We spend a lot of time talking about “win-win” negotiations, but there are some prevalent misconceptions around that terminology. Win-win doesn’t mean being so nice that you give away the farm. It’s simply a way of reframing negotiation in terms that are not zero-sum.
The Zero-Sum Game
The traditional view of negotiations is something like dividing up a pie. There is only so much to go around. Thus, if one person gets more, the unavoidable and obvious result is that the other person gets less. This type of exchange is known as a “zero-sum” or “win-lose” situation.
It’s easy to see where this idea comes from. If you’re negotiating a basic commodity exchange where there is no issue outside of price, the only thing that’s negotiable is that price. The seller wants to get more, the buyer wants to pay less. The negotiation results in them meeting somewhere in the middle, but one side is probably going to give up more, and therefore be the “loser.” It seems very simple.
But how often is any negotiation really that simple?
Price is often a central issue in negotiations, but it is by no means the only issue. There may also be other considerations that can be traded that will add value for one party or the other – issues like delivery schedules, payment terms, service contracts, guarantees, bonuses, exclusivity, etc.
Imagine that two people are dividing a pie. Traditionally, this would lead to a straightforward squabble about who gets more, and it’s highly likely that whoever was most aggressive in their demands would win. However, the relationship between the two isn’t likely to be very cordial afterward, and there’s a strong possibility that the “losing” side won’t want to meet again.
How does this play out in the modern business world, where it’s crucial to build and nurture partnerships, customer relationships, supply chains, and other connections between individuals and organizations in order to be competitive?
Approaching negotiations as a zero-sum game leads to hard bargaining and broken bonds. It’s no way to build and maintain positive relationships with business partners. Not only that, but if you or your organization develop a reputation for being aggressive, manipulative, strong-arm negotiators, no one else will want to do business with you either.
Growing the Pie
This is why “win-win” negotiations are so important. The idea behind the “win-win” approach is to ensure that both parties walk away from the table feeling satisfied – not taken advantage of. It’s a process of discovering and meeting the most important needs of both parties.
The real key to win-win negotiations is creativity. If two negotiators with this mindset sat down to divide a pie, the discussion could soon involve a lot of other issues besides how big a slice goes to each side. It might soon become evident that one party would happily take less of the pie itself, if they could only get it warm, with a side of ice cream, a sprinkle of cinnamon on top, and also a box for leftovers. If those were things the other party could offer in exchange for a bit more of the pie, how do you think each side would feel when they walked away from the table?
If they both feel satisfied – like they “won” – that is a successful win-win negotiation.
Win-win negotiation requires recognizing that price is almost never the only issue. Each party involved in a negotiation has pressures, interests, and needs aside from the baseline dollar amount. Win-win negotiation means working to uncover what is motivating the other side – what they value, what they might be able to give up and what they might be able to offer, who is putting pressure on them, what kind of time frame they are working on, what their goals and underlying interests are.
Exploring all of these concerns and exchanging creative concessions based on them is how you build an agreement – and a business relationship – that makes both sides feel like winners.
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.
