Episode 166
From Power to Partnership: Why Automakers Have to Reinvent How They Do Business
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Ford just made waves with news of a $30,000 EV pickup built on a universal platform. It promises fewer parts, lower costs, and faster assembly. But Jan Griffiths asks a bigger question: if automakers can reinvent the product, why not reinvent the way business gets done?
That’s where Kate Vitasek comes in. As the creator of the Vested Methodology, Kate has spent more than 20 years studying how companies negotiate. She joins Jan to unpack how the old “win at all costs” mindset still lingers in the industry and why it’s holding leaders back.
Kate walks through the history: the 80s and 90s were all about leverage and power. The 90s brought interest-based bargaining, which used data instead of bravado. More recently, companies are experimenting with collaboration, where both sides actually work together to solve problems and create value.
But change doesn’t come easy. Short-term wins might seem like progress, but they often backfire. Kate describes this as “shading,” when the other side feels mistreated and resists or retaliates. She uses examples from union negotiations, supplier relationships, and even global trade disputes to show how this cycle keeps repeating.
Collaboration offers a different path. Instead of focusing only on price or concessions, it creates agreements that match intent with execution, protect both parties, and provide space for innovation.
Kate explains how her Vested framework turns adversarial supplier or union relationships into productive, long-term partnerships built on trust and results. Still, consistency is key: you can’t have one division trying to collaborate while another sticks to power plays.
Jan ties this back to leadership. Command-and-control might have worked decades ago, but it doesn’t inspire people now. Negotiation that depends on control and bravado is outdated in the face of current challenges. Leaders who show up with openness, clarity, and a willingness to co-create solutions will succeed.
And the advice for leaders listening? Start small. You don’t need to change everything overnight. Pilot a collaborative negotiation on one deal, measure the results, and use that success to expand the approach.
Themes discussed in this episode:
- The shift from power-based negotiation to collaborative partnerships in the automotive industry
- The evolution of negotiation models from the 1980s to today’s business environment
- The role of trust, transparency, and shared outcomes in strengthening supplier relationships
- Why authentic leadership aligns with collaboration better than command-and-control management
- How adversarial union negotiations can transform into long-term, cooperative agreements
- The connection between cultural consistency and successful collaborative business models
- Why outdated power tactics undermine innovation and efficiency in global supply chains
- How the Vested Methodology creates sustainable value for both buyers and suppliers
Featured guest: Kate Visatek
What she does: Kate is a recognized authority on strategic partnerships and the creator of the Vested® business model, a framework that helps organizations move from “what’s in it for me” to “what’s in it for we.” An accomplished author of seven books and a faculty member at the University of Tennessee, she combines award-winning research with real-world experience from companies like P&G and Microsoft to show leaders how to build collaborative, innovative, and sustainable business relationships.
Mentioned in this episode:
- Getting to We: Negotiating Agreements for Highly Collaborative Relationships
- A New Approach to Contracts by David Frydlinger, Oliver Hart, and Kate Vitasek
- What Is Vested?
- Collaborative Contracting Course
- Vested Executive Education Course
Episode Highlights:
[04:30] From Power to Partnership: Negotiation has evolved from leverage and bravado in the 80s to today’s growing shift toward collaboration and shared value.
[10:31] The Illusion of Short-Term Wins: Power-based negotiation might deliver quick gains, but it breeds resentment and retaliation. Kate explains how this “shading” effect, seen in cases like GM’s bankruptcy talks, shows why leaders must shift toward long-term collaboration.
[13:17] Collaboration Isn’t Slower: Power-based negotiations drag on with endless trade-offs, while collaborative deals set clear principles from the start. Kate explains how the Vested Methodology not only delivers better results in the same timeframe but can even turn toxic, adversarial relationships into trusting, long-term partnerships.
[17:56] Power’s Hidden Costs: Monopoly deals may lower prices upfront, but they trigger retaliation and rising long-term costs. Kate explains why leaders need clear strategies and collaborative processes to break out of this cycle.
