At one point or another, most of us have found ourselves in the midst of a chaotic negotiation process—one that takes much longer than expected, creates a great deal of stress, and squanders resources.

Now imagine having to face multiple such negotiations annually. For many years, that’s the situation National Football League (NFL) teams were in as they struggled to negotiate rookie contracts and get the players on the field before the start of each season.

Under its existing negotiation process, the NFL allotted teams a set amount of salary-cap room to be divided among their rookies. Rookies’ agents typically delayed negotiating with teams, reluctant to be among the first to reach a deal, writes Andrew Brandt, a former players’ negotiation agent and Green Bay Packers vice president, for Sports Illustrated.

While working for the Packers, Brandt was frustrated that many agents seemed primarily motivated “to not look bad rather than doing what was best for the client.” Negotiations would stretch into the summer training season and sometimes even prevent players from taking the field during early games.

In addition, the agents for top rookies came up with creative ways to negotiate around the salary cap, including negotiating advances and bonuses. Moreover, teams ended up showering riches on their first-round rookie picks, leaving other rookies with considerably less. “Top rookies walloped NFL teams coming and going,” according to Brandt. Some of these highly compensated young players failed to live up to expectations, leading to disappointment all around.

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Setting a New Strategy

As they prepared to negotiate their 2011 collective-bargaining agreement with the players, NFL team owners were determined to overhaul the negotiation process for signing rookies. This wasn’t difficult, given that veteran players were tired of seeing rookies earn more than proven players and that rookies had “no voice” in the negotiation process, according to Brandt.

The owners and the NFL Players Association (NFLPA) reached a new negotiation process modeled on the one used by the National Basketball Association. Under the new negotiation process, each rookie draft pick receives a salary within a predetermined range and a four-year contract (with first-round picks open to being optioned for a fifth year). Most salaries are set at a nonguaranteed minimum and include a predetermined signing bonus.

From a Distraction to an Afterthought

Four years later, NFL teams were pleased with how the new negotiation process for rookie contracts were playing out. In 2014, all 256 rookie draft picks were signed by June 17, about six weeks before the start of any of the teams’ training camps, according to the Associated Press (AP). Negotiations that used to take months typically took just a few days.

The overhauled negotiation process resulted in lower earnings for top rookies but reduced their risk of being perceived as overpaid if they failed to meet expectations. And instead of distracting them from their training, contract negotiations have “almost become an afterthought for players,” according to the AP. With the rookie showcase, draft process, and contract “finally out of the way, now it’s just football,” second-round Vikings draft pick Eric Kendricks told the AP. “And I couldn’t ask for more.”

In addition, with rookies receiving nonnegotiable salary offers, some players negotiated better deals with their agents. By the 2023 draft, competition for clients had led some agents to cut their commissions to as low as 1% for deals with rookies, according to Front Office Sports. Agencies also routinely pay rookies up to $70,000 for training and living costs after they declare for the draft. “Some firms treat the draft as a loss leader to accumulate more talent,” one agent told Front Office Sports.

Although negotiating a rookie contract “has lost some of its luster” for agents, writes agent Marc Lillibridge on the website Bleacher Report, the new system helps well-performing rookies “see the big dollars in their second contract. That is where the fun negotiations for an agent have gone.” And the commissions, obviously, as well.

Overhauling a Negotiation Process

If your organization’s negotiations give you headaches, think about whether a better negotiation process is within reach. Then set about becoming part of the solution. In particular, you might consider the following questions:

• What inefficiencies need to be resolved? Look beyond price negotiations to include factors such as timing, the number of parties, the format of negotiations, and the issues on the table.
• Do parties face incentives to drag out the negotiations or otherwise make them inefficient? How might such incentives be eliminated?
• Who should be involved in negotiating the new process? The NFL didn’t include rookies in its negotiations. However, it is often wise to give all key parties a role when negotiating a new negotiation process, lest they rebel when the new system is in place.
• Should particular deal terms be made nonnegotiable? For example, should salaries be preset or limited to a narrow range? Placing certain issues off-limits to negotiation might streamline the process but, again, could backfire if parties feel overly constrained.

What kinds of changes have you made, or would you like to make, to your organization’s negotiation process?

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In the internet era, and now with the rise of artificial intelligence (AI), the music industry has been forced to constantly adapt. Compact discs gave way to digital downloads and streaming, and new business models were born. More recently, audio-streaming services have needed to adjust to the demands of artists and record labels. For streamer Spotify, these demands have brought about both disappointing impasse and win-win negotiation over the years.

When Taylor Swift Took On Spotify

Spotify launched in 2006 with a two-tier system: Some of its users pay a subscription fee to listen to streamed music (and other audio content) free of advertising; the rest listen to the content (and ads) for free. Spotify’s subscription tier pays higher royalty rates to artists than its free tier.

