Collaborative Negotiation, You Can Both Do Better Than “Win/Win”!

All too often business people charged with negotiating on behalf of their organisation find it hard to believe that a win/win solution can be achieved without leaving some of “their” money on the table to meet this goal.  This zero sum thinking is quite common with the perception being that every deal has a fixed amount of “treasure’ to be spread between the parties involved.  This widely held view is at odds with both independent research and reported results of those that take a less combative approach to their negotiations.

Being more collaborative in negotiation style does not mean soft, or compliant; you can still hold firm on issues that are important to you.  What successful collaborative negotiators are doing is focusing on outcomes rather than the division of a fixed pie.  This concept has been well described by the Vested Outsourcing team from the University of Tennessee in their “5 Rules”:

  1. Focus on Outcomes, not Transactions.
  2. Focus on the What, not the How.
  3. Agree on clearly defined and measurable Outcomes.
  4. Optimise pricing model Incentives.
  5. Governance Structures should provide Insight, not merely Oversight.

By focusing heavily on outcomes, the Vested Outsourcing model breaks out of the confines of the fixed sum thinking.  Each participant is able to think about and strive for the things that are important to them from the agreement.  Gaining these outcomes need not be at the loss of the other party.  This is because a deal can often be structured to provide both parties’ outcomes in a way that both can live with.  This latter point is important because people engage in “satisficing” behaviour; in other words they recognise that perfection is rarely attainable, at least in one step.  They are therefore willing to accept a result that meets their core demands and the majority of their “like-to-haves” and consider this a good result.

So how does this work in a real negotiation?  We can perhaps take advice from Professor Stuart Diamond, the author of the negotiation text “Getting More”.  Amongst the points he makes are two that deliver strong support for our approach.  Firstly, he suggests making “emotional payments” to the other party.  The more important a negotiation is to another party, the less rational they are able to remain.  By meeting their perhaps non-logical but strongly held emotional needs, you will be able to break through, and be heard.  This is important – if you aren’t being listened to, you can’t negotiate.  Often these emotional payments are not a big deal and won’t involve you giving up on one of your core goals. The second supporting point made by Stuart Diamond is to trade things you value unequally.  This is the engine room of two parties getting a better than win/win result through collaboration.  If you give up something which you don’t value highly to a partner that does value it highly then you have grown the size of the pie.  All of a sudden the value of the deal in the eyes of both parties has increased, particularly if in exchange you receive something that you value highly but the other party does not.  A final point from Stuart Diamond is to be transparent and constructive in negotiations, not manipulative.  People quickly see through manipulative behaviour and once trust has been eroded, it is hard to recover.

While this is a very large subject, the following key points will help the reader think about how to negotiate a better than win/win outcome:

  1. Be clear on your goals and your negotiation partner’s goals.  Make sure they are stated as “Outcomes” and don’t be afraid to get them out in the open early.
  2. Be a problem solver and focus on opportunity.
  3. Deal with the other party as a person and make “emotional payments”.
  4. Have an exit strategy if the deal or other party is not going to meet your needs, you can’t collaborate with everyone.
  5. Be sure to agree on how the deal will be measured and managed and incentivise for higher performance.
  6. Find out what the other party values and work hard to deliver it to them.

(And don’t forget Preparation & Planning is the “secret sauce” for a successful negotiation outcome.)

The above points are an amalgam of several sources and are not of course the whole story.  We might end with a quote from Bob Woolf, the sports management agent.  His opening remarks in a negotiation were:  “I demand that we meet your goals!”  Because he recognised this was the best way to meet his own goals.  So be brave, tell the other party in your next negotiation you won’t budge on the issue of meeting their outcomes!

 

If you want to increase your knowledge of Collaborative Negotiation or need help planning for a specific negotiation then contact us at andrew.downard@adsupplychain.com.au or call +61 (0)419 581 705.

 

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One Response to Collaborative Negotiation, You Can Both Do Better Than “Win/Win”!

  1. Great article, Andrew

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