[20:56] Ego Kills Deals: Lack of trust can be fixed with education, but ego is harder to overcome. Kate explains how power-driven egos fuel win-at-all-costs behavior that destroys collaboration.
[22:41] When Ego Shapes Policy: Trade disputes over rare earth magnets show how ego-driven moves spark retaliation. Kate argues that transparency and co-creation, not power plays, are the only way to stabilize high-stakes supply chains.
[24:28] From Intent to Action: Broad agreements often fall apart in the details. Kate explains how the Vested Methodology links vision, principles, and contract clauses so companies actually buy the outcomes they wanted, not just transactions on paper.
[26:31] Culture Must Be Consistent: One division’s collaborative mindset can’t succeed if another clings to power-based tactics. Kate shares how a billion-dollar aerospace deal collapsed because the company couldn’t honor that balance.
[28:36] Defining How You Negotiate: Few leaders ever sit down to define their company’s negotiation style. Jan and Kate stress the need for those conversations and encourage leaders to start small, piloting collaborative deals one at a time to build real cultural change.
[30:53] Quickfire Takeaways: In a rapid round, Kate shares what leadership style is dead, the trait every negotiator need, and the one word that should never enter a deal.
[33:00] Start with a Pilot: Kate’s advice for leaders: don’t overhaul everything at once — test one deal, learn from it, and build change step by step.
Top Quotes:
[10:04] Kate: “By being transparent, leaning in and saying: You know what? Let's create a trusting environment. Let's look at transparency. Let's look at the total cost of ownership. And now, let's work to solve a problem to lower our cost structure to make our supply chains more efficient. Because if I can work with you to drive efficiency in the supply chain, it reduces the cost structure. We can both win.”
[12:23] Kate: “What a collaborative approach does is it takes this win-lose out, and it actually says, 'Let's choose to create a trusting relationship through transparency, through problem solving, value creation.’ So, not value extraction, not value exchange, value creation.”
[16:05] Kate: “If I'm going to the flea market, I'm never going to see the guy again. Don't use the Vested Methodology. But on a deal where the stakes are high, you have repetitive, you're seeing those players again and again. They're your key supply chain partners, your unions. You're not just firing all the union. You've got to deal with them. And so, when you have these repetitive relationships, changing the nature and using a more collaborative value creation is game-changing.”
[33:32] Kate: “You don't have to change every single thing that you're doing, but just give it a try. If you've got a deal that's stuck, a supply chain relationship, if you're stuck with your union, like with Island Health and the Hospitalist, learn and try.”
Transcript
[Transcript]
[:Stay true to yourself, be you, and lead with gravitas, the hallmark of authentic leadership. Let's dive in.
This episode is brought to you by Lockton. Rising benefit costs aren't inevitable for you or your employees when you break through the status quo. Independence matters; it means Lockton can bring you creative, tailored solutions that truly serve your business and your people. At Lockton, clients, associates, and communities come first, not margins and not mediocrity. Meet the moment with Lockton.
size electric pickup plan for:It all started back in 2022 when Jim Farley, Ford's CEO, gathered a group of his leaders in a warehouse in the Detroit area for a teardown of the Ford Mach-E against the Tesla Model 3. And what they saw was humbling. They saw a lot more parts in their vehicle than in the Tesla Model 3. And Farley said, clearly, we do not have a future at Ford unless they change everything. Everything. What does everything mean?
Now, Ford is transforming the way it makes vehicles. Yes, that's true. But here's the bigger question: if we can reinvent the product, we can reinvent how we make the product. Can we also reinvent how we do business?
I am all about the need for reinvention in leadership and culture, and maybe I'm just not clear. That's an all-encompassing term. I mean, the way we make decisions, the way we interact with each other, all of it. The entire operating system for the business has to change along with it. And one key element of that is how we negotiate whether we are negotiating with suppliers, negotiating with unions.
