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A win-win strategy is the best way to succeed in negotiations

by Stephen Hawley Martin
for Virginia Business
January 17, 2006

Let's face it. People make decisions based on their own interests. It follows, then, that the key to successful negotiating is finding creative and effective ways of satisfying those interests - theirs, while meeting yours as well.

In his book, Billion Dollar Turnaround: The 3M Spinoff that Became Imation, Bill Monahan explains a negotiation technique that helped pull his company back from the brink of disaster. First, Bill says, determine who on the other side will be involved in the negotiation and what they need. This is called "stakeholder interest identification." Second, determine what can be done to get them what they need so you can get what you want. Third, develop a plan concerning what to do if no agreement is reached.

Say you are entering negotiations to acquire a business. People in your company from different departments, such as marketing, sales, finance, R&D, customer service and manufacturing, likely will be able to provide different perspectives on the business you are thinking of acquiring and the effect the acquisition will have on your business. Get these people together. When you go around the room, you are likely to find very different points of view. The legal people will think one thing. The marketing people another. The financial people will have a third approach. Each group views a situation from a unique perspective. So you not only factor in these diverse viewpoints, you see where they are aligned.

Then map out where you want to go. Ask questions such as, "What can we do to get them what they need?" Drawing upon the knowledge and creativity of the entire team, different ways of satisfying interests can be identified. For example, you may be trying to negotiate a contract for raw materials or parts, and there's a price the supplier simply isn't going to go below. Even so, you might need a lower price, so the team would brainstorm about options. You might decide to offer a longer-term contract, or an attractive benefit in some other area of the business, or part of the country. The objective is to meet the supplier's financial needs while still getting what your company wants and needs out of the deal.

Brainstorm and evaluate the effects different actions will have on each stakeholder. Before accepting or rejecting a deal, it helps to understand how the proposal and the alternatives satisfy or harm everybody's critical interests. This way, when you go in, you know if you don't make things work, the stakeholders are likely to take such and such an action. You have to ask yourself, "Can I live with that?"

Consider packages of actions. These might include things you don't like but still make sense as part of an overall plan that on balance is good for you. Eventually, once you have it all out on the table, you are in position to develop a proposal. Then you will be able to build trust with your negotiating counterparts by laying out and agreeing on their interests and your interests. You may be surprised how fast concurrence will be reached. Your counterparts will quickly and readily relate to their interests, including some they may not yet have focused on. It will become clear to them what they will have to give up if an agreement isn't reached, and this can be very powerful.

What happens if there is no resolution? This is when you resort to your fighting alternatives. Stakeholders will try to satisfy their interests unilaterally. They may even try to harm the interests of others. The consequences of each alternative need to be evaluated and the effects of the fighting alternatives respectfully communicated.

You may go through this process and find, when all is said and done, you don't have much of anything the other business wants. You are much better off knowing this sooner than later. Since you have no bargaining chips, you can quickly move on to something else and not waste your time or theirs. Armed with this knowledge, you won't end up doing a bad deal because you hate walking away from the table.

It goes against some people's nature to give up easily. They figure some part of a deal is better than no deal at all. But experience shows it's possible to be terribly wrong about this. Face it, it is human nature for people not to walk away from something they think they want. They hang on too long, and take a lesser deal. Later, when reality sets in, they have regrets.

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Stephen Hawley Martin is a former principal of The Martin Agency in Richmond and the author of more than half a dozen books including his newest, Lean Enterprise Leader: How to Get Things Done Without Doing It All Yourself. He is editor and publisher of The Oaklea Press, a book publishing business dedicated primarily to helping business executives increase productivity.