The Art of Win-Win Negotiation
Negotiation is an activity that everyone performs, sometimes daily. Two or more parties negotiate due to a conflict of interest (or interdependent goals) and because they believe they can secure a better deal through negotiation than by accepting the other side's initial offer. The parties choose to negotiate because they prefer to reach an agreement, rather than fight, capitulate, or take the dispute to a mediator.
5 Strategies to Achieve a Win-Win Outcome
There are both tangible (i.e., price, volume, terms of the agreement, etc.) and intangible (i.e., psychological and cultural) aspects of any negotiation. The intangible aspects of the negotiation are often the hardest to manage. Below are five strategies to manage the intangible risks and achieve a mutually beneficial outcome in any negotiation.
1) Determine Your Best Alternative in Advance
Determine your “walkaway” point (or your Best Alternative to a Negotiated Agreement (BATNA)) by evaluating potential outcomes of the negotiation and estimating the value of each scenario prior to the negotiation. Knowing both the minimum you can accept and postulating your counterpart’s potential minimum acceptable outcome will give you an advantage in structuring a win-win outcome.
2) Leverage Silence & Actively Listen
Active listening and note-taking during a negotiation are among the most critical determinants of achieving a mutually beneficial outcome. Remember that an uncomfortable silence can give each party “time to fully absorb what he just said. ‘Silence [gives] you the ability to dampen your instincts for self-advocacy and [amplifies] your instinct to listen.’”
Prepare a list of questions in advance of the negotiation, and focus on obtaining the answers to each to keep your negotiation on track. If your counterpart evades or dodges your questions, guide the conversation back to the issue to obtain the information you’ve identified as critical to your desired negotiation outcome.
3) Defend Against Deception
Don’t ever lie, because the legal, moral, and ethical risks of lying are never worth it. Do, however, prepare for the reality that someone else is lying or practicing deception. Harvard Business Review argues that people lie frequently, including negotiators, and your best defense is not to detect those lies, but to prevent them from occurring. In general, ‘dirty tricks’ in negotiation fall into three categories:
Deliberate deception
Psychological warfare, or
Positional pressure tactics.
When you ask direct questions, the other party is more likely to respond honestly. People are not adept at detecting lies. Instead, “we’re wired to readily accept information that confirms to our preexisting assumptions or hopes.” According to research by Minson, Ruedy, and Schweitzer, people are more likely to affirm “an untrue, [optimistic] statement than by negating a true statement.”
Finally, consider whether the negotiation is a one-time event or part of a longer-term series of negotiations. It becomes more difficult to remember (or identify) the lies the longer the discussions continue, and the possibility of achieving a meaningful win-win outcome becomes more remote.
4) Encourage Reciprocity
Especially in face-to-face conversations, “humans have a strong inclination to reciprocate disclosure: When someone shares sensitive information with us, our instinct is to match their transparency.” By building trust, each party is less likely to lie - and more prone to divulge information - than they would with strangers.
When preparing for a negotiation, identify disclosures you can make that are meaningful but that won’t undermine your bargaining position. Remember, if you disclose too much, “your counterpart might take advantage of you; disclose too little and you miss opportunities to discover mutually beneficial trades… Share a substantive but not critical piece of information.”
5) Play the ‘Long Game’
Whether it’s a once-and-done or a series of negotiations, always approach your counterpart(s) as if you are playing the long game. If you keep your overarching goals and objectives in mind, you’re more likely to focus on your brand reputation, both your own and the organization you represent. Your ability to achieve a win-win outcome will leave a lasting, positive impression with your counterparts, as well as open doors and provide potential business referrals. The intangible benefits of achieving a win-win negotiation can be substantial.
Sources: Denis Leclerc, PhD, at Thunderbird School of Global Management; Harvard Business Review; and Getting to Yes: Negotiating Agreement Before Giving In by Roger Fisher, William Ury, and Bruce Batton