Right now, we've got a lot of negotiations playing out front and center with the trade deals. Has the way that we negotiate changed, or are we using an outdated model? That's a question that we are gonna dive deep into today, and my guest is none other than Kate Vitasek, and she is perfect for this conversation.
She spent 25 years researching and creating highly collaborative partnerships and agreements. She's the architect of the Vested Methodology. And if you don't know what that is, you definitely need to check it out, and we'll put a link in the show notes. She's a well-published author, a Forbes contributor, and one of the most influential global voices in commerce today. Kate, welcome back to the mic.
[:[00:04:31] Jan Griffiths: And as I think back, Kate, let's say the eighties, 'cause that's when I started my career. And I look at my days in supply chain and purchasing, and the way that I was expected to negotiate, it was all about leverage. If you didn't have it, you made it up. And it was all about beating the supplier down. It was about winning. It was about the bravado. It was about, you know, the personality, being the tough guy, and winning at all costs. That's kind of the way I was taught; I wouldn't say it was the way I negotiate today. But how have you seen, and what does your research show, that negotiation style has evolved over time?
[:And then, following that, in 1983, you had Kraljic, right? And the Kraljic Matrix, the HBR article at the time, which was heralded as this like, amazing thing. It's a simple two by two. And the preferred strategy, as you used in your own words, Jan, is leverage. How can we leverage our power? And if we don't have it, we break it up, we commoditize, we strategize to figure out how to use your leverage.
very much power-based in the:Now, people didn't just like, start one day, and instead of starting with no or the secret powers in negotiation. They really started to use these interest-based negotiations. My husband is a retired firefighter. He recently retired, but they use interest-based negotiations in their unions. And so, you start to see this more, I won't say collaborative approach, but let's use facts and data and benchmarks to try to come up with our interest and to get to, get to yes, per se, instead of just like using all your power.
But then, in the:Companies who are using these more collaborative approaches to create value, that's not the norm, but I think you're gonna see it become the norm. But sometimes we have to let dinosaurs die and there's a lot of power-based companies out there, and dinosaurs gotta die sometime.
[:I mean, of course you need data, and I'm not gonna argue that. But coming as yourself with an open heart and an open mind and saying, "We! We collectively need to achieve something," which, I think, is a lot of what your work is about, right?
Before you answer that question, something I remember that you told me a long time ago, and I've never forgotten it, and that is, "Think about when you go into a negotiation, people typically sit the opposite sides of the table." And you talked about the visual of both of you sitting on the same side of the table.
[:So, you used the term transactional, right? So, a negotiation is transactional: I want X at Y price, and well, I wanna give you X at Z price — a higher price. And so, you're back and forth and you have concessions and trade-offs, where a more collaborative approach takes a step back and is very transparent. It is not just about using interest, right?
It's a step. If I had to draw this continuum, right? You have this power based to then interest based to then collaborative, what I think of as co-creation or value creation. And so, now by being transparent, leaning in and saying, "You know what? Let's create a trusting environment. Let's look at transparency. Let's look at total cost of ownership. And now, let's work to solve a problem to lower our cost structure to make our supply chains more efficient. Because if I can work with you to drive efficiency in the supply chain, it reduces the cost structure. We can both win.
[:[00:11:05] Kate Vitasek: Yeah, so a power-based approach typically is more short-term because I can win at your expense. But here's the fallacy of why that's wrong. Why the short-term thinking is wrong? Because, especially if I'm dealing with suppliers or unions, I have to continue to work with them. It's not just this negotiation, this time, this deal, these deal points, right? I have to come back to the table.
And Oliver Hart, who I collaborated with David Frydlinger on an HBR article called A New Approach to Contracts. Oliver has really popularized this concept in economics called shading. And so, if I take a short, I may have the power. I can get that hammer out, and I can use that hammer, and I'm gonna win in the short term. But the other party feels that was unfair. And so, they then become non-collaborative. Sometimes, even unconsciously, they work to get even. Sometimes they consciously work to get even. For example, in the GM, right? When GM went bankrupt, they got a ton of concessions. But the union wasn't happy, they got even, most recently, right?
