Many negotiators have a tendency to focus on price as the most important issue in every negotiation. One side fights to get more, the other fights to pay less. Focusing solely on price can easily cause negotiations to bog down or even create a deadlock, because the pie is fixed. It becomes an issue of who “wins” and who “loses,” and no one wants to be the loser. Besides, what fun is it to haggle endlessly about money? Negotiators of the world, it’s time to get creative!
Sometimes price really is the most important issue to both parties, and in most cases it is certainly a consideration. However, there is no reason to allow a focus on price to confine our imaginations and blind us to other possibilities. Remember that negotiation is not always a matter of one party getting a bigger piece of the pie. Sometimes all it takes is a little creative thinking to get around negotiation sticking points, even issues as big as price.
If you do your homework and have your parameters set (as you should) you will go into the negotiation already knowing your Wish, your Aspiration, your WATNA (Worst Alternative to A Negotiated Agreement), your BATNA (Best Alternative to A Negotiated Agreement), and your bottom line.. You know what you hope for, what you expect to get, what you’d settle for, and what will make you walk away from the table. You probably also know a number of areas where you would be willing to make concessions, and you may have an idea about where the other party’s boundaries are. Within the framework enclosed by both parties’ parameters, there is usually a lot of room to maneuver. Price negotiations just go up and down, but creative negotiations let you move you in three dimensions.
There are often issues other than money that can make or break the deal, and areas where one or both parties are willing to give something to get something. This is what “expanding the pie” and win-win negotiating is all about.
To achieve a win-win outcome, you will have to focus on interests rather than positions. If both parties stay rooted in their positions, you just end up in a deadlock. Both parties will always have differing positions, and they are almost never mutually compatible. This is where price negotiations can become problematic; one side’s position is “pay as little as possible” and the other’s is “get as much as you can.” However, if you explore your underlying interests, you may find that you have common goals that you can agree on and use as the basis for a win-win solution. On the other hand, sometimes both parties turn out to have differing interests that are not in conflict with one another, and therein lies the solution! Look for such opportunities in your negotiations.
According to Roger Fisher and William Ury, there are four obstacles which inhibit the creation of options for mutual gain. They are:
To overcome these obstacles, you have to separate the process of inventing options from deciding on a solution. Use brainstorming to come up with as many possible options as you can. Remember: There are no bad ideas when you’re brainstorming! All options should be put on the table without criticism. After your brainstorming session, winnow through the pile and discuss the most promising options. Options can be either specific or general. The key is to invent as many options as possible before deciding on the best course of action for everyone. This will help you to “expand the pie” before dividing it.
Look for mutual gain. Work on identifying common interests and dovetailing differing interests. Maybe you both have an underlying interest in finding an ecologically friendly process; work together to find the best answer. Maybe the other party would be willing to pay more for faster delivery. Maybe they would be happy to exchange distribution rights for royalties. Maybe they would gladly give you a longer contract period if you grant them some flexibility in time to pay on invoices. Make things easy for yourself and the other party by providing options that appeal to them. Once an option is selected, be sure to write it down so that both parties have a clear understanding, and make sure of a mutual agreement on its meaning before signing off on the deal.
In almost every negotiation, there are many points that can be negotiated besides price. Instead of fighting against the other party, work with them to find out what they need and want. Get creative and brainstorm ideas for how both sides can satisfy their interests and get the best possible deal. You may be surprised to see how the deadlocks vanish and both parties walk away feeling great about the outcome!
Re-Print Permission
This article may be reprinted in it's entirety if the following
conditions are met:
