Negotiating a Win-Win Requires Trust

Negotiation a Win-Win


Squeeze or Satisfy?

Great negotiators know how to gain a strong position, hold their cards closely to their vests, and use their position to squeeze all kinds of concessions from the other party, right? Not according to my own experience and many negotiation experts. In their seminal book, Getting to Yes (1991, revised 2011), Ury, Fisher, and Patton argued that negotiators should focus on satisfying the interests of all the parties, rather than focusing on dividing up the pie. In colloquial terms, we call this the “win-win”—where both sides walk away having their underlying concerns, needs, desires, and fears satisfied.

Pareto-Efficient Frontier

The win-win is actually a technical concept called the “Pareto-efficient frontier” (Raiffa, 1982), which scholars have been studying for many decades. Here’s the idea: a negotiated agreement is completely efficient if there is no way to add more value for either party. In other words, no value to either party was left on the proverbial negotiating table. Sounds simple, but it quickly gets complicated, especially when the parties attempt to qualify and quantify the value they place on their various interests. Ideally, the parties would trade away items they don’t value, which the other side highly values. But how do you know what the other side values? And how can you get what you highly value, if the other side has no idea what that is? The simple answer: the negotiators have to tell each other.

Reveal Your Interests

Yes, negotiating Pareto-efficient, win-win agreements requires sharing your concerns, needs, desires, and fears with the other party. Scary, right?! Yes, it is. For many people this idea goes against everything they have learned and been told about negotiations. But the truth is that great negotiators build trust between the parties, so they may share each other’s value lists, and then find a solution where both parties walk away with the most possible value (given that some value will still need to be distributed between the parties).

Build Trust

In the MBA class I teach on negotiations, students engage in various negotiation simulations where students learn, first-hand, how establishing trust can lead to big wins for both parties, while failing to build trust results in negotiating over mere crumbs—a huge missed opportunity. A great online simulation that illustrates the game-theory of establishing trust can be found at https://ncase.me/trust/ .

Quick Tips

In summary, here are some quick tips for being a great negotiator:

  • Be worthy of the other party’s trust!
  • Seek to understand the other party’s underling concerns, needs, desires, and fears
  • Share your concerns, needs, desires, and fears with the other party
  • Work together to find creative ways to satisfy each other’s interests
  • Write the other party’s victory speech and share it with other party

References

Fisher, R., Ury, W. L., & Patton, B. (2011). Getting to yes: Negotiating agreement without giving in. Penguin.

Raiffa, H. (1982). The art and science of negotiation. Harvard University Press.

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