Negotiating Win/Win Deals
Negotiating Desirable Outcomes
You may not realize it, but you are involved in
negotiation a good part of every day. Any
negotiation--whether it involves settling on the price of a
product or service, agreeing to the terms of a job offer, or
simply deciding on a bedtime for your children--ends in one
of five possible outcomes: (1) lose/lose, in which neither
party achieves his goals; (2) lose/win or (3) win/lose, in
which one party achieves her goals and the other does not;
(4) no outcome, in which neither party wins or loses; and
(5) win/win, in which the goals of both parties are met. It’s
easy to see that numbers 1 and 4 are less than ideal, as is
number 2 if you are the one who loses! But what about the
other two outcomes? Isn’t win/lose just as desirable as
win/win, as long as you are the winner?
The Win/Lose Outcome
In some negotiations, you will be the winner and the
other party will be the loser. At first, it may seem that
this is the ideal situation for you. But think about it. If
you have ever lost a negotiation, you know that the feeling
is not pleasant. A significant problem with a win/lose
outcome is that one person walks away with unmet needs--and
this person is unlikely to be willing to engage in future
negotiations with the other party. Ultimately, this sets up
the potential for a lose/lose outcome.
A good example of this situation occurred when I was a
salesman in the printing business. I had a client who
purchased printing on a regular basis. This person had a
reputation for being both a shark and a jerk. Not only would
he beat down my price, but he would also be rude and
verbally abusive through every step of the job. For him,
this may have seemed like a win/lose situation, with me as
the loser. After several jobs, however, it became apparent
to me that the stress of working with this individual was
costing me more time, energy and grief than the jobs were
worth. Eventually, I began quoting his jobs at twice the
normal markup and refusing to budge on the price, changing
the balance in this lopsided relationship. Of course, after
a while, the client refused to deal with me, creating a
lose/lose outcome.
Achieving a Win/Win Outcome
The best outcome for almost all negotiations is win/win,
when both parties walk away with a positive feeling about
achieving their goals. But how do you accomplish this ideal
situation? There are four keys:
1. Avoid narrowing your negotiation down to one issue.
When you focus on just one issue, there can be only one
winner. A common example is arguing over the price of
something. To avoid creating a win/lose outcome, you can
bring other factors into the negotiation, such as delivery
fees, timing, quality, supplemental goods and services, and
so on.
2. Realize that the other party does not have the same
needs and wants you do. If you think the other person’s
goals are exactly the same as yours (for instance, a
"good" price, which may mean different things for
the two of you), you will have the attitude that the other
party’s gain is your loss. With that attitude, it is
virtually impossible to create a win/win outcome.
3. Don’t assume you know the other party’s needs.
Negotiators often think they know what the other party
wants. Salespeople may assume that buyers want to pay the
lowest possible price for a product. But many buyers have
other needs that may influence their decision to buy. By
asking questions, a skilled salesperson may find, for
example, that a buyer's biggest concern is not that she pays
the lowest price, but that her boss perceives the purchase
decision as a good one. This knowledge allows the
salesperson more negotiating room.
4. Believe point number two in your heart. Most
novice negotiators acknowledge that the other party probably
does not have the same goals they do, but once the actual
negotiation commences, this acknowledgement vanishes from
their mind.
The importance of understanding that a counterpart’s
goals may be different from yours was illustrated in a
historic negotiation that took place in the late 1970s. At
the time, the Chrysler Corporation was fighting for its
financial survival, and its only hope was to obtain a
guaranteed, subsidized loan from the U.S. government.
Unfortunately for Chrysler, it seemed the majority of
Americans were dead set against the government bailing the
company out. Chrysler's chairman, Lee Iacocca, realized that
the needs and goals of the members of Congress were not the
same as his. They needed to keep their constituents happy,
not save the Chrysler Corporation. With this in mind, he
went before Congress and explained to the politicians that
he represented, not only himself and Chrysler's 147,000
employees, but also Chrysler's 4,700 dealers and their
150,000 employees, plus Chrysler's 19,000 suppliers and
their 250,000 employees. Then Iacocca explained exactly how
many people would be adversely affected in each Congress
member’s district if the loan was not granted. With
superior planning and research, Iacocca was able to
transform his goals into the politicians’ goals. Not
surprisingly, when the vote was taken, the loan passed by a
margin of 2 to 1 in the House and 53 to 44 in the Senate.
Since Chrysler paid back the loan in full three years later,
this negotiation left everyone winners.
Setting Up for Success
Since few negotiations are one-time affairs, it is
usually in your best interest to work toward a win/win
outcome. When both parties walk away from a negotiation with
a good feeling, they will probably be willing to negotiate
with each other again. Using all your skills to ensure that
you and the other party feel like winners is simply
good business!
Peter Barron Stark is president of Peter Barron Stark
& Associates. He travels internationally training
procurement specialists, sales professionals and other
leaders in the art of negotiation. www.negotiatingguide.com,
(877) 727.6468
©Peter Barron Stark & Associates, 2000
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