[:[00:12:15] Kate Vitasek: And so, it's this back and forth and back and forth because the labor unions right now have more power, and so they were able to win. And so, what a collaborative approach does is it takes this win-lose out, and it actually says, "Let's choose to create a trusting relationship through transparency, through problem solving, value creation." So, not value extraction, not value exchange, value creation.
And that value creation, the fact that you could optimize your supply chain, you could reduce the number of parts you have, is going to be more powerful. But I have to bring that long-term perspective. It's not gonna be overnight, and that's what makes it so hard. Companies with a lot of power are very tempted to get the short term win versus "be patient and work on the bigger solution," even though they could have a bigger gain.
[:[00:13:23] Kate Vitasek: I don't think so at all. I think that's another myth, right? So, go back to the union, you know, United Auto Workers, how long did that play out? And so, here it is, a power base. Because you can't just expect the other guy to give in. And so, now you've got these back and forth negotiations, trade-offs, concessions — that takes time. And so, a collaborative approach, you just claim it from the start and say, "Hey, here are the guiding principles that we're gonna work under, here is the shared vision we're gonna do, and we're gonna start the solution." And we find a collaborative, a truly collaborative process, using the Vested Methodology, is about six months, maybe seven months. The quickest we've seen is four, but some of these deals are huge, Jan.
[:[00:14:11] Kate Vitasek: They're not tiny, right? So they were gonna take six months or more anyway. And so you're already taking that much time, but the process gets you a better result. And that's what makes me so excited is when I see these deals, and we love to do what we call C flips, so they're existing relationships that are adversarial. They had to work together anyway. They had a pattern, you know, every two years we went to bid, every five years we're doing a union negotiation. I love to take those and say, "All right, this next time you're gonna negotiate. Let's use a different methodology, and you can start to see the before and the after results, not just on the business results, but on the emotional feeling results."
We do a thing called a Compatibility and Trust Assessment. We like to take that right up front, and it gauges the trust levels before, after, and then ongoing. So, I'll look at, for example, the HBR article, where we talk about Island Health. So the Canadian government, one of the health authorities, and their doctors, the hospitalists, had 85% negative adjectives to use to describe the relationship.
So we actually have a quantitative score, but it's more of a qualitative score, adversarial, toxic, opaque, bullying. These are real words that people use, and you know, after going through the process, collaborative, win-win, trusting, transparent. That makes people more happy. Don't you wanna — at least I wanna work in an environment that is collaborative, transparent, trusting, win-win, rather than adversarial, toxic, bullying.
It's super cool to me, that you can take these relationships and change the process for how they get there. It doesn't take any more time on a big deal, right? If I'm going the flea market, I'm never gonna see the guy again. Don't use the Vested Methodology.
But on a deal where the stakes are high, you have repetitive, you're seeing those players again and again. They're your key supply chain partners, your unions. You're not just firing all the union. You gotta deal with them. And so when you have these repetitive relationships, changing the nature and using a more collaborative value creation is game-changing.
[:Once they've done it once, like you say, the relationships and the way they feel towards each other, that has fundamentally changed. So, the next deal, they're coming at it, the starting point is much higher, right? It can only get better over time, but it's this starting point to get over this idea of I must win. I must use my leverage, and I must win. To get to that mindset of we truly are in this together, we are looking to solve a problem, how do we do it, and as you say, co-create an agreement that gets us there.
This episode is sponsored by UHY. UHY and the Center for Automotive Research are digging into how suppliers quote and win with OEMs. The results drop at CAR MBS, September the 15th through the 17th at Michigan Central. Stay tuned.
[:[00:17:55] Jan Griffiths: Yeah.
[:And so if you have a monopoly and you're never gonna see them again, maybe you can get away with it. But in a monopoly situation where you continue to work with those players, you have to change the game because it's creating these transaction costs. And that's what I think people don't understand is the cost, not the hard cost of the price. Yeah, you got the price down, but you created a shading environment. The subtle tit for tat that drives the total cost of ownership up. It drives transaction costs up. And that's why we're really trying to educate people to change the game.
