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by David Goldwich
We hear so much about negotiating for win-win outcomes, where all parties to a negotiation satisfy their interests. In practice, the win-win remains elusive. One reason for this is most people who negotiate in business have no formal training in negotiation. Even worse, those who have studied negotiation usually learned adversarial, win-lose techniques.
Win-win outcomes are increasingly sought after in the modern business world. Twenty years ago the words "channels," "partners," and "strategic alliances" were rarely mentioned in business. Today these concepts are common. As more and more companies enter such long term relationships, the win-win agreement become less of an ideal and more of a necessity.
So what is the secret to achieving win-win results? One critical element is to distinguish between positions and interests.
Positions vs. Interests
Although the terms are often used interchangeably, interests and positions are not the same. Positions are the demands and offers made by the parties in a negotiation—what they want, or think they want. Interests are what the parties consider most important to them—what they truly need, or why they want it. A position may be a means to satisfy an interest, but it is not necessarily the only—or best—way to do so.
For example, suppose Worker approaches Boss for a raise. Boss tells Worker that there is no money in the budget for a raise. Worker then quits his job, or continues to work unhappily while the resentment builds. Nobody wins. Does Worker really need a raise? No, that is simply his position, what he thinks he wants. But why does Worker think he wants a raise? What is his real interest? Not more money, but some means of improving his lifestyle. While a raise would satisfy this interest, there are also other ways to satisfy it. A company car, health benefits, or a housing allowance might serve the purpose as well. Boss might be able to satisfy Worker's interest through one of these means, even if a raise is out of the question.
Focusing on positions often leads to interests going unsatisfied, or even unrecognized. We must instead focus on our interests—what is most important to us. We must also be able to satisfy the interests of the other party.
For each position advanced (by us or them) we should ask: Why? For what purpose?
This enables us to uncover the underlying interest behind each position.
Look at your negotiating wish list and focus on your interests. Ask yourself "why" (perhaps more than once) to determine your true interests. Prioritize them so you are clear on which are most important to you. Try to get a rough idea of the other party's priorities as well.
Using Different Valuations to Reach a Win-Win
You will find that at times you value something far more than the other party, and vice versa. This is an ideal opportunity to create value.
Donald Trump tells of a particular piece of property he wished to purchase, but the owner A was asking far too much. In negotiating another deal, Trump learned that his counterpart B had an option to purchase the coveted parcel from A at a much lower price. As B no longer wished to exercise the option, it was worth little to them—but it was very valuable to Trump! Trump paid a higher price to B than he would have otherwise paid because B included the option, which Trump then exercised to get a much better deal with A. Trump and B had a win-win based on a differently valued asset.
To identify items that may be valued differently by the parties, consider the following:
Perceptions – some people will pay more to save face, look good, or have their ego stroked.
Risk – a more risk averse party may be willing to give up more if the other assumes the risk.
Combining similar resources and skills to achieve economies of scale – two parties can pool their demand to negotiate more favorable rates.
Combining different resources and skills to accomplish together what neither could do alone – a property owner and a building contractor can form a joint venture to develop the property and get a better return than either might have otherwise enjoyed.
By making concessions which are valued differently, each side can get more by giving up less! What painless concessions can you make that might be valued by the other party? What might they easily do for you that would be of great value to you? By focusing on interests and exploiting differently valued resources you are more likely to attain a win-win outcome.
David Goldwich conducts workshops in communication skills, persuasion, negotiation, assertiveness, and personal effectiveness. He is the author of Win-Win Negotiations in the ST Training Solutions Success Skills series and 'Why Did the Chicken Cross the Road? Lessons in Effective Communication'.
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