As music streaming caught on, Taylor Swift and other artists complained that the royalty rates that streamers such as Spotify paid were too low. In the lead-up to the October 2014 release of her first pop album, 1989, Swift and her then-record label, Big Machine, told Spotify they wanted only the company’s paid subscribers, and not those listening for free, to have access to her new songs. As Swift expressed in a July 2014 Wall Street Journal op-ed, “It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is.”

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Spotify denied Swift’s request to keep her music off its free tier. In response, Big Machine asked to have her entire catalog taken off the site. Swift also took her music off of Pandora and other streaming sites. The decision was a blow to Spotify and other streamers, whose success depends heavily on their ability to provide users with new music. Swift left her music on Apple’s streaming service after the company agreed to pay artists royalties during its three-month trial period.

Notably, Swift, as a top-selling artist, had a unique ability to walk away from Spotify. By contrast, most musicians had to “follow fans where they are, and that’s on streaming services,” writes Victor Luckerson for Time magazine.

Eventually, without changing its business model, Spotify raised its royalty rates and lured back Swift in June 2017. The two have had a win-win relationship ever since: Swift’s album The Tortured Poets Department, launched on April 19, 2024, broke a Spotify record with over 300 million streams in a single day.

A Time to Change

By 2022, streaming accounted for 84% of recorded music revenues in the United States. But, following several boom years, growth slowed in streaming in the early 2000s, according to Bloomberg. At the same time, record labels became increasingly unhappy with the model streamers use to divide up royalty payments. Most of them pool together ad and subscription revenue, then pay artists based on their share of the total streams, according to Music Business Worldwide (MBW).

“That may sound fair at first glance,” according to MBW, “but as the music industry is currently discovering, the pro-rata model can be ‘gamed’ in favor of small (and sometimes unscrupulous) actors who siphon off the potential earnings of legitimate artists.” Making matters worse for record labels, content providers have diluted the pool of money to be divided by uploading huge numbers of cheaply produced tracks, such as white noise and AI-generated content, to streaming services.

Universal Music chief Lucian Grainge and other music studio heads pushed to negotiate a new royalty system with Spotify, SoundCloud, and other streamers.

Toward Win-Win Negotiation

The situation could have led to another standoff, but Spotify pursued a win-win negotiation model rather than exercising its best alternative to a negotiated agreement, or BATNA, and standing firm. In October 2023, following conversations with leaders at major record labels, Spotify adopted a new royalty system that implemented several major changes.

First, only tracks that generate 1,000 or more streams in a year will qualify for royalty payments. This disqualifies two-thirds of tracks on Spotify, according to Variety. (One thousand streams adds up to only about $3 in revenues for artists on Spotify, so the loss is not significant for individual artists. Rather, the change targets distributors who upload large numbers of fraudulent and cheaply produced tracks.)

Second, under the new model, Spotify has begun to impose financial penalties on distributors and labels that upload tracks with fraudulent activity on them. Third, nonmusic tracks, such as bird sounds and white noise, must be at least two minutes long to generate royalties on Spotify.

The new model appeared to be a win-win negotiation (or even a win-win-win) for Spotify, record labels, and recording artists. Record companies praised the changes, which Spotify predicted would generate an additional $1 billion in royalties for artists over five years. Spotify itself benefits from improved relationships with artists and labels. For the major parties, the win-win model was a far more satisfactory outcome than the standoff that drove Swift and Spotify apart years ago—and a testament to the value of pursuing win-win negotiation.

What examples of win-win negotiation in the news have you observed lately?

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Sooner or later, almost all of us will find ourselves trying to cope with how to manage conflict at work. At the office, we may struggle to work through high-pressure situations with people with whom we have little in common. We need a special set of strategies to calm tempers, restore order, and meet each side’s interests.

The following three strategies will help you learn how to manage conflict at work.

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1. Put formal systems in place.

Conflict in the workplace often arises when resentment, anger, and other negative emotions are left to fester. An accidental slight can lead into a full-blown dispute if the parties involved fail to address it explicitly. As a consequence, workplace conflict is often managed one dispute at a time, an approach that is inefficient and costly.

In recent years, organizations seeking to determine how to manage conflict at work increasingly have recognized the benefits of putting in place a formalized system for addressing conflict in the workplace. In an article in the Negotiation Briefings newsletter, Harvard Law School professors Frank E. A. Sander and Robert C. Bordone recommend that organizations engage in dispute system design—the process of diagnosing, designing, implementing, and evaluating an effective method of resolving conflicts in an organization. Those with basic experience with dispute-resolution processes such as negotiation, mediation, and arbitration, should be able to help their organization establish a dispute-resolution process.

One of the main goals of dispute system design, or DSD, should be to support low-cost, less invasive approaches to managing workplace conflict before moving on to more costly, riskier approaches. For example, an organization might encourage or require employees in conflict to engage in mediation before moving on to an arbitration hearing. In addition, write Sander and Bordone, employees should be able to tap into the dispute-resolution process at different points throughout the organization—for example, through their supervisor, an HR staff member, or some other leader—lest they avoid the system due to distrust of one person in particular.