And Jan, you mentioned when people come to our class, when they do a deal, it's kind of fun because they become groupies, you know? So it's like, wow, I think differently now. I can't go back to the old way. And I say change the world one deal at a time, but unfortunately, there are a lot of people at the top of these big power-based companies, you know, the bigger they are, the bigger the company, typically the older the people are at the helm who have been trained in these older ways.
[:[00:19:17] Kate Vitasek: Right? And so, this is why I'm say sometimes you gotta let the dinosaurs die. Young people don't have a problem looking at total cost of ownership. They've studied John Nash's Game Theory. When I went to school, when you went to school, Nash hadn't won his Nobel Prize on game theory and win-win. You know, you set a strategy and you don't waver. And it's when we waver, when we negotiate, that you actually deteriorate trust.
And so, now we look at how do you set that strategy? If we say win-win's important, how do we use a process that keeps us from falling back into old ways where we're negotiating and trading off and have concessions, right? Because of that act, that process actually creates the distrust that creates the shading. You know, you start to see how that happens.
So, it starts with education, and you know, that's really what we're about is just trying to get people, invite people to come take our classes, read our books. So much of our work is open source. And begin to question, right? Hey, is this power-based approach really the right way? Or even is the interest-based approach the right way? Which I love the interest-based approach, but you can get to yes, and in a dynamic world, you're back at the table.
[:[00:20:35] Kate Vitasek: It's not that it's not good, it's just a little incomplete because when I'm in an ongoing relationship and I'm in a dynamic world, I'm always continually aligning interests. It's a continual negotiation, not a get-to-yes, this deal.
[:[00:21:02] Kate Vitasek: Oh, that's a really good question. Well, I think they go hand in hand.
[:Oh my goodness,
[:[00:21:10] Jan Griffiths: Yeah, I do too..
[:[00:22:11] Jan Griffiths: That's, you're right.
[:[00:22:16] Jan Griffiths: Yeah.
[:[00:22:47] Jan Griffiths: Yes.
[:[00:23:05] Jan Griffiths: Yeah. Tit for tat, there it goes.
[:So, what if we could optimize our supply chain? You know what? We need things from China; they need things from us. They want things from us. So, slow down, check your ego at the door, and start optimizing. And then, you start to realize that the best way to optimize is to co-create, to use transparency, to solve the problem in these repetitive high-stakes environments. When you're gonna see someone else again, if you're gonna the flea market, go negotiate all day long.
[:One thing that I see playing out with the trade deals, Kate, and obviously you're very, very familiar with the world of supply chain, and that's where my background is, you're never gonna get an agreement that dots all the I's and crosses all the T's on every single detail, I understand that. But it seems that sometimes these deals come out, and there's a very, very broad framework and not a lot of detail. And as countries are getting into the details now, we are seeing some disconnects and some back and forth. What are your thoughts on that?
[:[00:25:10] Jan Griffiths: Oh, okay.
[:[00:25:22] Jan Griffiths: Yeah.
[:And so we take that intent, that framework. And the parties actually write a formal statement of intent. It's their shared vision, guiding principles, which are six social norms that they commit to. So, the behaviors that they commit to. And their high-level desired outcomes. And then you take that statement of intent and you trickle it down into the way we work, there are five rules and there are 10 contractual elements. And what this means is what we wanted is actually what we bought.
[:[00:26:30] Kate Vitasek: Yay. And I always say, if you start the vested process, there's five rules. You know, you start with rule one and you go all the way through. And if you don't have an agreement, then go back to your old way. You can go back. But we only twice ever have seen someone not continue with a Vested Methodology. One of the reasons why was, it was an aerospace company and they did work with the supplier. Actually, it was about a billion dollars in revenue and supply chain work that they were doing for this aerospace company. Half of the billion-dollar spend was in the defense sector, and half was in the commercial sector. And the commercial sector and the defense sector did not have the same mindset of how they wanted to work. The defense sector said, "Hey, we need you. Let's be more collaborative. Let's think win-win," And the supplier created what we call in the Vested lingo language, a guardrail. And so, they said, "I'll be transparent with you, but don't share this with the commercial division because we know they have a hardcore power-based mindset.
