In one of the most famous quotations in film history, The Godfather Don Vito Corleone decides to settle a negotiation by “making him an offer he can’t refuse”. Although the words allude to a mutually beneficial agreement, the film scene that follows is hardly an example of a win-win situation (whether you like horses or not). So what’s a true win-win negotiation?
Win-win: splitting everything in half?
A win-lose mindset seemed to dominate negotiations until the 80’s. The collaborative spirit described in the classic Getting to Yes1 , writes MIT professor Lawrence Susskind2 , changed the way. Business negotiators now understand how important reaching a win-win negotiation is: when both sides are satisfied with the outcome, a long-lasting and successful business partnership is more likely to emerge.
A win-win negotiation involves working to get the best deal possible for yourself while also working to ensure that your counterpart is satisfied. However, there are a few misconceptions about win-win negotiations:
• Being “fair” means splitting resources right down the middle. This is not true. Win-win situations may be about benefits that are hard to measure but of great value.
• When one party makes a concession, the other should automatically make one. Again, this is not true. Negotiating on a “win-win” basis means taking into consideration the needs of the other party. A concession of small or no value to the other party offers no such indication.
• Conflict and tensions should be avoided at all cost. On the contrary, diffusing emotionally charged situations may be a crucial step towards a satisfying end. The “Don’t get mad, get everything” slogan3 , pacifying as it may sound, is definitely a “win-lose” mentality.
Achieving a “win- win” situation requires more than sacrificing a short-term bonus for long-term credibility. It means motivating the other person to do the same and signalling your willingness to cooperate through smart design. I recommend working on 3 areas:
1. Building Trust
• Use your Network: Have other people open doors for you. Seek out referrals and recommendations. If you’re recommended by a friend or colleague to a potential counterpart, he or she will probably treat you better than they would if you didn’t share a common bond. If possible, choose the people you’d like to negotiate with.
• Build Rapport: People tend to respond to others’ actions with similar actions. If we cooperate and treat others with respect, they may do the same. Don’t assume this means simply exchanging a few friendly emails before meeting in person. Building rapport is an investment. Meet for an informal lunch or two. Research suggests that when you’re dealing with a particularly competitive negotiator, it might be a good idea to share some appetizers or visit a restaurant where it’s common to share dishes.
• Do some background Research: Trust is the combined result of being perceived as an expert and being liked. Networking and building rapport may make you likeable, but you’ll need some background information to increase your status as an expert in the field or industry of the people you’re negotiating with. Get to know your counterpart. Explore their industry history and business vocabulary. Finally, find out about possible cultural barriers. Do Germans tend to be reserved and hard bargainers? Avoid personal questions and tardiness. If you do business with Mexicans, you may need to adjust your body language to a more open communicative style.
2. Attending to Needs
• Take time to ask and explore: What’s important to the other party? Why? What would happen if…? Sometimes negotiators have different time horizons that enable wise trade-offs. If your counterparts are not forthcoming, make multiple offers simultaneously and ask which one they like best and why. If the other side refuses all of your offers, ask which one they liked best. Their preference for a specific offer should give you an indication about where you might find value-creating trades.
• Take time to explain your needs: Let others know what’s important to you – including your values. Highlight how you view negotiations in general, the importance of trust and flexibility for win-win outcomes. Whenever you make a noteworthy concession, tell the other party how much you’re sacrificing and what this sacrifice means to you. What would you normally have done? How do you usually deal with other clients’ requests? Why is this an exception?
3. Anticipating the Future
Things may go wrong in life, and business negotiations are no exception to that. Therefore, be ready to:
• Start by asking the other party to describe what the end of the negotiation would look like to them. What’s the best case scenario? How do they expect to evolve? This allows you to explore unspoken needs.
• When negotiating contracts, include a contingent agreement: “what will happen if…?” This offers a way for parties to agree to disagree while still moving forward. Be specific with liquated damages clauses. Negotiating penalties is not wishing for the worst, it’s an indication of pragmatism. Show good will by including the right for vendors to match any offer from a third party, if appropriate.
Surprisingly enough, The Godfather does offer useful advice for “win-win” negotiators. At some point, Michael Corleone says “It’s all personal, every bit of business. Every piece of shit every man has to eat every day of his life is personal. They call it business. OK. But it’s personal as hell.”
Perhaps this is a good reminder about why it’s important to help the opposing party come away from the negotiating table with wins (even if that simply means saving face). Building trust, exploring needs and anticipating the future can be more than strategies. They also reflect an attitude to people in general, an indication we care, summarised simply with the phrase “I’m OK. Are you OK?”
1 Roger Fisher, William Ury, and Bruce Patton’s bestseller Getting to Yes: Negotiating Agreement Without Giving In (Penguin, 1981)
2 Good for You, Great for Me: Finding the Trading Zone and Winning at Win-Win Negotiation (PublicAffairs, 2014)
3 The “First Wives Club” (1996)