WIN-WIN

by David Goldwich

  A nibble is especially effective after the other party has invested substantial time, effort, or psychic energy in the negotiation. However, your counterpart will probably resent it. She may feel that you are greedy or you are not negotiating in good faith.

  Like all tactics, there is also a counter-tactic to the nibble. In fact, there are several. Let’s look at them here:

  • First, you might make it contingent. A nibble is a request for a concession, and we do not like to make unilateral concessions. Defend against the nibble by saying “I might be able to give you that, if you can give me this.”

  • You can defer to higher authority. “I’d love to give you those floor mats, but my manager would never agree to it.”

  • If you are in a business where you get the same kind of nibble all the time, put a price on it. “Let’s see, according to our standard price list, I can give you that set of new floor mats for only $189. Shall I add that to the purchase order?” People can say anything, but a written price list is the type of authority people don’t usually argue with.

  • You can appeal to fairness. “Come on now, I’ve already given you such a good deal. I really can’t give you any more.”

  • You can let the nibbler know you’re onto his game. “Hey, that was a pretty good nibble!” The nibble is designed to seem casual and not look like a tactic. The tactic doesn’t work when the veil is stripped off. Be very careful with this—you don’t want to cause the nibbler to lose face when exposing him. Unless you know the person well, consider using one of the other four defenses above.

  POST-SETTLEMENT SETTLEMENTS

  A post-settlement settlement (PSS) is a settlement that is agreed to after the parties reach their initial agreement. It is not a second, unrelated agreement, but an improved version of the first agreement. It allows you to leverage on your success and do even better.

  A post-settlement settlement sounds like an oxymoron. Why would you want to settle an agreement that has already been settled? The very idea sounds suspect, which may be why these devices are so rarely used, and are often viewed with suspicion when they are proposed. However, a PSS can be a great way to improve an already good deal.

  Your initial agreement may not be as good as it could have been. You didn’t know the other party that well, and may not have built enough trust to share information as fully as you could have. You may not have thought of all of the currencies or addressed all of the interests. You may have accepted a good deal too quickly for fear of losing it, rather than holding out for a better deal. After the dust settles, you think of ways you could have done better. Or maybe you can’t think of any particular improvements you would like to make, but you would like to explore further possibilities.

  A PSS can create additional value for both parties. The fact that you have reached an agreement shows that you can work with your counterpart. You have built up trust and goodwill, and you have helped one another become better off than you were before you reached your agreement. You both took risks in negotiating and those risks paid off. With this track record of success in joint problem solving, you are both confident that you can continue to help one another do even better.

  A PSS assumes that the initial agreement will remain in effect if the parties are unable to reach a better agreement. You can continue to negotiate with your initial agreement serving as your new Plan B. It is also your counterpart’s Plan B. Both of you must do better (or at least be no worse off) than your initial agreement or you will not agree to change it. You have nothing to lose by considering a PSS.

  For example, suppose you negotiate an employment package with a new employer. Your agreement states that you will begin your employment in 30 days, which allows you to give the requisite notice to your current employer. Your current employer unexpectedly agrees to waive that requirement and lets you go at the end of the week. The prospect of sitting at home without pay for the next three and a half weeks does not excite you, so you call your new employer and ask to re-examine the timing issue. If she would like you to begin immediately, you are both better off. Otherwise, you both stick to your original agreement.

  You might be reluctant to raise the idea of a PSS because of what your counterpart might think. He might think you are having second thoughts about the agreement and are trying to back out or extract more concessions from him. He might wonder why you think you could reach a better agreement now—were you not negotiating in good faith earlier? Did you learn something new? Did your situation change? These thoughts do not inspire confidence that your agreement will work out as expected.

  It is natural for someone not familiar with the PSS concept to have these doubts. You need to anticipate and overcome them. How you raise the matter is important. Emphasize that you are happy with your agreement and intend to honor it. Explain that there might be ways to improve it, and that you would like to explore some ways if they are mutually advantageous. Ask whether your counterpart has similar thoughts, or is at least open to the possibility of improving the agreement.

  The fact that the initial agreement—the new Plan B for both parties—guarantees that neither party will be worse off if there is no PSS should make you and your counterpart comfortable in exploring new and better possibilities.

  WHEN THINGS GET UGLY: LITIGATION, MEDIATION, AND ARBITRATION

  There will be times when you and your counterpart fail to reach an agreement where failure is not an option (for example, a management-labor negotiation), or you disagree about a provision in an agreement you made earlier. In times like these, one party may break off the negotiations with the words, “I’ll see you in court!”

  Aside from extreme measures such as war, strikes, and lockouts, there are three methods for resolving breakdowns in negotiations: litigation, mediation, and arbitration.

