How To Create A Win-Win Negotiation

Learn to use negotiation strategies to make both sides satisfied
Learn to use negotiation strategies to make both sides satisfied
Image Credit: *Ann Gordon

So I’ve got a quick question for you: what’s the goal of your next negotiation? I’m pretty sure that you’re going to tell me that you want to be able to reach a deal with the other side. I’d say that not only do you want to reach a deal with them, but you want to reach a deal with them that both sides believe that they can live with. This is the essence of win-win negotiation. I think that we can all agree that it’s something that we’d all like to be able to do; however, the big question is how can we use win-win negotiation styles and negotiating techniques to get what we want?

Strategy #1: Make multiple offers simultaneously.

Something that we all have to realize is that if we put only one offer on the table at a time, we will learn very little if the other party turns it down. By contrast, think about what happens when you simultaneously present multiple offers, each of which is equally valuable to you. If the other side refuses all of your offers, you need to ask them which one they liked best. Their preference for a specific offer should give you a strong clue about where you might find value-creating, win-win trades and generate mutual gain. In addition to identifying potential win-win opportunities, when you make multiple offers simultaneously, you signal that your flexible, as well as your desire to understand the other party’s preferences and needs. So, the next time you are about to make an offer change things up and consider making three that you value equally instead.

Strategy #2: Include a matching right

As negotiators we all understand that things can change. In fact, the other side might be talking with other people even as they are talking with us. This is why in your next negotiation, including a matching right in your contract—a guarantee that one side can match any offer that the other side later receives – can be a significant win-win move. Imagine that you’re a property owner negotiating with a tenant. You want to keep the ability to sell the apartment to someone else in the future, while the tenant wants a commitment to rent the apartment for as long as they want to. Offering the tenant a matching right—the power to match any legitimate third-party offer—would allow you to preserve your own flexibility while giving the tenant the opportunity to avoid the hassle of a move. In this way, matching rights can improve the odds of reaching a win-win agreement.

Strategy #3: Try a contingent agreement.

The one thing that neither side in a negotiation can do very well is to see into the future. What this means is that it can be all too easy for us to reach an impasse because we have different beliefs about the likelihood of future events. A contingent agreement—negotiated “if, then” promises aimed at reducing risk about future uncertainty -offers a way for parties to agree to disagree while still moving forward. The power of this type of agreement comes from the fact that contingent commitments often create incentives for compliance or penalties for noncompliance. You might propose paying specified penalties for submitting your proposal late or agree to significantly lower your rates if you go over budget, for example. To add a contingent agreement to your contract, begin by having both sides write out their own predictions of how they expect the future to unfold. Then take the time to negotiate expectations and requirements that seem appropriate to each prediction. Finally, include both the scenarios and the negotiated repercussions and rewards in your contract. A contingent agreement can greatly increase your chances of being satisfied with whatever remedies are in place—and help create a win-win deal.

Strategy #4: Negotiate damages upfront

Let’s face it, after the deal has been signed, bad things can happen. Since we can’t always predict what bad things can happen, we need to create ways to deal with the unexpected. Another way to foster a win-win agreement is to include liquidated damages clauses in your contract that stipulate how much will be paid if the contract is breached. Therefore, negotiating upfront exactly how much will be paid for each late or missed delivery, for example, may streamline any alternative dispute-resolution measures or lawsuits that arise. In addition, negotiating damages puts a new issue on the table—and thus expands the potential for value creation. In this manner, adding new issues to the mix increases the opportunity for win-win negotiations.

Strategy #5: Search for post-settlement settlements

Imagine that you’ve just reached an agreement. You are fairly happy with the deal, but suspect you could have gotten more value out of it. According to conventional negotiating wisdom, you should quit talking about the agreement with your counterpart and move on, lest you spoil the deal. A different approach is to ask the other party whether he would be willing to take another look at the agreement to see if it can be made better. Explain to the other side that you would each be free to reject a revised deal if it doesn’t improve both of your outcomes. This type of post-settlement settlement can lead to new sources of value to divide between you. It can also help generate a win-win contract if you didn’t have one before. Your success in hammering out your initial agreement may have established the trust needed to explore the possibility of an even better deal.

What All Of This Means For You

The goal of any principled negotiation that we participate in is to find a way to reach a deal with the other side. What would make this outcome even better would be if both sides were satisfied with the deal that was struck. Situations like this are called win-win outcomes.

In order to create a win-win outcome we need to set things up so that the other side feels as though the deal meets their unique set of needs and wants. A key way to go about making this happen is to make multiple simultaneous offers in order to determine what best meets the other sides needs. Since things can change, we need to be able to include a matching right into our deals. Additionally, we can’t read the future and so including contingency offers can help both sides agree to a deal that lives in an uncertain world. Bad things can happen and so taking the time to clarify how damages will be handled can make both sides more comfortable with the final deal. Once a deal has been reached, you may want to sit back and take another look at it with the other side just to see if you can come up with a better deal.

The ultimate goal of any negotiation is to ensure that both sides are satisfied with the deal that has been reached. A win-win negotiation happens when both sides walk away feeling good about the deal that they have committed themselves to. The next negotiation that you find yourself in, take the time to search for a win-win outcome in order to make sure that everyone is happy with the deal that will finally be signed.

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

Question For You: Do you think that you can cover all possible future events with a contingency clause?

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What We’ll Be Talking About Next Time

When we enter into a negotiation, we are facing a number of different challenges. One of the biggest can be cultural barriers to communication if the other side comes from a different background than you do. In order to overcome such issues, we need to find different ways to use our negotiation styles and negotiating techniques to communicate with the other side using manners, body language, and perhaps even our physical appearance. When we are negotiating with someone online, a number of the ways that we communicate will not be available to us. However, we are still going to have to find a way to build a sense of rapport with them.