Setting up a dispute system can be a complex process, but it will almost inevitably promote a more efficient means of managing workplace conflict than a case-by-case approach.

2. Promote better feedback.

Workplace conflict often arises because co-workers have difficulty giving one another effective feedback, or any feedback at all. When we fail to let people know how they can improve, our frustration grows as their mistakes mount. Similarly, if we give unconstructive feedback—feedback that is vague, very negative, or too personal—we can create destructive workplace conflict.

We need to learn to give more effective feedback and teach others in our organization to deliver meaningful and useful feedback as well. People who give good feedback ask questions, stay positive, give details, and describe how the situation makes them feel, writes Program on Negotiation managing director Susan Hackley in Negotiation Briefings. Leaders also need to make it easy for people to raise concerns.

In their 2014 book Thanks for the Feedback: The Science and Art of Receiving Feedback Well, Douglas Stone and Sheila Heen offer advice on accepting feedback in a constructive manner—even when the feedback isn’t delivered constructively. We all need to learn to identify personal triggers that cause us to take perceived criticism personally, for example.

3. Focus on the problem, not the people.

When deciding how to manage conflict at work, try to focus on the problem rather than the personalities involved, recommends Hackley. Because conflict tends to promote competition and antagonism, you should strive to frame the situation in a positive light. For example, focus on the potential benefits to the organization if you are able to resolve the workplace conflict rather than on the potential negatives if you have difficulty doing so.

In addition, when dealing with conflict at work, remember that people tend to view conflicts quite differently, based on their individual perspective. Our perceptions of what went wrong tend to be self-serving. With each person believing he or she is “right” and the other person is “wrong,” it’s no wonder conflicts often fester in organizations.

For this reason, it’s crucial to start off your workplace conflict resolution efforts by taking a joint problem-solving approach. Ask open-ended questions and test your assumptions, advises Hackley. Make sure that each party has ample time to express his or her views without interruption.

When figuring out how to manage conflict at work, we need to remember the importance of exploring the deeper interests underlying the other party’s positions. When you listen closely, you will go a long way toward building trust and resolving difficult situations.

Does your organization have a formal process for resolving workplace disputes?

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When an important negotiation is looming, “winging it” is never the answer. The best negotiators engage in thorough negotiation preparation. That means taking plenty of time to analyze what you want, your bargaining position, and the other side’s likely wants and alternatives.

In her book The Mind and Heart of the Negotiator, Northwestern University professor Leigh Thompson recommends that negotiators engage in a careful self-assessment prior to negotiating. In particular, she recommends asking two main questions as part of your negotiation preparation:

1. What do I want?
2. What is my alternative to reaching agreement?

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What Do I Want?

Thompson’s first question requires us to set an ambitious but realistic target. When setting a target, there are three traps to watch out for, Thompson notes.

First, avoid being an under-aspiring negotiator who sets a target that’s too low. If you do, you may end up feeling like the victim of the “winner’s curse,” which describes the disappointment we feel when the other party immediately accepts our first offer in a negotiation. The fact that the other party is eager to accept your first offer suggests that you aimed too low and failed to engage in adequate negotiation preparation.

On the other hand, you don’t want to be an over-aspiring negotiator, either. When you aim too high and refuse to make significant concessions, you will be left without a deal.

A third problem arises when you engage in so little negotiation preparation that you don’t know what you want. In this case, negotiators often view the other party’s good-faith proposals with suspicion or disappointment.

What Is My Alternative to Reaching Agreement?

To improve your odds of meeting a realistic but ambitious target, you will need to determine your best alternative to a negotiated agreement, or BATNA, as recommended by Roger Fisher, William Ury, and Bruce Patton in Getting to Yes: Negotiating Agreement Without Giving In.

Determining your BATNA will help you know when it’s time to walk away and pursue your best alternative. In their book Negotiation Genius, Harvard Business School professors Deepak Malhotra and Max H. Bazerman note that BATNA assessment involves the following three steps:

1. Identify all of the plausible alternatives you might pursue if you can’t reach a deal with the current party.
2. Estimate the value associated with each alternative.
3. Select the best alternative, which is your BATNA.

For a job seeker who is engaged in negotiation preparation for a particular hiring negotiation, the first step would involve identifying other possible job opportunities as well as other alternatives, such as staying at her current job or applying to graduate school. The second step would involve assessing the monetary and non-monetary value of each alternative, including likely salary, benefits, responsibilities, engagement with one’s work, quality of life, and so on. This type of analysis should lead the job seeker to identify the alternative that she prefers.

Calculate Your Reservation Value

Once your negotiation preparation has helped you identify your BATNA, you are in a position to calculate your reservation value, or reservation price, which is your walk-away point in the upcoming negotiation. In a price negotiation, this might be a particular number. In an integrative negotiation where multiple issues are at stake, your reservation value might be expressed as a package, such as the lowest salary, benefits, and responsibilities you’d accept to take a certain job.

