How do you know whether you’ve won a negotiation?
When we ask our clients what a successful negotiation looks like, they frequently refer to the goal of achieving a ‘win-win’ outcome. But, in reality, we still see a significant number of people approaching negotiation with a ‘win-lose’ mentality.
Where does this pressure to win come from? And if winning is not the answer, how can we evaluate the success of our negotiations?
It wasn’t the first time this issue had come up in a negotiation workshop.
This time, it involved two participants negotiating a property-related dispute. It was the first activity of the two-day workshop, and I was keen to observe how different people approached it.
Quite early in the negotiation, one participant managed to extract a fairly significant promise from his counterpart – a promise that met one of his key interests in the negotiation. He immediately followed this up by saying: “Well, you didn’t really need that [subject of promise], so it’s not really worth much. You need to give me something you actually care about.”
Not surprisingly, the negotiation went downhill from there. In being fixated on extracting more value from his counterpart, the first participant failed to see the value of what was in front of him. On the other side of the negotiation, having given a substantial amount of value away without getting anything in return, his counterpart was reluctant to make any further concessions. The result: stalemate.
In another workshop, a pair returned from the same negotiation, one of them looking particularly glum. When she described her outcome, I was confused – they’d achieved quite a good result. So I probed a little about why she seemed disappointed. Her reply: “I don’t think I did very well. They weren’t hurting enough.”
In each of these examples, there seemed to be an underlying assumption that a successful negotiation involved not just getting something of value to them, but taking something of value to the other person.
So why does this happen?
The drive to win: nature and nurture
From an evolutionary perspective, winning is a matter of survival. It is a matter of ‘eat or be eaten’.
There are also engrained cultural expectations about what it means to be successful in a negotiation, perhaps brought about by watching too many episodes of L.A. Law – or, for the modern generation, Suits.
(And, of course, there is the occasional case of a genuine personality disorder that may drive a person to win at all costs.)
And yet, like so many things in life, our biological hardwiring and cultural conditioning do not always serve us well.
As the authors of Getting to Yes* wrote:
In most instances to ask a negotiator “Who’s winning?” is as inappropriate as to ask who’s winning a marriage. If you ask that question about your marriage, you have already lost the more important negotiation – the one about what kind of game to play, about the way you deal with each other and your shared and differing interests.
At CMA, our work involves bringing assumptions (in this case, unconscious strategies) to the surface in order to provoke a discussion about whether they are helpful – or whether a different approach might be more effective.
To do this, we need to step back and consider what we’re trying to achieve.
Some more constructive goals
So if negotiation isn’t about taking as much as you can get, what is it about?
The Harvard Negotiation Project’s development of a principled negotiation framework (the ‘7 Elements of Negotiation’) leads to seven goals that can be used to measure your success in a negotiation. These goals are based on a collaborative view of negotiation and are far more likely to create value for both parties:
Goal #1: Was the outcome better for the parties than walking away? (the Alternatives element)
Why this matters: The ultimate test is whether the negotiated agreement is better than any other solution that was available outside the negotiation (known as the BATNA, for ‘Best Alternative to a Negotiated Agreement’). For example, if I sell my car to Buyer A for $15,000 when Buyer B would have paid me $16,000 (my BATNA), then I didn’t get the best outcome (all other things being equal) – even if I managed to squeeze an additional $2,000 from Buyer A.
The key here is to make sure that all other things are equal. Sometimes, we focus so much on one parameter of success (e.g. price) that we overlook other factors that might be important to us.
Goal #2: Did both parties meet their interests? (the Interests element)
Why this matters: Presumably we want to meet our own interests in a negotiation. But did we meet all of our key interests? Or did we forsake some for others?
A more challenging question: Were your counterpart’s interests met as fully as they could be, without significant cost to you? There is considerable value in meeting another person’s interests, and not just because it helps you to reach agreement.
Goal #3: Did the parties create value? (the Options element)
Why this matters: A significant focus of CMA’s workshops is on creating value, as opposed to merely compromising. Anyone can ‘split the difference’; it takes skill and ingenuity to look for creative ways to resolve our differences. Too often, we ‘leave value on the table’ – we waste the resources that are available to us – simply because we are too hasty or too task-oriented to explore beyond this.
Thankfully, there is a process that you can use to systematically create value, even in circumstances that you might currently think of as quite transactional.
Goal #4: Was the outcome fair and reasonable? (the Standards element)
Why this matters: While the need to win might be hardwired into us, so is the need for fairness. A thoughtful exploration of the benchmarks that establish what a reasonable person might agree to in similar circumstances can help the parties to feel secure about their commitment and avoid the feeling of being ‘taken’.
Goal #5: Did the parties reach clear and operational commitments? (the Commitment element)
Why this matters: It’s one thing to reach an agreement. It’s quite another for both parties to know and understand exactly what they’ve agreed to and how they’re going to follow through on it.
Goal #6: Did the parties build a relationship that deals well with difference? (the Relationship element)
Why this matters: Aside from any altruistic motivation to build a relationship, good relationships make sense because they help the parties to achieve many of the other goals in this list. For example, parties with a good relationship may be more generous and flexible when coming up with options, enabling the parties to create more value overall. They may also be more willing to work through implementation issues without resorting to formal dispute-resolution mechanisms.
Goal #7: In communicating with each other, did the parties’ intention match their impact? (the Communication element)
Why this matters: The ability to communicate clearly and efficiently is essential to avoid misunderstandings that can damage the relationship, and/or lead to the breakdown of commitments in the future.
As you can see, there is more to negotiation than simply ‘winning’. The Harvard model gives us a comprehensive approach to manage what can be a complex interaction.
Finally, to quote the American industrialist, Jean Paul Getty:
My father said: ”You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.”
* Getting to Yes: Negotiating an agreement without giving in by Roger Fisher, William Ury and Bruce Patton