hand, would you mind to burn your time? Would such a waste disturb you? Would you feel bad? Good? Would you mind at all?

Early bird catches the worm.

as much as

All the time you enjoyed wasting, was not wasted at all. — John Lennon

I left eBay. What’s next?

So, this is the situation: I left eBay Annunci (aka Kijiji) to join Neomobile to help the company stay agile & lean.

But this is just the surface, merely the part that will be visible on my LinkedIn profile. There’s lots more.

In 2012 I joined eBay Inc. to work as agile coach with the italian Kijiji development team. If you know italian or you can rely on a good translator, here is the post I used at that time to explain the reasons behind my choice. To sum up, at that time I set up a few learning goals which then I pursued and mostly reached. Introducing automated tests in a strategical legacy codebase, installing a proper continuous integration environment and ending up writing the first BDD tests with Behat wouldn’t have been anything new if I hadn’t had to cope with the amount of constraints that come along with a business big like that.

Coping with external pressure, while reducing internal pressure, has been my reward during my time in eBay. Reduced deployment cycle times, higher deployment reliability, better stand up meetings and a compact team of people playing BZFlag together every day, this were satisfactions I’ve got. Only the very big pressure applied on me by new opportunities made me leave that job. My experience in eBay make me recommend it to anyone willing to work in a very pleasant environment.

In spite of this, I increasingly felt the need to give space to a new Jacopo, which Cocoon Projects helped me discover throughout 2013.

Cocoon Projects is a company supporting value-driven innovation and its model of governance has deeply and very quickly influenced my way of conceiving groups of people and how they should act as a team towards a common goal. Since I started to collaborate with Cocoon Projects I have grown eager of helping orgs improving their governance to match the increasingly unstable nature of human global society and markets. But, as I said, I was working in a perfect environment: why should I leave eBay? Just for the sake of heeding the call?

In the last few years I have been studying and working with the black swan concept. As I kept talking with people about the vision induced by Taleb’s theory about economy and even storytelling, as an individual I realized I needed (and we all always need) some way to expose myself to positive black swans. All in all I just needed some way to create the safety net that lets any experiment free to fail. What doesn’t kill you makes you stronger, isn’t it? But how to unlock my freedom to experiment without killing myself?

It was the stubbornness of Francesco together with the opportunities generated by Cocoon Projects and ideato that created the conditions for the switch, for that click moment.

Neomobile carved out an offer that was impossible for me to refuse: starting on Jan 7 2014 I will be working with them 4 days out of 5, in their Milan-based office. Best news is that it’s not just a part-time agreement: it will be possible for me to aggregate those days off to get some valuable time every month.

This is perfect, it will allow me to get the best of two worlds:

  1. I will join a very skilled team featuring 3 or 4 of the best developers I know (maybe you met Giorgio Sironi on Dzone) working on some of the same premises that made me join eBay and some new ones as well: a stable team, a solid product to develop, a mature agile process and the chance to stay close to product ownership.
  2. I will be free to experiment, fail, succeed and improve the traction on radical management. Writing a new book, keeping this blog alive, attending conferences, coaching orgs about new governance models and fostering innovation for real will never be in the panic zone. It won’t be fly or die, it won’t be all in. My plan is to happily keep myself in my discomfort zone where I can maximize learning.

Is it going to be like that? Will this be the right way to optimize my potential, not (just) my progress? Who knows! This is the first experiment: wish me well, I’ll let you know!

2014: A Self Odyssey

So here we are, all back on track to live this new year plenty of things to do and chances to get. I wish during 2014 you can get a giant step ahead towards your own sustainable happiness.

I decided to kick off this new blog in January to set myself up for a deep and sound self development journey. In the meantime I thought it might be nice to tell you what happens, gather useful feedback from readers and share any lesson should come out of my experience.

I’ll be posting about my jobs, my side projects, experiments, small victories and useful defeats. I’ll be focusing on stories that show how to make things happen.

Tomorrow I’ll post something about my experience in eBay and the reasons why I quit, 2 days ago.

Happy new year everyone by now. It will be great!

Happy new year!
Positive attitude for free here. 🙂
Shot by Francesco Mosca.