When parties to a negotiation can’t seem to find common ground, it sometimes seems as if the only solution is “winner take all.”
Consider the failed campaign by the backers of the Cape Wind Energy Project to build the first offshore wind farm in the United States off the coast of Massachusetts in Nantucket Sound. Led by Jim Gordon of Energy Management Inc., Cape Wind Associates sought approval for the wind farm from dozens of local, state, and federal agencies and organizations.
The wind farm became controversial, though it would have provided a local source of clean energy for the region, and one poll found that only 14% of Massachusetts residents opposed it. But a vocal group of wealthy area residents complained it would ruin scenic views and would create new environmental problems. Cape Wind received all its needed permits in April 2011 yet still collapsed.
In his book Good for You, Great for Me: Finding the Trading Zone and Winning at Win-Win Negotiation, Massachusetts Institute of Technology professor Lawrence Susskind explains what went wrong—and how you can do better. Specifically, you don’t have to choose between claiming value or creating value in negotiation. Rather, by using several well-tested negotiation strategies, four discussed here, Susskind explains how you can help the other side benefit from a deal while also claiming substantially more value for yourself.
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1. Lead them into the trading zone.
Susskind describes the “trading zone” as that point in a negotiation when parties let down their guard and begin to search for a mutually beneficial agreement. Unfortunately, it can be hard to get there, especially when your aims threaten the status quo.
At such times, organizations often believe the key to win-win negotiation is to enlighten their counterparts about their point of view. Both proponents and opponents of Cape Wind came up with their own evidence to rebut the other side’s claims, for instance.
But one-sided information about a project’s merits comes across as arrogant and oblivious to the other party’s concerns, notes Susskind. A joint fact-finding process provides a better route to value creation and claiming. It begins by engaging negotiators in a collaborative exploration of a project’s feasibility and merits early on, with the help of outside experts, before people take sides. “By agreeing on the information that needs to be gathered, analyzed, and interpreted, the parties can lay the foundation for mutually beneficial negotiation,” writes Susskind.
2. Create more value through trades.
In contrast to how the debate over offshore wind played out in Massachusetts, notes Susskind, the state of Maine took a different tack. It reviewed all potential offshore wind sites before projects were proposed and publicly noted which seemed most promising based on technical, economic, and aesthetic criteria. Perhaps as a result, wind farm proposals in Maine faced far less public opposition than Cape Wind.
Such a process lays a strong foundation for win-win negotiation. First, prepare to present multiple proposals—all of which you value highly—at the same time. Your counterpart’s reactions to these proposals will help you better gauge their preferences. Second, ask lots of questions to directly assess their interests and reveal your own. Third, make hypothetical “What if…” proposals to determine if a trade creates value for both sides, such as “If I offered you a 5% discount on our new product, would that be enough of an incentive for you to switch from our existing product?”
3. Try contingent agreements.
Even parties aiming for win-win negotiation often reach impasse because they have different beliefs about the likelihood of future events. You might be convinced that your firm will deliver a project on time and under budget, for example, but the client may view your proposal as unrealistic.
In such situations, a contingent contract—negotiated “if, then” promises aimed at reducing risk about future uncertainty—allows parties to agree to disagree while moving forward. Contingent commitments often create incentives for compliance or penalties for noncompliance, writes Susskind. You might propose paying specified penalties for turning in your project late or agree to significantly lower your rates if you go over budget, for example.
4. Write Their Victory Speech
You may think you’re striving for a win-win negotiation with one other party, but think again, advises Susskind. Most two-party negotiations are actually multiparty negotiations in disguise because of the “back tables” involved—both your constituents and theirs. These constituents can be a powerful presence, as they must sign off on whatever deal is reached.
Rather than viewing your negotiating partner as an adversary, start looking at them as an important emissary in selling the deal to outsiders. That means supplying them with the arguments they will need to sell an agreement that is best for you. In other words, write your counterpart’s victory speech for them.
The backers of the Cape Wind project failed to write a victory speech that would have allowed their wealthy opponents to demonstrate how the original plan for the wind farm had been modified to ensure lower-priced energy for area residents, avoiding the need for further investments in fossil fuel–powered generating plants and increasing tourism profits.
What other advice do you have for those striving for win-win negotiation in a contentious climate?
Claim your FREE copy: Win-Win or Hardball
Discover how to handle complicated, high-level business negotiations in this free report, Win-Win or Hardball: Learn Top Strategies from Sports Contract Negotiations, from Harvard Law School.
