WIN-WIN
© 2020 Marshall Cavendish International (Asia) Private Limited
Text © David Goldwich
Published by Marshall Cavendish Business
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National Library Board, Singapore Cataloguing in Publication Data
Name(s): Goldwich, David, 1959-
Title: Win-win : an everyday guide to negotiating / David Goldwich.
Description: Singapore : Marshall Cavendish Business, [2020]
Identifier(s): OCN 1145819419 | e-ISBN 978 981 4893 52 7
Subject(s): LCSH: Negotiation in business. | Negotiation.
Classification: DDC 658.4052--dc23
Printed in Singapore
CONTENTS
Introduction
1. Preparing to Negotiate
2. The Win-Win Mindset
3. Positions, Interests, Currencies, and Options
4. Negotiating Power and Your Plan B
5. Communication and Relationship Issues
6. Psychological Pitfalls: Emotions and Biases
7. Negotiating Tactics and Counter-Tactics
8. Wrapping Up: Closing, Implementation, and Post-Negotiation Matters
Postscript: The Future of Negotiation
The Win-Win Negotiator’s Checklist
About the Author
INTRODUCTION
We all negotiate every day, whether we realize it or not. Yet few people ever learn how to negotiate. Those who do usually learn the traditional, win-lose negotiating style rather than an approach that is likely to result in a win-win agreement. This old-school, adversarial approach may be useful in a one-off negotiation where you will probably not deal with that party again. However, such transactions are becoming increasingly rare, because most of us deal with the same people repeatedly— our spouses and children, our friends and colleagues, our customers and clients. In view of this, it’s essential to achieve successful results for ourselves and maintain a healthy relationship with our negotiating partners at the same time. In today’s interdependent world of business partnerships and long-term relationships, a win-win outcome is fast becoming the only acceptable result.
While we hear much talk about the coveted win-win outcome, this result is actually not common. Most negotiations will never result in a win-win outcome because of certain common negotiation mistakes and misconceptions. The win-lose mindset is so pervasive that it seems natural for many people. In this book, I hope to change this perception.
Win-win negotiators value their business and social relationships. They know that winning in a given negotiation is not as important as maintaining their winning relationships. Yet this does not mean that they must sacrifice their interests. Win-win negotiators believe they can win both the negotiation and the relationship. Most importantly, they understand that they can consistently achieve win-win results by developing and using a set of win-win negotiating skills and techniques.
Some people who attend negotiation seminars hope to learn the secret to being a master negotiator. Unfortunately, there is no secret. There is only a body of guidelines, principles, strategies, tactics, and skills to learn and practice. There is also psychology and an understanding of human behavior. And, of course, there are communication and interpersonal skills. None of these is a magic bullet. You must practice and improve in all of these areas.
As you become more adept, your negotiated outcomes will improve. Sometimes, you will find that one masterstroke makes a huge difference. More often, you will use a combination of skills to make incremental improvements in your negotiating ability. For example, many of my students are amazed to find that by learning one simple technique—such as making a more aggressive first offer or counter-offer than they normally would— they can achieve better outcomes in all of their negotiations.
You can study negotiation for the rest of your life. On the plus side, you can also reap the benefits of these improved outcomes for the rest of your life. Given that you negotiate every day, this can add up to a fantastic sum. So play the game and have fun! Perhaps there is a secret after all—Preparation. Most people do not prepare much for a negotiation, and many do not prepare at all. Do you see an opportunity here?
You too can develop the win-win negotiator’s mindset and learn the skills and techniques to successfully negotiate win-win agreements. The fact that you are reading these lines shows that you are interested in becoming a better negotiator—a win-win negotiator. As you continue reading, you will come to appreciate the benefits of the win-win mindset. You will find that the tools you need are not difficult to master. And you will realize that negotiating can be both fun and rewarding. Negotiation isn’t just for lawyers and wheeler-dealers, it’s for everybody, including you.
I hope you’ll practice the skills and techniques shared in this book, and enjoy your journey towards becoming a win-win negotiator.
David Goldwich
www.davidgoldwich.com
CHAPTER 1
PREPARING TO NEGOTIATE
“The man who is prepared has his battle half fought.”
— Cervantes
“The general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand.”
— Sun Tzu
East or West, it’s the same idea: Preparation is key.
WHAT IS NEGOTIATION?
