Some Thoughts on Negotiation (and Fiscal Cliffs)

I learned a lot about negotiation at Harvard Business School. I took classes from Max Bazerman (for my money, the best in the business) and John S. Hammond (no slouch either, one single insight he gave me has paid dividends for decades).

We did a lot of work on taking some of the more emotional, lizard-brain elements out of negotiating. We did a lot of work on expanding the pie (creating of new value) before any divvying up (claiming of value). The more you learn about expanding the pie, the more you find that there is always a better deal to be had for both sides.

I have yet to encounter a deal where more value can’t be created. But in order for this approach to work, both sides need to be willing to try to create more value first. Sometimes, one or both sides let a scarcity mindset and fear overrule the better decision of first creating value.

Here’s what I notice, especially as this pertains to politics and very often sales.

In order to be an effective negotiator, you must allow your partner to capture and claim some of the value that is being created and negotiated for. If you are the only one that can win, it’s very difficult to come to a deal. That’s because no one can accept a win-lose deal. You can’t. They can’t.

The more you try ensure that your partner in a negotiation can capture some of the value being created, the easier you make it for them to say, “yes,” because they have their win. If they can claim that they ended up with a good deal to their stakeholders, then you make it easier still.

When grown ups sit down to negotiate, this is how both sides operate. When children sit down to negotiate, both sides are too busy trying to capture and claim value to ever come to an agreement. They quickly get to lose-win or win-lose, depending on which side of the table you’re sitting on.

If there is no way the person with whom you are negotiating is allowed to walk away with a win, then you are a poor negotiator.

Questions

Do your negotiations improve by you or your partner behaving as adversaries?

How might your results be improved if you approached every negotiation as if it were a problem solving exercise instead of an adversarial interaction?

How do you expand the pie in the deals that you create?

Have you ever had to negotiate with a client that was only interested in capturing and claiming value? How’d you deal with that client?