Your knowledge of your reservation value will help you avoid two mistakes: (1) accepting a deal that’s worse than your BATNA or (2) rejecting a deal that’s better than your BATNA.

Assess Your Counterpart’s BATNA

When engaging in negotiation preparation, it’s not sufficient to only look at your own needs and wants. To improve the odds of a mutually beneficial deal, you also need to figure out how much the other party may be willing to give. To do so, you need to analyze their BATNA.

Ask yourself, “What will they do if our negotiation ends in impasse?” This will lead you to contemplate the other side’s reservation value. For instance, a job seeker might conclude that the hiring organization is likely to have other qualified candidates waiting to take the job for a relatively low salary. If so, the job seeker might recognize that he won’t be able to push the hiring manager very far in a salary negotiation. Conversely, a job seeker might be aware that she is one of the only appealing candidates for the open position—in which case, she may be able to drive a tough bargain.

Negotiation preparation needs to be conducted with a clear-eyed view of the playing field. The more rational and methodical your negotiation preparation process is, the better your negotiation results are likely to be.

What other steps do you recommend when engaging in negotiation preparation?

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Principled negotiation allows you to leverage the principles of your opponent to win a negotiation. Parties can often reach a better agreement through integrative negotiation—that is, by identifying interests where they have different preferences and making tradeoffs among them. If you care more about what movie you see tonight, but your friend cares more about where you have dinner, for example, you can each get your preference on the issue you value more, and both of you should be happy with your evening.

But what if you have strong opposing opinions on an issue? Let’s say you’re anxious to see a particular film, but your friend heard from a colleague that it’s not very good. How might you resolve this dilemma? You might simply argue until one party backs down or walks away—that is, you might engage in positional negotiation.

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Better yet, you might agree to get a better sampling of opinions by visiting a movie review site, like Rotten Tomatoes, to find out how popular the film is with critics and the public, or look for a review of the film in a publication you both trust. Seeking out evidence that would give you both more information on which to base your decision can be a smart move. If you both trust your chosen information source, you will be more likely to agree on how to proceed.

Our relatively trivial movie example makes a broader point: When negotiators disagree about an issue, consulting objective criteria can be a lot more productive than adversarial bargaining. In their seminal book on negotiation, Getting to Yes: Negotiating Agreement Without Giving In, Roger Fisher, William, Ury, and Bruce Patton refer to this approach as principled negotiation because it involves drawing on principles rather than making opinion-based arguments.

“The more you bring standards of fairness, efficiency, or scientific merit to bear on you particular problem, the more likely you are to produce a final package that is wise and fair,” write the authors of Getting to Yes.

What Standards Should You Use?

Often in a given dispute, multiple principles and criteria will be available for you to consult. Here are a few of the types of principles you could base your agreement on, according to Fisher, Ury, and Patton:

• Market value
• Precedent
• Scientific evidence
• Professional, industry, or ethical standards
• Standard form contracts
• Cost estimates
• Legal rulings
• Tradition

Putting Principled Negotiation into Practice

How does principled negotiation work in business and personal disputes? Imagine that you and your next-door neighbor have agreed to split the cost of having a new fence installed on your property line. However, the neighbor says that the fence needs to be installed one foot closer to your property because the current fence is in the wrong place. You could disagree, but that won’t get you very far. A more productive course would be to get a copy of the plat of survey for both your properties and find out the official property line is drawn.

When you’re negotiating with objective criteria, the Getting to Yes authors suggest the following three guidelines:

1. Frame each issue as a joint search for objective criteria. Remember that despite your conflicting interests, you have a shared goal to determine a fair outcome. Look for shared principles that both sides find compelling. Be sure to choose criteria that are not influenced by, or biased toward, one party or the other. For example, if you need a legal opinion, seek out a lawyer who has no past association with either party or clear bias toward one party’s perspective.
2. Be reasonable about which standards are most appropriate and how to apply them. When you and the other side are presenting possible criteria, keep an open mind. If each party advocates for a different standard, look for an objective basis on which to choose which is more appropriate, such as which is more widely used. Alternately, you might be able to reach a compromise between the outcomes suggested by your two different standards. Finally, you might ask a neutral third party to choose a standard for you.
3. Yield to principle, not pressure. “Pressure can take many forms: a bribe, a threat, a manipulative appeal to trust, or a simple refusal to budget,” write Fisher, Ury, and Patton. Such power tactics in negotiation can be hard to resist. If the other party is pressuring you to accept a standard that you view to be illegitimate, and if he or she refuses to listen to reason, don’t give in; instead, walk away.

When you discuss your area of disagreement through the lens of independent standards, you sidestep the common temptation to defend your own position and tear down the other party’s. In the process, you increase your odds of coming together—both in the short term and during the life of any agreement you reach.

What forms of objective criteria do you use in principled negotiation in your field?

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The following question about contingency contracts was posed to Katherine Shonk, editor of Negotiation Briefings and a Harvard Kennedy School and Harvard Business School Research Associate.

