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Friday, April 6, 2012

Win Twice Maybe Even Thrice

Negotiating can have positive and negative aspects.  Discussions often focus on what each party gets and whether they believe it is enough.  When parties are too far apart, the discussions stall and people believe they are so disadvantaged that they want to walk away, or worse, they decide to take negative actions that harm both parties.  It is extremely important to read the tealeaves and head this type of event off before it goes too far. 

The ability to recognize whether discussions are moving toward an impasse is not too easy.  Sometimes you will have to look several steps ahead much like playing chess.  Chess is a game that requires considering multiple moves at level one followed by the potential for subsequent moves including possible opponent countermoves.  The great players can see several moves in advance as well as predict the countermoves of the opponents.  The same is true for military actions.  Great generals are always assessing the landscape, strengths, moves, countermoves and plan actions in an effort to win; just like in chess.  It is your ability to consider all the options and countermoves in a negotiation that can help you see a stall coming.

One of the best ways to increase the benefit and prevent a stall is seeking a Win-Win.  This concept described in the books on negotiations.  A Win-Win is exactly as it sounds; both parties come out of the negotiations feeling that they won something important to them.  The parties feel good about what the accomplishment and believe they can work together in the future. 

Getting to a Win-Win sometimes works by seeing the issues from both prospective, yours and the other sides.  Adjusting the parameters of a deal to address the key issues of each party and describing how the proposal works for you and for them.  Modification of deal parameters with mutual input seeking this type of resolution often makes for a lasting arrangement with minimal conflict later.

One of the ways to manage expectations of financial benefit is to seek ways to increase the size of the benefit such that what each party receives is larger. This means working on a way to increase the total value of a fixed percentage; i.e. would you rather have 10% of $1M or 10% of $1B.  Seeking a way to improve the payout can really help turn the discussion to something that leaves both parties excited.

The one factor that is always fun and leaves everyone pleased is winning 2 times, or 3 times.  This means that you complete a deal to find a second level expected or unexpected benefit. Take for example a case of negotiating a sale of a company at a fixed price.  Both parties are happy with the deal but discover a third buyer may be approached which increases the payout to the original two parties.  The option may have never been considered, but as part of the discussion, it circumstances took it to a reality.  Another case it two companies completing a deal sending out a press release.  Enthusiasm from the release led investors or customers to bid up the company valuations or dramatically increase sales. 

Seeking a Win-Win is a great way to go if you can move the discussions that way.  Actively seek the “Win Twice or Even Thrice” opportunities will just make you that much happier!