Making the Pie Bigger: Five Steps for a Win-Win Deal

Ernie: Bert, would you like a piece of apple pie?

Bert: Oh boy, would I! Yes, yes, please! Mmm.

Ernie: Oh, okay, lemme see, let me just, um, look at these for a minute… Okay, Bert…

Bert: Smell that apple pie!

Ernie: Yeah… you take that piece there, Bert, and I’ll take this piece here.

Bert: Uh… ‘scuse me, Ernie, uh… but uh… Ernie! You gave me the small piece.

– Sesame Street, Episode #1285 (April 1979)

When we were in school, most of us studied fractions by thinking about pies.  If we’re sharing a pie between two people, we know we cut it in halves; if there are eight people, we cut it into eighths.  That was fair; everyone got the same amount.  We didn’t question it.  We hated fractions with odd denominators, though, because it was so hard to draw those on the pie circle and make them come out even.

At some point, we probably encountered that question about how to make sure two people are perfectly happy when they split something.  Remember the answer to that one?  One person does the cutting, and then the other one gets to choose the half they want.

It’s simple, it’s fair, and it looks good on paper.  So is that what we should do in our negotiations?

Is “Even Steven” a Win-Win?

In many people’s minds, a negotiation is a competitive situation.  Somebody has something, and someone else wants it; the only thing that’s open to question is who comes off worst in the exchange.

In this classic zero-sum scenario, two people are dividing a “pie” between themselves.  The metaphorical “pie” is a fixed resource pool, and each is trying to get a larger piece.  If one party succeeds in getting a larger piece of the pie, the other party’s will, of necessity, be smaller – as if one were cutting slices from a literal pie and distributing them among a group.  There’s only so much to go around.

This win-lose mindset may have some applicability in certain short-term, purely transactional situations (perhaps when one is buying a car, for example… or actually sharing a pie).  In the modern business world, though, where organizations form ongoing and intricate webs of relationships among suppliers, vendors, partners, contractors, and customers, a win-win approach is often preferable.  Win-win agreements strengthen not only our own business but those of our partners as well – and what helps them will also help us.

So is a win-win just a fair distribution of resources?

While it might make our negotiations easier if we can just go halvesies on everything, it’s not as simple as that.  According to Roger Fisher and William Ury in their classic negotiation text, Getting to Yes, one of the keys to achieving success in principled negotiations is inventing options for mutual gain.  What this means, in essence, is finding ways to make the pie bigger, so that both parties can walk away with more – and nobody ends up as the “loser.”  This is the concept that lies at the heart of win-win negotiations.

Why A Fixed Pie?

In theory, making the pie bigger sounds great.  But many of us can attest from personal experience that it’s not as easy as all that.  Negotiators tend to have their own ideas about how the deal should look in the end, and they may not be willing to adopt the flexible mindset required to invent creative options.  They may be of a competitive bent, or simply not feel like helping the other side.  They may not be relationship-oriented enough to understand why a win-win result could be beneficial for them or their organization in the long run.  Or they may not realize that growing the pie is even a possibility.

According to Fisher and Ury, one of the major obstacles inhibiting the creation of options for mutual gain is the common assumption of a “fixed pie.”  If we see the negotiation as a simple division of a limited pool of resources, we blind ourselves to the potential to expand our gains beyond the obvious.  This makes the negotiation by default a competitive, win-lose, zero-sum game – if one party ends up with more, the other ends up with less.  The only possible way to get a “win-win” with this mindset is to cut the pie perfectly in half – and someone will probably still end up feeling like they got the small piece!

How to Grow the Pie

Recognizing opportunities to “expand the pie” and trade issues for mutual benefit takes some creative thinking and a degree of trust and collaboration between the parties.  The process of growing the pie is all about appealing to each party’s underlying interests.

1. Build trust. Studies have shown that while most people think of themselves as honest and cooperative, we are likely to assume the person on the other side of the table is only looking out for themselves. We won’t be able to achieve a win-win result unless we start from a foundation of trust.  One way to get things moving in the right direction is to suggest early in the meeting that the focus be on value creation and building a mutually beneficial relationship.  If both parties can put aside their suspicions and enter into a spirit of cooperation, the exchange of information and ideas should be far more productive.

2. Ask questions. To create value, we need to learn about the other party’s interests. Our goal is to gain an understanding of what the other party really wants, so we can create options that appeal to their needs. Most negotiations don’t start with everyone spilling the beans about all their underlying motivations and issues, but if we ask good questions and really pay attention to what the other party says, we can collect a lot of useful information. If they have an opening offer to make, examine it carefully – these can tell us a lot about underlying interests.  Money is not the only factor in most negotiations – ask probing, open-ended questions to draw out their other concerns and needs.

3. Share information. We should listen more than we talk – that’s how we learn what we need to know – but we should also not withhold information from the other party. The more open and truthful we are, the more trust we will generate, and the easier it will be to work with the other party to create value.  People tend to reciprocate with one another; we can tell them something about our critical needs and most pressing interests, in return for them sharing the same information.  This transparency contributes to a trusting and collaborative environment, and also provides clarity around areas of potential mutual benefit.

4. Work together. Collaborate with the other party to brainstorm as many options as possible. Remember that part of brainstorming is not to critique ideas – just to get as many of them down as possible.  After the brainstorming session, the parties can evaluate the various ideas and approaches, and decide what isn’t worth considering further, and what looks promising enough to keep discussing.  Look especially for potential “mutual gain” areas, where both parties have common interests or ones that dovetail without conflicting.

5. Create good exchanges. The best way to increase the size of the pie for both parties is for each side to offer concessions that are of low cost to them, but of high value for the other party. The idea is that each party will gain something that appeals to their interests or meets their needs, while the other party gives up very little to provide that benefit.  In this way, wise, mutually beneficial tradeoffs can help us grow the pie instead of just slicing it up.  Both parties will achieve far more than they would if they simply compromised on each issue or “split the difference”.

Once we escape from the trap of the “fixed pie” assumption, we can collaborate with our negotiating partners to find areas where our interests are parallel or complementary, and add more value to the final deal.  That way, we both walk away with a win-win outcome – and nobody feels like they got the small piece.

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Baker Communications offers leading-edge Negotiations Training solutions that will help you address the goals and achieve the solutions addressed in this article. For more information about how your organization can achieve immediate and lasting behavior change that leads to bigger wins during negotiations in any setting, click here.