We all negotiate every day, often without realizing that’s what we’re doing. We negotiate with our bosses and colleagues, our spouses and children, our customers and clients, people we sell to and people we buy from. We negotiate prices, goods, services, activities, schedules, terms, incentives, and relationships.
You probably have some idea about what negotiation is. Even without a formal definition, we know it when we see it. Negotiation is a way of satisfying your interests, of getting what you need or want. We live in a complicated world and don’t have the time, skill, or inclination to do everything ourselves. We rely on others to help us. Similarly, others approach us to help satisfy their own interests. Negotiation is the process that facilitates these exchanges.
Imagine it’s “bring your child to work” day. Your daughter is sitting quietly in your office, playing with her iPad. You say, “We’re going to a negotiation. Just sit quietly and don’t interrupt.” The kid is thinking, “A negotiation? That sounds important, I wonder what i
t is?” At dinner that evening, your wife asks her, “How did you like going to the office with daddy?”
Your daughter replies, “We went to a negotiation!”
“Oh, that sounds exciting! What was it like?”
“It was so boring! All they did was talk the whole time!”
At the most basic level, negotiation is a form of persuasive communication. It is a way of getting others to do what we want them to do. As such, it requires us to use all of our communication skills: listening, asking questions, sharing information, interpreting information, framing proposals, reading body language, influencing, and persuading. It requires empathy and understanding, knowledge and insight, diplomacy and tact.
When I ask my students what negotiation is, I get the same answers almost every time:
• It’s getting what you want.
• Two or more people interacting to reach an agreement.
• A means to satisfy your interests with the help of another.
• Give and take to make a deal.
• Compromise.
• Bargaining.
• Getting as much as you can for as little as possible.
• Getting a win-win.
While all of these may be part of the big picture of negotiation, I like to think of it in other ways.
Negotiation is an exercise in joint problem solving. Why am I negotiating? Because I have a problem or need that I cannot satisfy on my own. I need a widget. Why would my negotiating counterpart bother to negotiate with me? Because she also has a problem. She has a warehouse full of widgets that she needs to sell. Two people, two problems. And how do we approach our counterpart? We think: “I had better keep my cards close to my chest, give her as little information as possible or she will use it against me somehow, maybe even mislead her for my own advantage.” And she’s probably thinking the same thing! How can we solve our problems with all that secrecy and deception?
Consider taking the joint problem-solving approach. Two people, two points of view, two sources of ideas, working together to solve one problem: how do we reach an agreement that best satisfies our interests? If both parties can look at negotiation as a shared problem and strive to solve it together, they are both more likely to satisfy their own interests.
Unfortunately, this is not the way most people approach negotiation, but my purpose in writing this book is to help you change that mindset and become a win-win negotiator.
Negotiation is a process. Many people tend to think of negotiation as an event—bargaining—where we sit at a table with someone, playing the negotiation game, trying to satisfy our own interests through various machinations or perhaps by engaging in enlightened collaborative problem solving. The truth is that the process of negotiation begins sooner than we think. It begins as soon as we recognize a need that we cannot satisfy on our own, and we set out to reach an agreement with someone who can help us satisfy that need. At this point, we may have not even identified a negotiating counterpart, we have merely identified a need. We begin the process of negotiation by clarifying our true interests and thinking about possible ways to satisfy them.
Negotiation is a game. Like the box of a board game says, “For two or more players.” Like other games, the negotiation game has some rules, though there are a lot more guidelines than firm rules. There are strategies and tactics you can learn, as well as counter-tactics for every tactic. Negotiation is a game of skill and chance. The more skill you have, the less you are at the mercy of chance. And like most games, there are winners and losers, but a good negotiation well played can leave everyone a winner.
Like most games, negotiation is meant to be fun. It may not feel like fun, because we feel pressure to get a good result and so we take it too seriously. But fun is in the mind of the player. With the right mindset, negotiation can be a lot of fun and very rewarding.
WHY DO WE NEGOTIATE?
We negotiate because we want something that we cannot get on our own. Someone else is in a position to give it to us or can help us get it. Alternatively, someone may be in a position to harm our interests, and we seek to dissuade them from doing so. In other words, we negotiate with a counterpart because they can help us or hurt us.
From this perspective, we are dependent on someone else. We feel weak, needy, and at their mercy. We see our counterpart as having power over us.