  Litigation

  Glamorized in movies and on TV, litigation is the most familiar means of resolving a dispute. The idea is simple: the parties go to court to see who has the better lawyer!

  The wheels of justice turn slowly, and it is very expensive to keep the machinery going. A judge decides the matter, which is subject to appeal and additional investments of time, energy, and, of course, money. In the end there is a winner and a loser, or possibly two losers after all the legal bills have been paid.

  In addition to the long time frame and high expense, litigation has other drawbacks. The outcome is uncertain and beyond the control of the parties—it is very risky. People in business like to reduce risk, not expose themselves to it. Litigation is a public process, and the decision is usually a matter of public record. Most people don’t like airing their dirty laundry in public. The decision is handed down by a judge (or possibly a jury). While a judge may be an expert on the law, he may not be that knowledgeable about the substance of the dispute— there may be people who are more qualified to settle the matter. Finally, the confrontational nature of the legal process usually destroys whatever relationship the parties may have enjoyed. Litigants often choose a tough lawyer to make the other side pay. Unfortunately, highly confrontational lawyers are not always the best medium for resolving disputes amicably.

  For these reasons, there is a growing trend in many jurisdictions to require parties to first attempt to resolve their dispute by other means. When the parties arrive in court for their pre-trial hearing, the judge will ask them if they have tried mediation. If they haven’t, he will say, “Go down the hall to room 2-C and spend an hour with the mediator.” As the impact of the uncertainty of the outcome and exorbitant expense of litigation sinks in, the parties usually find that they can agree to a settlement after all.

  Of course, you don’t have to wait for the judge to send you to mediation. You and your counterpart can agree to mediation or arbitration before either party decides to litigate. Going to court is a serious and expensive matter, with dire ramifications for your relationship. It should be used only as a last resort. In fact, the overwhelming majority of lawsuits are settled out of court.
r />   Mediation

  Mediation is a less formal process than litigation. The rules of evidence and procedure are greatly relaxed, and lawyers are optional. It is quick and inexpensive. There is no judge; rather, an impartial third party tries to facilitate an agreement between the disputing parties. The parties can choose to reach an agreement or not; no decision is imposed upon them. However, the mediator’s skill in negotiation and dispute resolution, combined with her people skills, can often help the parties to overcome their differences and reach a win-win solution.

  The beauty of mediation is its win-win philosophy. The parties are usually emotional and looking to beat their counterpart. (Remember, they may have been on their way to court a few minutes earlier.) Their attorneys are trained to be adversarial and are looking to justify their fees by giving their client a resounding victory, and perhaps destroying their opponent in the process. However, the mediator is trained to look for win-win solutions that others may have overlooked. She is often able to help the parties reach an amicable agreement, or at least an acceptable compromise. The provisions of the agreement are confidential. The parties may well leave the room on good terms, their relationship intact.

  Arbitration

  Like mediation, arbitration is a relatively quick, inexpensive, and informal alternative to litigation. However, there are a few important differences. The arbitrator, or the panel of arbitrators, is usually an expert in the field. For example, in a dispute between a general contractor and a subcontractor in a construction matter, the arbitrators may have experience in engineering, construction, or project management. They are better able to understand the intricacies of the dispute and can render a more informed decision than a judge.

  Unlike mediation, the arbitrator’s decision is usually binding. The parties agree to submit their case to an expert and abide by his decision, rather than take their chances with a judge. In fact, many contracts provide that disputes will be submitted for arbitration rather than litigation. There is usually no appeal from an arbitrator’s award. As with mediation, the decision is private and the parties’ relationship may well survive the proceedings.

  Of the three methods of dispute resolution, mediation is most useful in keeping with the spirit of a win-win negotiation. In fact, mediation is a form of negotiation, with the guidance of an expert. Avoid litigation and the specter of a lose-lose result if at all possible.

  * * * * * *

  There is much more to learn about becoming a win-win negotiator. No doubt you will learn some lessons from the mistakes you will make. Remember that doing so is infinitely better than not learning from your mistakes. Take heart in the knowledge that even world class negotiators make mistakes. Becoming a win-win negotiator is a life-long journey, but it is a rewarding one.

  POSTSCRIPT:

  THE FUTURE OF NEGOTIATION

  Negotiation has been around since the dawn of mankind. People have always cooperated and competed, and negotiation is part of both. For much of the history of business, competitive win-lose negotiating was the norm. You have something I want, but I want to get as much as I can for as little as possible. I’ll use tactics and dirty tricks to do so, and you’ll try to protect your interests with counter-tactics and more dirty tricks. People haven’t changed much in all these thousands of years, and neither has the practice of negotiation.

