Give to get

In his book The Evolution of Cooperation*, Robert Axelrod argues that entering into a real partnership means losing some degree of freedom of action. What is a sensible decision for a company acting alone can be different from the best decision for the partnership.

To illustrate his point, Axelrod describes a hypothetical situation, which some of you may have come across before. It is called "The Prisoner's Dilemma".

The situation is this:

Two criminals are arrested under suspicion of having committed a crime together, but the police do not have enough proof to convict. The two prisoners are placed in separate cells, isolated from one another, and the police visit each of them and offer a deal – the prisoner who offers evidence against the other one will be freed.

The details and consequences of the deal are as follows:

1. If one prisoner betrays the other by giving evidence to the police, the defector will be freed. The one who remained silent, on the other hand, will receive the full punishment under the law.
2. If both decide to betray, both will be punished, but less severely than if they had refused to talk.
3. If neither prisoner accepts the offer, both will receive only a small punishment because of lack of proof.

The dilemma arises from the fact that each prisoner has a choice between only two options (to betray, or not to betray), but cannot make a good decision without knowing what the other prisoner will do.

To assist the analysis we can assign "pain points" to each possible outcome. Let's say that the full punishment scores 10, the reduced (less severe) punishment 6, and the small punishment 2. Being released is not painful at all and so scores 0.

If we consider the two prisoners to be "partners", the best outcome is the one that maximises the gain (i.e. minimises the pain) for the "partnership".

Looking at each of the three outcomes:

1. This outcome has a pain score of 0 + 10 = 10 (1 prisoner is set free, the other receives the full punishment)
2. The second outcome has a total pain score of 6 + 6 = 12 (both prisoners receive a reduced punishment)
3. The last outcome has a pain score of 2 + 2 = 4 (both prisoners receive only a small punishment)

Clearly, the outcome that produces the least pain for the "partnership" is the third one, by some considerable margin. But in order for this to happen, both prisoners have to refuse to betray the other.

The point about this puzzler is that it illustrates a situation where in order to achieve the best result for the "partnership", both "partners" have to take a course of action that is not rational.

Imagine you are one of the prisoners. If you think the other prisoner (your "partner") is likely to betray you, then your best course of action is to betray, because if you refuse to talk you will receive the full punishment (10 pain points). Conversely, if you think the other prisoner is likely to refuse to talk, then your best course of action is also to betray, since this will mean you walk free (0 pain points). In other words, no matter what the other prisoner is thinking of doing, your "rational" decision is to betray. Notice that if both prisoners adopt this "rational" approach, then outcome 2) will result, which under our scoring system is the worst outcome for the partnership!

To achieve the best outcome for the "partnership" both partners have to act in a way that is not rational i.e. they have to "give to get".

Being irrational

What is the basis for this apparently "irrational" behaviour? Well fundamentally it is a question of trust between the partners, together with a shared understanding of mutual goals.

In our example situation, in order to minimise the total pain both prisoners must have the same understanding of how much pain is involved with each outcome (the 'scoring' system) and must share the goal of minimising the total pain. If this is the case, then each prisoner, although isolated from the other, will be able to calculate which outcome will provide the best result for the "partnership" i.e. outcome 3), and will be able to determine that the option that will contribute to this desired outcome is 'Not to betray'.

However, this is where trust enters into the equation. Each prisoner must trust the other to adhere to this best course for the partnership, even though "rationality" might dictate otherwise.

The nature of trust

There are three types of trust between partners, which to a large extent develop sequentially over time as the partners get to know one another and get used to working (successfully) together. They are:

'Competence' trust, based on perceptions and the confidence one has in the capability, knowledge and expertise of the partner

'Contracted' trust, which is the faith one has in the partner to honour contracted obligations

'Goodwill' trust, which is manifested in mutual expectation and open commitment to each other

One can expect a mature partnership to exhibit all three types of trust, whereas a recently constructed alliance might be heavily dependent on just 'competence' trust.

The non-zero sum world

In the commercial world it only makes sense to partner if through working together the partners can achieve more than they would in total by working alone. This is a non-zero sum game. In our example situation the prisoners, through working together, reduced the total pain score to 4, a result that was way in excess of what otherwise could have been achieved. Axelrod states in his book that the modern economy is "a non-zero sum world" in which "you do not have to do better than the other players to do well yourself. The others' success is virtually a prerequisite for doing well yourself". And this is especially true when you are interacting with many different players. Note that Axelrod does not insist that you have to be in "partnership" with the other players for this to work – though of course having a formal partnership does help with both the mutual understanding and the trust elements that encourage organisations to take the decisions that contribute to the best (desired) outcomes.

Summary

So where has this discussion taken us? It seems that in order to make a success of a partnership you need to do three things:

• Understand and support the mutual goals
  
• Identify what set of combined actions or activities will produce the best outcome for the partnership
  
• Have the confidence, derived from trust in your partners, to take the individual courses of action that will lead to the best outcomes.

This last point often boils down to : "give to get".

And if you think that all of this is fairly obvious and straightforward, and should have been thought of long ago, well the fact is it was. Axelrod's The Evolution of Cooperation was published in 1984. We have had twenty years to put his observations and recommendations into practice. It is surprising how many organisations still don't get it.

*The Evolution of Cooperation by Robert Axelrod is available on Amazon at this page.

Partnering Points on "give to get"

• In our discussion above we picked on trust as a key ingredient of any successful partnership. There are four more elements that contribute to the development of a close relationship with your partners, which in turn will encourage all involved to "give to get": they are joint learning, mutual long-term expectations, multiple points of contact and sharing success.
• These five key elements are vital to the formation of the appropriate attitudes within each partner organisation. Having these attitudes creates an environment in which "give to get" becomes the norm, the natural default method of working for all involved in the partnership.
• As a result, each partner will undertake actions that demonstrate these attitudes and which serve to strengthen the partnership: these are joint co-ordination of activities, joint problem solving, dedicating assets to the partnership, getting involved in only a few relationships and allowing free flow of information between partners.
• Critically examine your organisation's existing and planned partnerships. How well do you perform on the five key elements that are vital to the formation of the appropriate attitudes within your organisation? How many of the five reinforcing actions do you actively take part in and promote within the partnership?
• Find a way to debate your findings within your own organisation and, where necessary, develop action plans to develop or improve areas where you are under-performing.
• If you have a healthy partnership, you should now be able to share the results of this analysis with your partners and work with them to improve the overall performance of the partnership. This is your golden opportunity to "give to get"! Don't miss it.

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