I play a lot of sports.
As a child, I was always playing outside with my friends. In high school I played on several sports teams. Now I spend my summers playing golf (don’t ask for scores) and winters playing hockey.
Sport is competitive. There are winners and losers. I can’t recall a single time when I was ever a co-winner at something.
Even when I go fishing, either I win or the fish does.
This is why the very idea of a “win-win negotiation” has always confused me.
If you go into a negotiation with the intention of “winning” something, your mindset is that your counterpart is an adversary and in order for you to win, they have to lose.
Sometimes that’s appropriate.
If your supplier takes you to court for a breach of contract, you want them to lose. Lawsuit isn’t a negotiation. They’re not your counterparts, they’re your adversaries.
But in negotiations, real value is created when both parties take a collaborative approach instead of trying to manufacture “win-win” scenarios.
How to Create Value in Negotiations
O n negotiation we must not focus on Win-Win deal, you should always have a clear understanding of what’s most important and what’s less important to your side.
The goal of the negotiation is to trade off some of the less important items in order to “win” as many of the more important items as you can.
But if all you’re focused on is what’s important to you, you won’t get a sense of what’s important to your counterpart and risk leaving real value on the table.
Here’s a common example.
A supplier’s success is typically measured by annual sales revenue which is directly correlated to the number of customers they have. Therefore, suppliers are always interested in getting more customers.
In a negotiation, suppliers will be receptive to anything that will help them attract more customers — like testimonials, case studies, and referrals.
Yet, these things are often overlooked in the interest of creating “win-win” scenarios.
3 Steps to Being a Collaborative Negotiator
Taking a collaborative approach not only allows both sides to maximize their value in a deal, it actually creates more value and strengthens relations with strategic partners.
#1 – Needs Analysis
Create an exhaustive list of everything you could possibly want in a deal, prioritized by what’s most important to least important. Then do some research on your counterpart to determine what they might want in a deal, by order of importance.
#2 – Value Creation
Share your list with your counterpart. Not the entire list or the order of importance, but enough to show your willingness to create value. This slight opening of the kimono will create dialogue and an exchange of ideas that could create value in areas that neither side had even considered.
#3 – Value Distribution
Share the value that’s being created. One of the most easy and effective ways of building trust in a negotiation is by looking out for your counterpart. It’s also a great way to get to their back table (see last week’s post). Again, your counterparts are human beings with human concerns driving their decisions. Alleviate their concerns and they’ll move mountains for you.
Forget Win-Win Deal. Start collaborating.
Negotiations can sometimes feel like a battle, but they don’t have to. With a little bit of homework and willingness to collaborate, both sides can create real value and avoid chasing the illusion of a win-win deal.