Contingency Contracts and Negotiation

Question:

Lately I have been hearing a lot—both in the news and on the job—about companies using contingencies in contracts. Given that I sometimes negotiate deals that entail a lot of risk regarding how future events will play out, I am interested to know how contingencies work and how I might use them.

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Answer:

Contingent contracts have, indeed, been in the news recently, and you are correct to view them as a tool for managing risk. Negotiators often try to overcome their differences of opinion about how future events will unfold through persuasion techniques. A more fruitful approach might be to “bet” on your differing views. By adding incentives or penalties based on future performance to your contract, you protect both parties against risk.

When bidding for Groupon late last year, Google tried to hedge against uncertainty regarding the Internet deal company’s future performance by structuring a high percentage of its $6 billion offer as “earn-outs”—payments Groupon would receive only if it hit certain performance targets. Ultimately, this contingency was insufficient to bridge the gap between the two companies when Groupon balked over possible antitrust delays.

Mergers and Acquisitions Negotiations and Contingency Contracts

Here’s another recent high-profile mergers and acquisitions (M&A) negotiation you may have read about. In October 2010, the Paris-based international pharmaceutical company Sanofi-Aventis SA made an $18.5 billion, $69-per-share takeover bid for the American biotechnology company Genzyme Corp.

Sanofi was hoping to boost revenues, as patents on some of its key products were expiring. Genzyme shunned the offer, saying it was too low, and refused to open its books to Sanofi.

In particular, Genzyme felt Sanofi was undervaluing its star pipeline product, a potential multiple sclerosis (MS) drug. Based on an encouraging midstage research trial, Genzyme predicted that Campath, originally a leukemia drug, would capture one-quarter of the $13 billion global MS market. By contrast, Sanofi estimated the drug would sell about $700 million annually, the Wall Street Journal reports.

The differing predictions set the stage for a contingent contract in which Sanofi and Genzyme could bet on Campath’s success in the MS market. Breaking months of impasse, financial advisers for both companies began to negotiate contingent value rights (CVR) that would give shareholders an added benefit if Genzyme hit a future benchmark tied to sales of Campath.

By late December, after unsuccessfully shopping itself to other pharmaceutical firms, Genzyme reportedly was warming to Sanofi’s bid. At this writing, analysts were predicting that Sanofi would raise its bid to about $75 per share. If talks ultimately fail, Sanofi has threatened to pursue a hostile takeover by attempting to replace Genzyme’s board with members who are more friendly to its offer.

When two parties legitimately disagree about future outcomes that affect their deal, they should be willing to bet on their beliefs by negotiating a contingent contract.

Contingency contracts are common in M&A, professional athletics, and building projects. But negotiators in many other realms could benefit from betting on their differing predictions by structuring incentives and penalties rather than resorting to persuasion techniques that have low odds of success.

Have you ever had to Agree to Disagree? Let us know in the comments.

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Adapted from “Agreeing to Disagree,” first published in the March 2011 issue of Negotiation.

Originally published in 2013.

At one point or another, most of us have hired an agent to negotiate on our behalf. When we feel out of our depth or stuck behind closed doors, an agent—whether a real-estate agent, lawyer, literary agent, or financial adviser—can provide the knowledge, experience, connections, and negotiating skills needed to get us a great deal.

Our agents can become such trusted partners that we often forget to consider conflicts of interest arising from the fact that their financial interests are almost never perfectly aligned with our own. A real-estate agent may advise you to offer more for a house than is necessary in the hopes of wrapping up a quick sale and earning their commission. A lawyer who bills by the hour may spend more time than is necessary on your case. A dispute between TV writers and their agents shows what can happen when we fail to examine such conflicts of interest closely.

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With a New Business Model, Growing Conflicts of Interest

In 2019, TV writers’ wages were stagnating at a time when they should have been rising, thanks to the growth in streaming, according to the Writers Guild of America (WGA).

Traditionally, Hollywood agents have taken a minimum 10% cut of the deals they negotiate for writers. In the early 2000s, the major talent agencies—William Morris Endeavor (WME), Creative Artists Agency (CAA), United Talent Agency (UTA), and ICM Partners—increasingly moved from relying on agency commissions toward content ownership, the New York Times reports. They did so by accepting cash infusions from private-equity firms in exchange for partial ownership.

As Hollywood agencies began to mutate into “full-fledged media conglomerates,” Vanity Fair reports, the large agencies moved from negotiating deals for individual clients to bundling clients into package deals. In a typical package deal, an agency offers a studio the key elements of a TV series from its stable of talent, such as a showrunner, writers, and a star or director. Studios pay packaging fees to agencies up front, as well as a percentage of a show’s future profits. Packaging can be far more profitable to agencies overall than the commission model.

The rise of packaging created untenable conflicts of interest in agencies’ relationship with clients, according to the WGA. Because agencies were compensated based on the predicted success of a show rather than on how much their client would earn from it, they were motivated to keep labor costs low to boost a show’s long-term profits. The agencies countered that their writers were earning more from packaging because their agents waived their commissions. The WGA disputed this claim.