[:[00:27:35] Kate Vitasek: They're gonna. They're gonna take my information and use it against me. And so, the aerospace company couldn't honor the guardrail. And they're like, yeah. They thought they could, but when they went up to try to get firewalls and different stuff, they're like, "Yeah, they're gonna be able to see all this stuff that's transparent, that's gonna help us create a better solution." And so, the supplier said, I can't risk this half a billion dollars. You know, your friends, your brothers over here in the commercial sector, are power-based, and we don't like working with them. And so, we have to be power-based over there, too.
[:I wonder how many leaders have sat down with their companies and with their teams and said, "Okay, let's talk about our negotiation style as a company," As a company. Whether it's with labor unions, whether it's indirect suppliers, direct supplies, whoever, but let's talk about it and what our values are as a company, what our cultural values are? Who are we? How do we wanna be known? How do we wanna negotiate? I bet you there aren't too many leaders that have actually sat down and had that conversation. Maybe, Kate, just maybe, we have sparked enough interest so that they would have that conversation. What do you think?
[:[00:29:27] Jan Griffiths: Yeah.
[:[00:29:52] Jan Griffiths: Yeah.
[:So the process matters. Learn the process, learn the tools and tricks, and then go and apply it to your second deal, your third deal, and your fourth deal. And then, over time you start to see the success stories. You'll be able to get momentum in your organization to drive the cultural change versus one day just going, "Snap, I'm gonna be value creation."
[:[00:31:00] Kate Vitasek: Alright, we're gonna see. I'm gonna put my thinking cap on.
[:[00:31:03] Kate Vitasek: Mm-hmm.
[:[00:31:06] Kate Vitasek: Dead.
[:[00:31:07] Kate Vitasek: Should be dead. It's not dead. It should be dead.
[:[00:31:20] Kate Vitasek: A co-creator.
[:[00:31:34] Kate Vitasek: Power.
[:[00:31:44] Kate Vitasek: Value creation versus value exchange or value extraction.
[:[00:31:55] Kate Vitasek: Value creation.
[:[00:31:58] Kate Vitasek: You see the theme here.
[:But bringing it back to the Ford discussion at the beginning of this episode. And this is my message to the auto companies out there, you can work on the technology all day long, if you don't work on the operating systems, the culture, the leadership that binds all of it together, then you are gonna be in the dinosaur category, and we cannot allow that to happen, and the Chinese OEMs will take over the auto industry. It's as simple as that.
So, my message is, "Again, you cannot run a 4K video on a '95 Windows operating system. So, what makes you think you can transform this industry using the same operating system that we've had going back to the eighties?"
Kate, closing thoughts for our audience today? If you are listening to this, supply chain leaders in the auto industry, executives in the auto industry, listening to this episode, and you wanna leave them with one thought, something they should do moving forward after they listen to this episode, what would that be?
[:[00:33:31] Jan Griffiths: Yeah.
[:[00:33:51] Jan Griffiths: Learn and try.
[:[00:33:54] Jan Griffiths: Yeah.
[:[00:33:56] Jan Griffiths: Yes, yes, I like that. And I would say open up the dialogue in the discussion about how you do business with your partners and how you negotiate. And with those two things, I will say, Kate Vitasek, thank you so much for joining me.
[:[00:34:21] Jan Griffiths: The Art of the Possible. Thank you, Kate.
Thank you for listening to the Automotive Leaders Podcast. Click the listen link in the show notes to subscribe for free on your platform of choice, and don't forget to download the 21 Traits of Authentic Leadership PDF by clicking on the link below and remember. Stay true to yourself, be you, and lead with Gravitas, the hallmark of authentic leadership.
