Read an excerpt from:
Chapter 1: The Goal is not a Good Deal, but a Good Outcome
Chapter 3: The Power of Us
Chapter 5: Don't Feed the Bears!
From Chapter 1: The Goal is not a Good Deal, but a Good Outcome
When I began working as a professional negotiator, I envisaged myself making deals: helping companies reach strong and profitable commercial agreements. Instead, I was inundated with contractual disputes, business alliances in trouble, partnerships on the rocks. The disputes ranged from relatively small local purchase and sales transactions to multimillion-dollar international ventures bound by detailed contracts; from recent fallings-out to old battles that had nearly exhausted the parties in courts. Yet, despite this diversity, they had one important thing in common: they had all started out with "yes."
The phenomenon transformed my view of negotiation. Until then I had focused on negotiation as a transaction, with a concrete set of objectives and a definable end. The negotiator's goal, according to every book I read, was to secure a set of terms that would maximize "our side's" gains while giving enough value to the other side to win their agreement. The end of the negotiator's line of sight was an agreement. While he or she might anticipate and try to reduce implementation problems by peppering the contract with performance guarantees, liquidated damages clauses, and so on, the focus remained firmly on the deal.
Yet experience showed me plainly that getting a deal, even a "good" deal, was not enough. Every one of these expensive and emotionally draining disputes had started out as a deal that both parties had felt was good-at least good enough to sign onto at the time. So why were so many going bad? The answer was clear: they were failing to create successful working relationships. A deal is nothing but a promise. A relationship-marked by open, two-way communication, respect, empathy, trust, reliability, and sincere efforts to promote long-term mutual benefit-is what will see that promise through implementation and beyond.
Deals Versus Relationships
Negotiating relationships is a process, not an act or a transaction, because it doesn't have a clear beginning or end. Nor, like a contest on the playing field, does it have one winner and one loser. Your goal is to reach an agreement to work with another party in the future, under conditions that enable both sides to prosper.
Traditional deal-based negotiation is transactional. It's about this deal, these terms. Get a signature, and you're done. With its emphasis on winning and losing, transactional negotiation is frequently compared to a game (of wits) or a battle (of nerves). But there is a crucial difference between reaching an agreement and competing in a game or fighting a battle: games and battles don't require cooperation once they are concluded.
There are other critical differences:
- In a deal, the goal is confined to getting an agreement. In a relationship, the goal is working together profitably, starting from the first agreement, then building far beyond it.
- In a deal, the party you are negotiating with is, to a large extent, your opponent. In a relationship, the other party is your preferred partner.
- Deals are about getting as much of what you want as you can carry away. Relationships are based on fair division and joint burden-sharing.
- In a deal, you hold yourself aloof from the other party: hiding information, guarding your responses, pressing your position. In a relationship, you are more relaxed, open, and natural: sharing information and truly seeking to understand and resolve differences.
- In a deal, you may exaggerate the strength of your position or try to trick the other side into giving in. Successful relationships are based on honesty, reliability, and follow-through.
- Deals are static, inflexible, with exhaustive contracts intended to guarantee that every term and condition will remain "carved in stone" until the transaction is completed. Relationships are also based on fundamental agreements, but they are more accommodating, less rigidly detailed. Because relationships take place over time, change needs to be anticipated and managed constructively rather than ignored because it falls outside of the scope of the initial agreement. Relationships are dynamic, not carved in stone.
Not all deals require relationships in order to succeed, of course. When you sell your old car through an online ad or bargain over a ceramic pot in a foreign market while on vacation, it truly is a transactional activity. The goods are delivered the moment the deal is sealed, and you are unlikely ever to see that person again. But such cases are the rare exception. Most negotiations-from mergers and acquisitions, to supplier contracts, to interdepartmental meetings for allocating funding or agreeing on where to hold the company picnic-are for arrangements that will be implemented over time, sometimes years, or that will lead to future arrangements. Even when you are unlikely to meet that individual customer or supplier or even colleague ever again, the relationships you build throughout the negotiation and implementation process will have an impact on your future business by shaping your reputation and the number and type of references you receive.
From Chapter 3: The Power of Us
In addition to helping you avoid the potentially devastating pitfalls of post-deal resentment and retribution, relationship-based negotiation brings a wealth of positive benefits. Through working together to solve problems and create synergy, negotiation beyond dealmaking becomes a platform for generating immediate and lasting gains for all parties by:
- increasing understanding
- building trust
- maximizing value
- reducing resistance and gaining acceptance
Whatever your job-be it salesman, buyer, service provider, business owner, manager, team-worker, consultant, or homemaker-you will find that negotiation goes more smoothly and you get better results by moving from forceful opposition to collaborative problem-solving, from dealmaking to relationship-building.
Looking Beyond the Deal
Although being respectful and affirmative is essential, of course, negotiation based on the relationship is not just about saying nice words. It requires sincerity-and being "in it for the long haul." It means creating deals that are fair and that will be carried out as agreed. It's about approaching negotiation as the foundation for working together productively, not as a game in which one party sees how much it can trick or squeeze out of the other.
As we have seen, focusing on problem-solving rather than fighting or blaming makes negotiation far more likely to end in a value-maximizing agreement. Even more important, it carries the relationship beyond the deal into and through implementation, which brings you strong and lasting returns:
- ensuring reliable and complete carrying out of agreements
- creating more productive, cooperative, and sustainable working relationships
- building loyalty
- reducing conflict and the high costs associated with conflict resolution
- paving the way to future agreements
From Chapter 5: Don't Feed the Bears!
When you look beyond the deal, managing the behavior of the parties becomes far more important than it is in a short-term transaction. In a transactional negotiation your focus is on getting an agreement, after which you move on, letting someone else worry about implementation. As a result, if you encounter aggressive and demanding negotiators on the other side, it can be tempting to give in to their demands in order to get the deal or just to make them go away. In relationship negotiation, however, every action sets the terms of the subsequent relationship.
One of the most dangerous snares that transactional negotiators fall into is what I call "the bear trap." By this I don't mean those mechanical iron jaws used to capture bears but rather the powerful, finger-length claws bears are endowed with for capturing their prey and destroying anything that gets in their way. If you have been to Yellowstone Park in Wyoming, you have seen signs warning visitors not to feed the bears. Why is it so important? Quite simply because once you feed bears, they will learn that you are a source of food. And since they have enormous appetites, they will come back for more. Gratitude and moderation are not qualities bears understand.
In negotiation, "bears" are those people who press you for unjustified discounts, one-sided concessions, or undue favors. They want something for nothing. Their sole objective is for you to satisfy them. Giving in to their demands merely whets their appetites. Even if they accept what you offer this time, they will demand more the next time you negotiate. Worse, they'll actually come to resent you-as your willingness to give in plays into their mistrust, convincing them that you were inflating your terms to begin with and may still be cheating them now. So they push harder and demand more. Be assured, human bears are no more grateful or restrained than their four-legged cousins. That's why "Don't feed the bears!" is one of the most valuable messages all negotiators should keep in mind.