What we may not see is that our counterpart also wants something from us, or he wouldn’t be negotiating with us. We do not see how weak and powerless he feels as he deals with us, because he dare not show it. It’s important to remember that we are also in a position to affect his interests in a positive or negative way. He may need us as much as we need him.
Consequently, we find ourselves in a web of relationships and interdependencies. We all need things from others, and we turn to one another for help. Negotiation is the process by which we help each other get what we need.
THE NEGOTIATION PROCESS
I mentioned earlier that while negotiation is usually thought of as an event, it is in fact a process. This process begins the moment you perceive a want or need and set out to satisfy it. At that point, you may not even be thinking about negotiating. You may not realize you are negotiating until you are actually bargaining with someone over how much it will cost you to meet that need. By then it is too late—your counterpart knows you need him and he knows you are unprepared. You’ve lost.
Stage 1: Preparation
In The Art of War, the Chinese military strategist Sun Tzu wrote, “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” In other words, preparation is the key to victory in battle. The same can be said of negotiation.
So how do you prepare for a negotiation? Most people who are preparing to negotiate to buy something will have in mind a very low price that they would love to pay, the highest price they are willing to pay, and a figure in the middle of that range, representing an estimate of what they expect to end up paying. Sellers go through a similar exercise. It’s good to think about these expectations, but it is not enough.
You may imagine yourself a big shot negotiator and think you can just wing it, but understand this: real big shot negotiators do not wing it, they prepare. Here are some considerations to bear in mind as you prepare:
• Know thyself. What do you want? Not what you think you want, but what you really want. Surprisingly, many people are unsure of this. For example, you may think you want a raise in salary, and perhaps you do. But you might really want something else, such as recognition, to be treated fairly, to maintain or improve your standard of living, or to provide security for your future. A pay raise might do it, but there might be other ways of meeting your needs.
• Once you’ve determined what you want—or what you think you want—ask yourself why you want it. After asking yourself why a few times, you may realize you need something else after all. You cannot achieve a satisfactory outcome in a negotiation until you are clear about your real interests and goals, that is, what you want or need, and why you want or need it.
• You will often find that you have multiple interests. You need to prioritize these. For example, in negotiating a position with a new employer, you might be interested in many things other than salary, such as insurance plans and other benefits, a flexible schedule, work environment, work assignments, team assignments, and so on. Some of these will be more important to you than others. It is unlikely that you will get everything you want. Prioritize your wish list into those items you must have, those you are willing to bargain for, and those that would be nice but not necessary. Then focus on your priorities and avoid being distracted by minor issues.
• Assess what resources you have, what you bring to the table. What do you have that your counterpart might want? List everything, tangible (money, products, service) and intangible (brand, reputation, emotional needs). These assets or bargaining chips—anything of value that you might offer to exchange— are called currencies of exchange,
or simply currencies. How can you present these currencies to justify your demands?
• What strategies and tactics might you employ in the negotiation? Will you make the first offer, or wait for the other party to do so? What concessions are you willing to make, and when? What is your time frame? What is your walk-away point? What is your Plan B?
All of this is a lot to think about, but we’re not done yet! There are many other things you must consider:
• Know the other party. Learn what you can about her from LinkedIn and other online sources, as well as from people you know who may know her. What does she want from you? Is she clear about her interests? What are her priorities? Does she really want what she says she wants, or does she have a hidden agenda? What is her backup plan if she doesn’t reach an agreement with you? What intangible or emotional considerations might be motivating her?
• Anticipate your counterpart’s negotiating style. Will he be a tough adversary or a collaborating partner? What is his negotiating strategy, and what tactics might he employ?
• Formulate some options. Based on your knowledge of what you want, the currencies you have, and your understanding of your counterpart’s interests, begin putting together some options. An option is a package of currencies—a possible solution to your negotiating problem. Create some options that will satisfy your interests as well as your counterpart’s. Be prepared to present these options and discuss them.
• Assess your alternatives. If you cannot ultimately reach an agreement with your counterpart, how will you satisfy your interests? What is your Plan B? If you do not have a backup plan, you are not ready to negotiate.
• Know the environment. You and your counterpart will not negotiate in a vacuum. You will both be influenced by various factors. Some of these you can control, others you can only anticipate or respond to. The more you know about them, the better your prospects. Learn as much as you can about the subject of your negotiation, your industry and business environment, and your counterpart.
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