“Win-Win” Does Not Just Happen: How To Create A “Win-Win” Negotiation

Win-win can be an elusive goal in any negotiation
Win-win can be an elusive goal in any negotiation
Win-win can be an elusive goal in any negotiation
Image Credit: Financial Times

Yes, yes – I’m sure that we’ve all at least heard of the book “Getting To Yes” and with a little luck a number of us have actually read it. The gist of the book is that you can use your negotiation styles and negotiating techniques to negotiate better deals if you can find a way to create a deal that benefits both parties. This “win-win” deal is highly desirable, but at times it can appear to be very hard to achieve. As negotiators, what we need are some tips for our next negotiation that will show us how we can make win-win work for us.

Spend Time Working On Joint Fact-Finding

Every negotiation is different. The impact of reaching a deal with the other side may end up threatening the current status quo. When you find yourself in a situation like this, you are going to have to proceed cautiously. There will be resistance to reaching any deal and you might be tempted to tell the other side how good this deal will be for them. Don’t do this.

If you attempt to tell them this, then you are just going to come across as being arrogant and oblivious to the other side’s concerns. A much better approach is to take the time to engage in a joint fact-finding process with the other side. This process begins by engaging the other side in a collaborative exploration of a project’s feasibility and merits during its earliest stages, with the help of outside experts, before everyone begins taking sides. There will always be disagreements. Enlisting outside help for an unbiased view of the facts can be a crucial first step toward reaching a win-win deal.

Create Value Through Trades

In order to find a way to move your next negotiation towards a win-win conclusion, you may want to consider taking the time to look for ways to create more value for both sides through a series of trades. The best way to go about doing this is to prepare to present multiple proposals—all of which you value highly—to the other side at the same time. How they react to these proposals will help you better gauge their preferences across issues. Don’t stop there. Ask lots of questions to directly assess their interests and reveal your own. Finally, make hypothetical “What if…” proposals to determine if a trade genuinely creates value for both sides.

Try Contingent Agreements

So why do our negotiations grind to a halt? One of the most common reasons is that the other side has different beliefs about the likelihood of future events. Sure you think that your firm will deliver a project on time and under budget, for example, but the client may view your proposal as unrealistic.

In such situations, a contingent agreement my be called for. This type of agreement is one in which you negotiate “if, then” promises This type of agreement is aimed at reducing risk about future uncertainty. It can offer a way for parties to agree to disagree—and still achieve a win-win situation in business.

The first step in adding a contingent agreement to your contract is to begin by having both sides write out their own scenarios of how they expect the future to unfold. Then negotiate expectations and requirements that seem appropriate to each scenario. Finally, include both the scenarios and the negotiated repercussions and rewards in your contract.

Consider Adding a Matching Right

While you are negotiating with someone, there is nothing that says that you can’t be talking with other people at the same time. For that matter, there is nothing that says that the other side can’t be talking to other people also. The awareness that someone might get a better deal from someone who is not currently at the negotiating table can serve as a blocker to reaching a win-win agreement. One way around this deal killer is to grant a buyer the right to match or improve upon another bidder’s offer within a set period of time. This can help answer the question of how to create win-win situations for both buyer and seller. Such matching rights, also known as the rights of first refusal, give buyers the opportunity to stay in the game and sellers a chance to explore their options. Matching rights can be incorporated into all types of deals across industries.

This may not solve all of your problems. Issues can arise because matching rights are often imprecisely worded in contracts and this means that they can create new problems. It may be unclear, for example, if a buyer will end the contest when it matches a third party’s bid or if the match will trigger a bidding war. When adding matching rights to their contracts, buyers often overlook the importance of having ample time to decide whether to match a competitor’s offer. So don’t blindly accept your lawyer’s boilerplate language on matching rights. Instead, negotiate for terms that will lessen your odds of overbidding if a contest arises down the road.

What All Of This Means For You

Although in the heat of battle it can be somewhat difficult to remember just exactly what we are really trying to accomplish as negotiators, it turns out that we’d really like to be able to reach a deal with the other side that everyone can live with. There is a fancy name for this type of deal – it’s called a “win-win” deal. Although highly desirable, this type of deal can be very difficult to achieve during a principled negotiation for a variety of reasons. However, with some guidance, negotiators can boost their chances of being able to walk away from their next negotiation with a win-win deal.

Just because we know that a deal would be good for the other side does not mean that they know that it would be good for them. Instead of just telling the other side that the deal that we are proposing is in their best interest, instead we need to engage them in some joint fact-finding. We need to help them to discover that the deal that is on the table is in their best interest. Sometimes it’s going to take some motivation to get the other side to agree to a win-win deal. We can help move the process along by being willing to make trades with the other side. These trades will shape the deal and make it more palatable to the other side. None of us is very good at predicting the future and the other side may be wary of entering into an agreement with us because they don’t know how the future will unfold. In these cases, we can use a contingent agreement to work “if-then” language into the deal that will cover future possibilities. Finally, there is always the possibility that someone else may make a compelling offer while the negotiation is going on. In cases like this it can be helpful to include a matching right in the agreement that will allow the other side to match any other offer that is made. However, you need to be careful how you word this part of the agreement.

We all want to be able to reach a win-win agreement with the other side. These are the types of agreements that both sides have no problems fully committing themselves to fully implementing once the negotiating is over and done with. However, a win-win agreement can be very difficult to achieve. Follow these suggestions and see if you can make this happen during your next negotiation.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: How quickly do you think you should require the other side to match any offer that you get from an outside party?

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What We’ll Be Talking About Next Time

This business of negotiating is a tricky business indeed. No, we don’t always want to show up at the negotiating table and use our negotiation styles and negotiating techniques to lay all of our cards out in front of the other side. However, there appears to be a fine line when it comes to lying. Just exactly how far is too far? More importantly for you as a negotiator, how should you handle it if when you are negotiating with someone you start to realize that they are not being truthful with you?

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Over the last 25 years, Dr. Anderson has transformed failing negotiators worldwide. Dr. Anderson will turn these missed opportunities into successful deals.

 

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