  The biggest change in the way negotiation is practiced has been the principled or win-win approach advocated by Professor Roger Fisher and his colleagues. The emphasis on joint problem solving, preparation, expanding the pie, differentiating positions and interests, empathy, and relationships was exactly what we needed in the last two decades of the 20th century. The business environment was changing dramatically:

  • Information technology and the Internet made information more widely available, leveling the playing field and creating legions of savvy buyers in both the consumer and commercial realms.

  • Technological complexity and specialization changed the way we work, with more democratic corporate structures and collaboration needed to integrate knowledge, skill, and expertise.

  • Companies still competed but were more likely to cooperate as well, with a proliferation of joint ventures, strategic alliances, partnerships, and co-branding arrangements requiring unprecedented levels of collaboration.

  None of these forces will go away. In fact, information accessibility, complexity and specialization, and the centrality of relationships will continue to have increasing impact on the way we live and do business. There are also newer forces coming into the mix as well:

  • The generations that are now coming of age are not willing to play by the same rules as the boomers and their predecessors. They measure success differently. Money often takes a back seat to other currencies, such as purpose and causes bigger than themselves, for example, the environment, meaningful experiences, and making a difference.

  • The circle of stakeholders will continue to expand. Management, labor, shareholders, vendors, and customers are being joined by voices speaking on behalf of residents, whales, and trees. Those voices will become louder and more diverse. Environmental, social, and governance measures are becoming more important relative to the bottom line.

  • Social media makes it very risky for companies, governments, and other actors to engage in sharp practices that previously might have had little consequence. And everyone will be able to find their tribe.

  • The gig economy means a lot of workers who never thought about negotiating now have to think about it and practice it in their role as CEO—Chief Everything Officer.

  My friend Avi told me a beautiful story. He had hired Sandeep, a solopreneur web designer who was just starting out, to build his website. They agreed on a price and the scope of work and Sandeep set out to do the job. After Avi saw the finished website, he called Sandeep and said, “I don’t think I can pay you the agreed price for your work.”

  “What do you mean you can’t pay?” Sandeep replied. “I did everything you asked for. We had a deal …”

  “I understand we had a deal, but your work has exceeded my expectations. You deserve more than what we agreed. I’d like to pay you an additional 20%.”

  “What? Wow! Are you serious? I really appreciate that, but you don’t have to pay me anything extra.”

  “Yes, I do. You deserve it. I want to be fair with you.”

  The amount in question was not a large sum, but Sandeep was delighted. Not only did he get a pleasant surprise and a bonus, he also felt valued. When Avi’s website was hacked, Sandeep fixed it without charge.

  Sandeep’s business has grown, and he has raised his fees. Avi has hired him to build a couple more websites for him, and has also referred several new customers to Sandeep. But Sandeep charges Avi less than his other customers, and he still gives Avi his personal attention. Their business relationship is straightforward and characterized by trust and goodwill. Both give their best and know that they are being fairly treated by each other. And they have become good friends.

  Tactics, secrecy, positional bargaining, and the competitive mindset will never go away, but they will become less common. Relationships, interest-based problem solving, and the win-win mindset will continue to grow in importance. The win-win negotiator is just hitting his stride.

  THE WIN-WIN NEGOTIATOR’S CHECKLIST

  1. Distinguish Interests vs Positions

  To uncover your true interests, ask yourself why it is important to you.

  What are your real interests? Prioritize them.

  What are your counterpart’s interests?

  Are there any other stakeholders whose interests should be considered?

  2. Identify Currencies—anything of value

  What do you have that your counterpart values?

  What do they have that you value?

  What currencies can you leverage to create value?

  Consider differences in perception, timing, risk tolerance, intangibles, emotional needs, etc.

>   3. Generate Options—packages of currencies, possible solutions

  What options would best satisfy my interests? Their interests?

  Look for creative solutions.

  How can I create more options using a variety of currencies (including intangibles)?

  4. Develop a Plan B

  List all the alternatives you can think of, and the pros and cons of each.

  Which alternative is most favorable? Is it realistic?

  Can you improve it?

  What is your best estimate of your counterpart’s Plan B?

  How can you minimize it?

  5. Rationale—an external, objective standard for evaluating possible outcomes

  What possible rationales can you come up with? Fairness is important.

  Prioritize standards—which are most advantageous to you?

  To your counterpart?

  How can you help your counterpart sell it to his boss/stakeholders?

  6. Communication

  Build rapport, empathize, be likable.

  Ask lots of questions.

  Listen carefully.

  Consider cultural issues.

  7. Relationship

  Separate the people from the problem.

  Seek to understand your counterpart, see their point of view.

  Keep emotions in check.

  8. Implementation—promises and agreements about what each party will do

  What do you hope to accomplish?

  What will the final agreement look like?