The Four Types of Relationships and the Reputational Cue Ball

The single most important principle in biology is sustainability. In fact, it’s so important, that it means everything. Nothing matters if you can’t pass the test of time.

When human relationships are sustainable not only do they survive, they compound.

There are only four different types of relationships:

  1. Win/Win
  2. Win/Lose
  3. Lose/Win
  4. Lose/Lose

Only one of those categories aligns us with the key principle of biology. Only one of those categories is sustainable indefinitely.

Yet so few of us insist that all of our relationships are win/win. Instead, too often we succumb to the short term temptations that time tends to filter out. We try to extract the last penny from our customers or suppliers. We don’t invest the time we need in our relationships with our kids or partner. We put other people down. We withhold information that we would want to know if we were on the other side.

Win/Lose behaviours are not sustainable. And worse they trigger an action – reaction response in humans. When someone pushes you what do you do? You push back. The same thing happens when we feel like someone is winning and we’re losing.

Newton’s third law tells us that “For every action there is an equal and opposite reaction.” What Newton missed is that this applies to humans as well, only it’s called mirrored reciprocation.

The most common strategy in life when you feel like someone is taking advantage of you is tit-for-tat. Sometimes you hit back right away, but more often you become a negatively coiled spring, just waiting to release your energy. Given the chance to punish someone that we feel wronged us, even at personal cost, we will often take it.

Any relationship other than win-win won’t survive across time. If it won’t survive it can’t compound. If it can’t compound not only are you leaving huge gains for both parties on the table, but you’ll have to spend a lot of time and energy finding a new counter-party.

The Test of a Relationship

The real test of any relationship is to ask: would you feel the same about the relationship if you switched sides?

“While others attempt to win every lap around the track, it is crucial to remember that to succeed at investing, you have to be around at the finish.”

— Seth Klarman

You can’t make a long-term deal with short term people. Anyone willing to take advantage of you in the short term, can’t be trusted for the long term.

The Reputational Cue Ball

Another way to think of this is how my friend Peter Kaufman describes it.

Non-Win/Win tactics are akin to playing a billiards tournament with a focus on sinking only the first shot or two. Billiards—or life—is a multi-shot game. When we fail to consider the future consequences of mistreating our counter-parties in a current “deal”‘ or first phase, it can wind up leaving our “reputational cue ball” ill-positioned for the next shot—the next deal or phase to come down the pike.

You might make the first shot or even a few in a row but if you want to run the table of life you have to help others succeed.