How To Create A Win-Win Outcome For Your Next Negotiation

Here are four different ways to get to win-win
Image Credit: United Way of Anchorage

As negotiators we’ve all heard about the power of being able to reach a win-win agreement with the other side of the table. This is not always an easy thing to do. It may be our ultimate goal, but more often than not how to reach that goal can prove to be elusive. However, the good news is that there are a number of different negotiation styles and negotiating techniques that we can use in order to create situations in which both sides in a negotiation can reach a win-win agreement.

Work Together To Perform Joint Fact-Finding

When a negotiation that you are working on threatens the status quo, the other side is typically fierce. At such times, you might think that the key to a win-win contract is to try to enlighten the other side about how the proposed goal will further the common good.

It turns out that this view is wrong. When you communicate one-sided information about a project’s merits, you’ll come across to the other side as being arrogant and oblivious to their concerns.

By contrast, engaging in a joint fact-finding process provides a better route to reaching a win-win outcome. It begins by engaging both sides 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. Whenever parties are likely to disagree on the fundamental issues at stake, getting outside help for an unbiased view of the facts can be a crucial first step toward reaching a win-win deal.

Create More Value For Both Sides Through Trades

When you are determining how to create win-win situations, one strategy is to look for ways to find more value through trades. First, you need to prepare to present multiple proposals—all of which you value highly—to the other side at the same time. Their reactions to these proposals will help you better gauge their preferences across issues. Second, take the time to ask lots of questions to directly assess their interests and reveal your own. Third, make hypothetical “What if…” proposals to determine if a trade genuinely creates value for both sides involved in the negotiation, such as “If I offered you a 10% discount on our new products, would that be enough of an incentive for you to switch from our competitor’s product?”

Try Out A Contingent Agreement

In a negotiation, it’s very common for sides to reach an impasse because they have different beliefs about the likelihood of future events. You might be convinced that your firm will deliver a project on time and under budget, for example, but the other side may view your proposal as unrealistic. In such situations, using a contingent agreement –negotiated “if, then” promises aimed at reducing risk about future uncertainty—offers a way for both sides to agree to disagree—and achieve a win-win situation in business. You might propose paying a specified penalty for turning your project in late or agree to significantly lower your rates if you go over budget as examples.

If you want to add a contingent agreement to your contract, 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 that was created. Finally, make sure to include both the scenarios and the negotiated repercussions and rewards in your contract.

Think About Adding a Matching Right

When you are dealing with multiple potential buyers, you can 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 the buyer and seller. Such matching rights, or rights of first refusal, give buyers the opportunity to stay in the game and sellers a chance to explore their options before the negotiation is over. Matching rights can be incorporated into all types of deals across many different types of industries.

As a negotiator you need to understand that because matching rights are often imprecisely worded in contracts, they can create new problems. As an example, 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. Similarly, matching rights could possibly limit, or appear to limit, the competition to a single issue: price. These facts can constrain buyers from competing on other issues and sellers from shopping for the best all-around deal. Finally, it is common that 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. Do not blindly accept boilerplate language on matching rights. Instead, take the time to negotiate for terms that will lessen your odds of overbidding if a contest arises down the road.

What All Of This Means For You

Every negotiator would like to find a way to create a win-win outcome for their next principled negotiation. However, achieving this in a negotiation is a tough thing to do. The good news is that there are a number of different techniques that we can use in order to boost the probability of us being able to reach a win-win outcome in our next negotiation.

One of the simplest ways to increase our chances of being able to create a win-win outcome is to convince the other side to work with us and engage in some joint fact finding. If we can explore the facts before everyone takes sides, we have a better chance of being able to reach a win-win outcome. We can also take a look at what is being negotiated and find a way to make trades with the other side. Additionally, we can also create contingent agreements that allow both sides to make “what if” bets about the future. In negotiations where we are dealing with multiple bidders, we can incorporate matching rights into our next contract and allow the other side to match the best agreement that we get from someone else.

The good news is that a win-win agreement is what everyone wants to get out of their next negotiation. As negotiators it is our responsibility to make sure that we know the techniques that we can use to cause a win-win agreement to happen. We’ve covered four different ways that you can use to make a win-win outcome happen in your next negotiation. Take the time to study them and then put them to work for you!

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

Question For You: When you are creating a contingent agreement, how many different scenarios do you think that you should cover?

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