The WGA also objected to the three largest agencies (WME, CAA, and UTA) using private- equity money to create their own content-production divisions, saying writers get subpar deals when they are essentially hired by their agents. The agencies argued that their representation and production divisions were run separately and that agents have a strong motivation to retain their clients.

A Time for New Negotiations

In April 2019, following unproductive negotiations with the Association of Talent Agents (ATA), the WGA told its members to fire their agents until writer-friendly improvements were made to the system. The WGA also sued the four leading talent agencies, alleging unlawful conflicts of interest. Within days, about 80% of TV writers with agents, including Shonda Rhimes and Stephen King, sent termination letters to their agents.

Without their agents, many found new work through their networks. For entry-level writers, the WGA created a script submission system. As a result of the dispute, it was possible that most writers would not have agents in the “near future,” predicted film and TV producer (and former agent) Gavin Polone in the Hollywood Reporter.

The trial was delayed by the pandemic, which also imposed financial hardships on both sides by putting film and TV production on hold. Over the course of two years, the agencies caved in one by one, agreeing to do away with packaging fees and return to a commission payment model, Vanity Fair reports. They also agreed to limit their stake in production companies. It was a huge win for the writers—and for many of their agents, a big relief.

Preventing Conflicts of Interest

When interviewing potential agents, think about the conflicts of interest an agent may face when representing you in your negotiations. Compare their proposed compensation terms to industry standards. If you identify any conflicts of interest, openly discuss your concerns, and explore alternative compensation models.

In addition, scrutinize new business models when they arise. The WGA tolerated talent agencies’ packaging practices for decades before arguing that they were unlawful. Examine counterparts’ new ways of doing business from the start, and renegotiate your contract at regular intervals.

How have you avoided or managed conflicts of interest in your industry?

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When we think of successful leaders, we typically envision a solitary person—a president, CEO, or entrepreneur—drawing on their vision, charisma, and drive to inspire and direct others. As our world grows increasingly more connected and complex, however, this top-down approach to leadership is becoming increasingly outdated. More and more, organizations are replacing charismatic leadership by a single person with new models of collective leadership.

What Is Collective Leadership?

In collective leadership, a group of people with diverse skills and experience come together to work toward goals that they develop jointly. As compared to traditional leadership, in which one person makes key decisions after consulting with others, in collective leadership, the group empowers the person or people with the most relevant expertise to tackle particular problems and implement solutions. When needed, the group engages in consensus building or conflict resolution to reach decisions and resolve any disputes that arise.

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“Multiple individuals within the team may serve as leaders in both formal and informal capacities,” explain Tamara L. Friedrich of the University of Oklahoma and her colleagues in an article on collective leadership in the Leadership Quarterly, “and the shifting of leadership responsibilities is often rooted in which individual’s expertise is most relevant to the given problem.”

Thus, this type of leadership is a social process rather than a series of top-down directives. To succeed, it requires “trust, shared power, transparent and effective communication, accountability, and shared learning,” write Cassandra O’Neill and Monica Brinkerhoff in Nonprofit Quarterly.

Principles of collective leadership are rooted in organizational theorist Mary Parker Follett’s 1924 concept of “the law of the situation,” which advised people to follow the person with the most knowledge of the situation at hand rather than the official authority. “Collective leadership is based on the assumption that everyone can and should lead,” write O’Neill and Brinkerhoff. After all, in the real world, the knowledge needed to solve complex problems rarely can be found in one individual.

When Costa Rican diplomat Christiana Figueres visited the Program on Negotiation to receive its 2022 Great Negotiator Award for her work spearheading the 2015 Paris Agreement on climate change, she said in an interview that collective leadership had served the talks well. Because “the challenges that we face are so complex,” Figueres said, the world is moving in the direction of collective leadership.

Benefits of Collective Leadership

“In collective leadership, there is shared responsibility and decision making, accountability, and authentic engagement,” write O’Neill and Brinkerhoff. As a result, collective leadership can enable organizations to “break down functional silos, integrate global offerings, and work closely with multiple stakeholders,” write University of Mississippi professor Kristin L. Cullen-Lester and her colleagues in an Industrial and Organizational Psychology article.

Because this type of leadership requires collaboration and broad buy-in, it can be expected to generate more stable solutions than decisions made by a single top leader. Collective leadership also avoids the disruption that organizations face when their top executive moves on.

Unlike more autocratic leadership structures, collective leadership assumes skilled individuals are capable of doing their work without constant supervision. By empowering workers to complete assignments on their own—rather than micromanaging them—collective leadership can increase workers’ intrinsic motivation and deepen their job satisfaction.

“Collective leadership recognizes that lasting success is not possible without diverse perspectives and contributions,” write O’Neill and Brinkerhoff. As such, organizations that aim to be more diverse, equitable, and inclusive might see particular value in collective leadership. By making leadership less hierarchical, a collective leadership structure should give women, people of color, and other frequently marginalized stakeholders a greater voice in leadership decision-making. Leaders will have greater incentives to take many perspectives and experiences into account.

