Negotiation Skills – Win/Win Strategies

April 9, 2012

 

No one is born with magic negotiation skills. The truth about what you get out of life can be summed up pretty easily by the words of John Mariotti, “You often get not what you deserve, but what you negotiate.” Did you know that research has shown that by not negotiating your job at the beginning of your career, you’re leaving anywhere between $1 million and $1.5 million on the table in lost earnings over your lifetime? Seriously. Even a small pay boost will mean bigger annual raises and possibly bigger bonuses and it carries over to new employers, who are almost certain to ask: What was your salary at your last job? I’ll give you a moment to swear at yourself now for not having negotiated your first salary. You back now? You got not what you deserved but what you negotiated—which was nothing.

The first of this three part series will focus on the Win-Win strategy. This strategy is also known as integrative bargaining and focuses on both parties achieving their primary objectives without either feeling they lost. Prior to going into a negotiation you must choose if this is the strategy you want to take on. The goal is to collaborate and generate one or more creative solutions that are acceptable to both parties. This strategy takes more time and effort to prepare for, but allows you to continue on a long-term relationship with the other party long after the negotiation is over.

By entering the negotiation with a win-win strategy you show the other party that you truly care about their objectives and are striving to leave with both parties fully satisfied. A simple example of this would be a couple trying to decide on a movie to rent. By using a win-win strategy, they would begin by drawing up a list of only those movies that were acceptable to both parties. They would then discuss the available choices and choose a movie to see from that list, rather than arguing in favor of a movie that only one person wants to see. Now, many professional negotiators laugh at the idea of a win-win strategy and say that there is no way both parties leave and both win. They claim that no matter what one party will walk away with a bigger and better win.

Think about the example I just gave you—if you are trying to pick a movie to see with your significant other sometimes you choose a movie that you don’t really want to see, but it will make your other half happy. In that situation you don’t have a total win because you have little interest in seeing the movie picked. However, what these negotiators don’t understand is that integrative bargaining requires you to look beyond simple issues to see and understand both the short and long term needs of both parties. This explains why sometimes you sacrifice the little things and don’t always walk away with the biggest WIN. You understand that the long-term needs are more important than the short-term need you are currently facing.

A win-win strategy requires a great deal of creativity, problem-solving ability, and time, as well as a set of ultimate goals on which both parties can agree. The strategy will never survive in a climate that does not support and promote open communication—without it you will never learn the needs of the other party. How can you create innovative solutions without knowing the needs you are trying to satisfy?

This strategy works best when multiple issues are at hand. This allows for concessions and more creative solutions. Let’s look at a more complex example of a win-win strategy. Technicore—a computer manufacturer—has been negotiating with Microchipster—a computer chip vendor—over the creation of a preferred supplier agreement. Many firms seek to formalize the arrangements they have with a particular supplier or vendor in order to reduce the uncertainty of changes in price and other market conditions.

So, both organizations take a win-win approach to this solution—they look beyond price to understand both the short and long-term needs of both organizations. Typically the supplier’s interest is to maximize price, which is always at odds with the organization’s need to minimize it. Price is but one factor in the equation of needs that include issues of availability, reliability, quality, and prompt delivery and payment. It is in both parties’ best interests to find a workable solution, one that meets these multiple criteria.

After several rounds of integrative bargaining they reach a solution. Technicore wins because it can rely on receiving Microchipster’s product consistently, when it’s needed, at a fair price, and in the requested quantity. Technicore doesn’t need to search for options to find the lowest price out there. Microchipster wins because it has a consistent customer for its product, ensuring a positive cash flow, steady employment, and predictable operations. The two companies have considered the importance of a long-term relationship. They have ensured a loyal partnership for many years to come.

Please tune back in later this week for parts two and three of our negotiation styles series or contact us directly to have an IncBlot trainer present these and other negotiation skills to your organization in person.

 

 

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