How To Create Value During A Negotiation

Resources in a negotiation are not really a fixed pie
Resources in a negotiation are not really a fixed pie
Resources in a negotiation are not really a fixed pie
Image Credit: Alan Levine

At lot of us go into a negotiation like we are getting ready to go to war. We do our research, make sure that we know who we’re going to be going up against, prepare our demands and then use our negotiation styles and negotiating techniques to charge into battle. To us a negotiation is all about competition. The more points that we can score, the better the chance that we’re going to win this negotiation and the other side is going to lose. However, maybe we’ve been looking at this all wrong. Is it possible that the goal of any negotiation should be about creating value?

How To Create Value During A Negotiation

So here’s a question for you to think about. In the world of business, why is competition so often the norm for us negotiators, while cooperation seems like an impossible goal? How we view a negotiation has a lot to do with the kind of results that we can expect to get out of the negotiation. Sadly, one of the most destructive assumptions negotiators bring to negotiations is the assumption that the pie of resources that will be negotiated is fixed. This mythical-fixed-pie mindset leads negotiators to interpret most competitive situations as purely win-lose.

There has to be a better way! As negotiators, it is our responsibility to take the time to search for ways for both sides of the table to emerge from the negotiation as a winner This means that negotiators have to find ways to recognize opportunities to grow the pie of value by finding mutually beneficial tradeoffs among the various issues. The more complex your negotiation is, the more of an asset the negotiation will be. Tradeoffs allow you and the other side to achieve more than you would if you merely both compromised on each issue.

The first step in working to find value during a negotiation is for you as a negotiator to change your thinking. What you are going to want to do is to break your assumption of a mythical fixed pie. You need to understand that what is currently on the table in front of you is not all that is there. Once you’ve been able to do this, then, and only then, can the search for real value begin. Your job as a negotiator is to create value. In order to accomplish this, you will need to learn about the other party’s interests and preferences.

How To Discover What Value Exists In A Negotiation

In order to uncover value in your next negotiation, you are going to have to start out by building trust and sharing information. How you go about doing this will be key. Negotiators need to understand that the best way to create value in a negotiation is to share information in an open, truthful manner. We often hold back on sharing information because we believe that it may be used against us. The value created by this outweighs the risk.

Your next step has to be to ask questions. When you are doing this you need to have a goal. Your goal is to understand the other party’s interests as well as you can. The challenge that you may find yourself running into is that both parties may be unwilling to fully disclose confidential information. When this occurs, ask lots of questions! Listening and asking questions are the keys to collecting important new information. Make sure that you spend more time listening than you do talking.

Finally, you need to do the hardest thing. You need to give away a bit more information. During a negotiation, the other side may not have a reason to trust you either because they don’t know you or because of something that you’ve said to them. What do you do when trust between parties is low? Give away some information that focuses on the tradeoffs you are willing to make. Doing so can enable you and the other side of the table to expand the pie of outcomes. Plus, behaviors in negotiation are often reciprocated. When you share useful information, the other side may return some of their own. The key is to give away information that will inspire wise tradeoffs, rather than simply slicing up the pie.

What All Of This Means For You

Every negotiator wants to find a way to get the best possible deal out of a principled negotiation. All too often we approach a negotiation as a “winner takes all” type of proposition. A much better way to view a negotiation is as an opportunity for us to work with the other side and find ways to create more value that can then be shared between both sides.

When we make the mistake of thinking of the items that are being negotiated as being fixed, then we can all too easily fall into a fixed-pie mindset. What we should be doing as negotiators is looking for mutually beneficial tradeoffs among the various issues. As negotiators, what we need to realize is that our job is to create value. We can start to accomplish this by starting out by building trust and sharing information. Our next step has to be to ask questions in order to gain more information that can be used during the negotiation. Finally, we have to do the hardest thing of all and need to give away a bit more information.

If we can change the way that we negotiate we can reach better deals. Offering these things will entice the other side to do the same and then you’ll be that much closer to closing a deal that both sides will be able to live with. Take the time to find the value in your next negotiation and you may be surprised at the quality of the deal that you’ll be able to reach.

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

Question For You: Do you think that it would be good to add more items to the negotiations early on or later in a negotiation?

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What We’ll Be Talking About Next Time

As negotiators we all want to get better. One of the challenges that we face in trying to do this is that we often don’t know what areas we should be working on. When you look at what negotiating consists of, there are many different areas such as negotiation styles and negotiating techniques and if we’re not careful, we can spend a lot of time working on things that won’t provide us with a lot of value. I’ve taken a look at what I teach my negotiating students and from all of that material I’ve boiled it down into what I believe are the top 10 skills that we all need to have in order to be successful negotiators.

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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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