Collective Leadership in Action

Collective leadership need not entirely eliminate the role of a primary leader; rather, it can allow “leadership to shift according to expertise and task, and move between team members as the collectivistic process changes,” write Salisbury University professor Jill Caviglia-Harris and her colleagues. The lines between leaders and followers are less clearly defined in collective leadership than they are in hierarchical leadership.

As a case study of effective collective leadership, the researchers describe how an interdisciplinary team of scientists, extension specialists, and practitioners worked with farmers in the U.S. Corn Belt to develop and introduce a novel conservation practice, prairie strips. Team members collaborated on designs that would integrate small amounts of wild prairie among corn and soybean crops to improve soil, water, and biodiversity. Farmers determined for themselves the best design for their farm and implemented the prairie strips with government funding.

The collective leadership process has become the largest private land conservation program in the United States. “Crucial to this process was the recognition of farmers as professionals and as the experts on their farms,” write Caviglia-Harris and her team. The researchers survey farmers annually to solicit their feedback and knowledge, and share the data they collect on the farms with the farmers as well.

How well have initiatives worked in your organization or industry? 

In an episode of the American television show The Office, bumbling manager Michael Scott consults with a manual on conflict resolution while attempting to mediate a dispute between two of his subordinates, Angela and Oscar. After Scott explains that there are five approaches to resolving conflict, beginning with “win-lose,” an annoyed Angela interrupts: “Can we just skip to whatever Number 5 is—win-win, or whatever?”

“Win-win is Number 4, and Number 5 is win-win-win,” says Scott, consulting his manual. “The important difference here is with win-win-win, we all win. Me too. I win for having successfully mediated a conflict at work.”

The scene’s intention is comic, but as we will see, it reflects a genuine confusion in the workplace: What is a win-win negotiation, anyway?

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From win-lose to win-win

In the 1980s, the way in which people thought about negotiation changed dramatically, writes Massachusetts Institute of Technology professor Lawrence Susskind in his book Good for You, Great for Me: Finding the Trading Zone and Winning at Win-Win Negotiation (PublicAffairs, 2014). Thanks in large part to the collaborative spirit of Roger Fisher, William Ury, and Bruce Patton’s bestseller Getting to Yes: Negotiating Agreement Without Giving In (Penguin, 1981), millions of people came to believe that win-win negotiation is an improvement on the dominant win-lose mindset.

Yet as the concept of win-win negotiation diffused to became a catchphrase, confusion grew about what exactly it entailed, as Susskind notes in Good for You, Great for Me. In win-win negotiation, are counterparts supposed to divide resources evenly? If one party has more to offer, shouldn’t they get the bigger piece of the overall pie? How could a powerful party justify a 50-50 split to its constituents? Was competing really so bad, anyway?

More to the point, can it still be a win-win negotiation if you’re trying to gain as much as possible for yourself?

The answer to that question is a definite yes. Win-win negotiation doesn’t require you to split resources right down the middle with a sole focus on being “fair.” It doesn’t mean automatically making a concession just because the other party made one. And it doesn’t mean that you should try to avoid conflict and tension at all cost.

Rather, win-win negotiation involves working to get the best deal possible for yourself while also working to ensure that your counterpart is satisfied (see also, Win-Win Negotiations: How to Manage Your Counterpart’s Satisfaction). It means making offers that are good for them and great for you, according to Susskind. And it means thinking creatively about how you can get more of what you want by helping the other side get what she wants.

A win-win negotiation example

Consider the following examples of a highly creative win-win negotiation. In a recent blog post for Forbes, Hootsuite CEO Ryan Holmes how, at the tail end of his team’s difficult negotiation with a potential vendor to sell Hootsuite’s education product, the two sides reach an impasse on the question of who would pay for the credit card fees associated with their future sales. The fees were only a small fraction of sales, but both sides felt they’d given enough and refused to budge.

As the deal threatened to collapse, Hootsuite finally agreed to pay for the fees—on the condition that the vendor agrees to take two Hootsuite representatives out for a nice steak dinner each time they achieve revenues of $100,000. Though the “steak dinner clause” was financially lopsided at first (the dinners cost far less than the credit-card fees), Holmes says it’s turned out to be a “huge win-win.”

Why? Because the dinners turned out to be “a powerful way to build a business relationship with this vendor,” according to Holmes. “We now do more business with the vendor than ever, a relationship that both sides have benefitted from.” A minor sacrifice on price—a win for the vendor—proved eventually to be a win for Hootsuite, as the steak dinners generated lucrative new business opportunities.

Win-win tradeoffs in negotiation

As this example shows, what might first look like a win-lose negotiation may turn out to be a win-win negotiation down the road. Finding your way to a win-win negotiation often involves reaching mutual gains by trading off their differing preferences to create value.

