Basics of Win-win Negotiating

If you heard anything about negotiations you probably heard about win-win negotiations (WWN) as well. As a matter of fact you might have heard the term even if you never dealt with negotiations at all. It’s a very popular buzzword in business, politics, etc. But doesn’t it sound like an oxymoron? Negotiations term in our minds typically translates to two sides with conflicting objectives trying to find a compromise, what can win-win term to do with it?

Well, the first and the most important step in reaching win-win outcomes, is getting away from the cliché above. You need to put yourself in a different state of mind, and that is not that at all complex. If you approach negotiations as “two parties with conflicting objectives trying to find a compromise” that what your negotiation process would be. Negotiations in this case is very much like a sport game or a bitter divorce – there is a fixed amount of assets that could be divided between two parties. In reality most of the businesses negotiations deal with substantially more assets that meets the eye and the assets do not need to be “divided” but distributed / redistributed in some manner, more so in many negotiations new value is created increasing the negotiations asset pool dramatically. Understanding of it allows you to focus on maximizing overall value as well as the value gained by each party, and that leads you to win-win negotiations.

Going forward in this post let’s consider negotiating an initial offshore contract as the main example. Getting to a final contract signature could be a very complex and lengthy process with legal, ops and execs involved, with emotions flying high, many things going wrong, and some seriously bruised egos; that feels in matrimonial terms as a dressed rehearsal for a bitter divorce. Negotiation initial contract could be also a well organized process akin to planning session for long and complex journey.

The first scenario besides being hard on you is also almost a certain recipe for engagement failure. Let’s discuss some of the main techniques and tools that help change typical carpet trading style bargaining into professional win-win process negotiations that are easy on our nerves and establish solid foundation for the engagement success:

Put yourself in WWN state of mind:

  • First thing you need to do is to realize that there is a variable amount of resources to be divided / redistributed and both sides can “win”. Take for example an MSA, I’ve seen some that were just one page long and some over 20 pages long. They serve the same purpose and in large degree touch on the same topics. The breadth and more so depth of them is quite different with longer versions offering many more elements to discuss / negotiate.
  • Starting from early steps of the negotiations your dominant concern should become to maximize joint outcomes. Think about the process of WWN as a process of creating value. In particular search for options of providing additional value for your negotiating partner. For example if you are on a buyer side that might include references, leads, sharing development expertise, helping with building the process maturity, etc.
  • You need to get to a realization that there are many tangible and intangible benefits both parties can offer each other in addition to hard-core contract ingredients. Take for example references or leads a customer the parties can exchange.
  • Understand that the opponent’s interests are not necessarily the way you perceive them, so take the most positive view. Put yourself in your negotiating partner shoes and take the most optimistic outlook at what they may be trying to accomplish. For example, if you are on a buyer side think in terms “if I were the vendor what value I could provide to the buyer? What can I do to exceed their expectations”
  • Focus on interests, not positions, including your own. That is very important point, it is all too often we forget the goals we are trying to accomplish and get our horns locked in fighting on positions, pursuing fleeting often irrelevant objectives. Many times I’ve seen people forgetting the topic of negotiation and only striving to look good, win, prove the point, etc. Well I’ve done it myself…

You can start establishing the foundations of the WWN right after and only after you put yourself in WWN state of mind. One of the most important steps in establishing the foundations is making sure that WWN is indeed a possibility:

  • Always initially ask for more than you expect. That serves to multiple purposes, one of the most important being establishing negotiation space, which in turn helps your opponent to avoid “losing face”.
  • Look for points to negotiate and by all means avoid single-threaded negotiations. When you get to a single-threaded negotiation, or negotiating upon a single point (most common would be “the rate”) the chances of “building additional value” disappear as negotiation turns to dividing a limited amount of resources between two parties. Keep as many points open as possible till you are ready to get to the closure.
  • Get you opponent to act in WWN manner as well. Make sure that your negotiating partner understands that your position is “win-win or no deal”. Get your opponent to take same position as well. That could be not trivial and require substantial effort if your opponent doesn’t have experience in WWN or doesn’t believe in WWN.

The process of WWN is not overly complex; it’s just different from what many people consider “the right thing to do” when it comes to negotiations. In “typical” negotiations one person’s interests oppose the other’s. The dominant concern in this type of bargaining is usually maximizing one’s own interests. Dominant strategies in this mode include manipulation, forcing, and withholding information. In WWN dominant concern is to maximize joint outcomes and dominant strategies include cooperation, sharing information, and mutual problem solving.

After the parties established WWN mindset and environment the process moves towards building a partnership dealing with elements that parties have opposite interest in becomes non-confrontational collaboration rather than face to face combat so common for haggling. When you encounter a topic of that divides / pulls parties apart consider the following techniques:

  • Seek out (brain storm) mutual gain opportunities through out your negotiation process. Every turn in the negotiation offers additional opportunity for discovery and broadening the negotiation landscape. Generate a variety of possibilities before deciding what to do / how to proceed.
  • Seek objective or legitimate standard to base an outcome on, to evaluate the solution. For example Net 30 is the most common (standard) payment term in SMB environment for outsourcing contracts. Working with large organization such as government or pharma you likely have to consider Net 60, when dealing with contractors you may want to consider Net 15 or due upon receipt.
  • Build on commonalities rather than address the differences, consider “we are in this together” as the main metaphor. Sometimes to bring you and your opponent (negotiating partner) on the same side it helps to find a “mutual enemy”. For example when building a initial outsourcing contract instead of fighting around common problems such as “what if you will not deliver on time and my resources are spinning wheels waiting for you…” consider “loss of productivity” as a “mutual enemy”. That set of mind promotes by far more productive discussion and typically results in better contractual framework.

OK, the title of this post is “Basics of Win-win Negotiating”, “basics” not “insights” or “advanced techniques” and I think I am way deep in the weeds now. So, I guess I should stop now… And thank you so much if you still reading. I am afraid I lost most of my readers by now, including myself…

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