Image Credit: Owen Thomas
As negotiators, one of the key points about negotiating that has been drilled into our heads is that in order to be successful, we always have to be able to use our negotiation styles and negotiating techniques to reach a deal with the other side of the table. There has to be a common middle ground that both of us can agree to. If we are not able to reach this point, then we have failed as negotiators. Although this is classic negotiating training, it turns out that in the real world things are a bit different. There are situations in which reaching a lose-lose agreement might be in the best interests of both sides.
When You Negotiate, You Always Have To Bring Your BATNA
During a negotiation, reconciling both side’s different interests in the pursuit of a resolution often assumes that a negotiated agreement will offer a more desirable win-win negotiation outcome. However, negotiation studies have shown that sometimes lose-lose outcomes are your BATNA (Best Alternative to a Negotiated Agreement) in a negotiation. Does negotiation research promote the creation of joint gain at the expense of relationship building?
If you needed an example of what we are talking about, you can apply author O. Henry’s classic tale “The Gift of the Magi” to one of your negotiations. The short story describes a poor but loving husband and wife who want to give each other the perfect Christmas gift. Della sells her beautiful long hair to buy Jim a platinum chain for his prize possession, a gold watch. Meanwhile, Jim sells his watch to buy a set of tortoise shell hair combs for his wife’s hair.
Negotiators are very familiar with this story. Many of us would claim that the couple’s gift exchange had a “lose-lose” outcome. In fact, as O. Henry describes, Jim and Della’s material losses are overshadowed by their deeper appreciation of their love. What we need to understand is that negotiators might be better off forgoing economic value in favor of improving their relationships. Indeed, it appears variables that improve economic performance may actually harm some bargaining relationships.
How Can You Use Lose-Lose To Get What You Really Want?
In one negotiation study, pairs of negotiators engaged in a negotiation role play simulation. Half of the pairs were told that they worked for a firm known for its “extremely hierarchical corporate culture.” The other pairs were told that they worked for a firm known for its “egalitarian corporate culture.”
Those pairs who worked in an egalitarian culture achieved less joint gain at the bargaining table than did those pairs working in a hierarchical culture. However, those in the hierarchical culture came to less equal negotiated agreements. Negotiators from the egalitarian culture placed much greater value on their relationship with their opponents than did the negotiators from the hierarchical culture. This study holds many answers for us as negotiators.
These results suggest that business negotiators should shift their attention from an integrative negotiations (value creation) focus to one emphasizing relationship building. But are the two goals truly incompatible? The best route is to focus on creating strong relationships and using the openness and honesty they foster to maximize mutual gains in negotiation scenarios. If we can accomplish this during our next negotiation, then we can be assured that we’ll be able to walk away having created a better relationship with the other side no matter if a deal was reached.
What All Of This Means For You
As negotiators we have been taught that it is our job to be able to reach a deal with the other side of the table no matter what the cost. It turns out that these instructions may be a bit off. There are cases in which the BATNA is one in where each side loses something but gains a closer or deeper understanding of their counterpart at the bargaining table.
When we start a principled negotiation, we often are looking for a way to create a win-win solution. It turns out that building a relationship with the other side of the table is a very important task for us to accomplish during any negotiation. The one thing that we don’t want to do is to reach a deal with the other side at the expense of our relationship with them. There may be cases where we should forgo the economic value in favor of improving the relationships.
This is a new way to look at negotiating and it may take negotiators a while to fully comprehend just exactly what this means. What we need to learn how to do is to look beyond the current negotiation and try to fully understand what the value of developing a deeper relationship with the other side of the table could mean for our side. If it turns out that this is something that we would value, then the desire to reach a deal with them will have to take a backseat to deepening our relationship with them.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: Can you think of a case where the deal matters more than the relationship would?
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What We’ll Be Talking About Next Time
The goal of any negotiation is to find a way to reach an agreement with the other side of the table. The challenge that we run into during this process is that no matter what negotiation styles or negotiating techniques are being used we need to understand what the other side wants and the only way that we can get that information is if they tell us. However, sometimes we run into situations where the other side is not telling us the truth – they lie. When we find ourselves in these situations, it’s going to be even more of a challenge to reach an agreement with the other side. We need to know what action to take based on what kind of lies are being told.