Here are a few types of differences that negotiators can capitalize to build win-win negotiations:

1. Different interests and priorities.

Hootsuite had a strong interest in building a long-term partnership with the vendor; the vendor was focused on getting a great deal on price. This difference led Hootsuite’s team to propose a value-creating tradeoff that led to a win-win deal over time.

2. Different beliefs about the future.

When parties have different beliefs about how the future will unfold and affect their agreement, they can negotiation contingent contracts—“what if?” proposals that stipulate what each side will do if its vision of the future does or does not come true, writes Susskind. If each side truly believes its predictions will play out, both should be happy to “bet” on those predictions in their contract—and enable a win-win deal.

3. Different attitudes toward time.

Negotiators often have different time horizons that enable wise tradeoffs. Suppose that two investors are interested in buying a business together. One is looking for quick returns, while the other can be more patient. They might reach a win-win agreement by agreeing that the less patient party will get a larger percentage of early returns in exchange for agreeing that the more patient party will earn a much larger share of returns down the road.

Clearly, win-win negotiation offers far more flexibility than just splitting resources 50-50. By capitalizing on differences and negotiating assertively, negotiators can move into win-win territory.

Share your favorite win-win negotiation story with us in the comments.

Related Article: Negotiating for a Winning Coalition

Win-Win Negotiations: Can’t Beat Them? Join a Coalition

Win-Win Negotiation Example: Different Cultures and Shared Meals

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Whenever we are trying to reach a goal and need the help of another party who has different preferences, we negotiate. In most negotiations, we face two goals: value claiming and value creating. Value can be defined as anything you would like to get out of a negotiation, whether it be more dollars, a consulting contract, a new rug, an end to a conflict, and so on.

Value claiming, also known as distributive negotiation or single-issue negotiation, involves trying to get as much of the pre-existing value on the negotiating table for yourself—and away from the other party. An example would be haggling over the price of a rug at a foreign bazaar. Value creation, or integrative negotiation, involves looking beyond the most obvious issue, such as price, for new sources of value that can be brought to the table to expand the pie. For example, when negotiating for a job, you might move beyond salary to include issues such as vacation time, responsibilities, flex time, and so on to create value for both parties.

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At times, a negotiation will have only a distributive component—that is, there are only opportunities to claim value and not create value. You might have difficulty finding other issues to add to the mix when haggling for that rug, for example. Far more often, however, there are hidden sources of value you can add to the discussion to create value.

To succeed at the bargaining table, professional negotiators become effective at both distributive negotiation and integrative negotiation. Ideally, you should be able to create more value by negotiating trades across issues and then claim the lion’s share of that value for yourself through distributive negotiation strategies.

Prepare for value claiming

Here are four key steps you can take to improve your negotiating skills and thoroughly prepare to claim value, from Northwestern University professor Leigh L. Thompson’s book The Mind and Heart of the Negotiator:

1. Assess and improve your BATNA. In negotiation, your best alternative to a negotiated agreement, or BATNA, is often your strongest source of power. When you have a strong alternative, you will be ready to walk away from any deal that is inferior to your BATNA. Wise negotiators not only assess their BATNA before negotiating but spend considerable time working to try to improve it. For example, a job candidate might continue to search for other jobs while negotiating a particular offer or might try to negotiate one or more offer at the same time.
2. Calculate—but do not disclose—your reservation point. In negotiation, your reservation point is typically a figure or offer that represents what you need to get at the table that will prevent you from pursuing your BATNA. For example, if you have a job offer for $70,000 a year from Firm A, and hope to do better in negotiations with Firm B, you would determine the lowest amount (such as $75,000 or $80,000) Firm B could offer you to convince you to take the job. Because your reservation point, also known as your walkaway point or bottom line, is the least amount you are willing to accept, it is generally wise not to share it or your BATNA with your counterpart across the table, even if you trust and like the other party, lest they take advantage of this information.
3. Research the other party’s BATNA and reservation point. It’s important not only to determine your own BATNA and reservation point but to estimate your counterpart’s BATNA and reservation point. This knowledge will help you determine how far you can push the other side. You can make these estimates by thinking about and researching the other party’s alternatives and resources, such as how much they might have to spend and what other negotiating opportunities might arise for them.
4. Evaluate the ZOPA. When you have a sense of each party’s reservation point, you will be able to evaluate the zone of possible agreement or ZOPA. The ZOPA encompasses the range of all possible deals that both parties would find acceptable, explain Harvard Business School professors Deepak Malhotra and Max H. Bazerman in their book Negotiation Genius. For example, if you, as a job candidate, would accept a minimum of $75,000 from a firm, and your research suggests they might pay you as much as $85,000, then the ZOPA is $75,000-85,000. Your ZOPA will also help you set an ambitious but realistic target, such as $85,000. 

By undertaking this type of analysis, you are well positioned for effective value claiming in both distributive negotiation and integrative negotiation.

Do you have any tips for value claiming in negotiations? Share them in the comments below.

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Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.