This webinar provided delegates with an opportunity to free themselves from common misconceptions about the negotiation process while equipping them with tools to achieve better win-win agreements. Fundamental to transforming our negotiation activity is the need to rid ourselves of certain fixed thinking that impedes creativity and limits our ability to create options for mutual gain. These points are thoroughly brought to life, with clear action points to take away and apply. The webinar was delivered in partnership with Powercall Global Training, represented by CEO Anthony Maddalena.

Defining negotiation 

Anthony begins by first defining negotiation. Taking a definition from business, Anthony defines negotiation as a “bargaining process (give and take) between two or more parties (each with its aims, needs, and viewpoints) seeking to discover a common ground and reach an agreement to settle a matter of mutual concern or resolve a conflict.”

There are two revealing elements within this discussion. The first part is bargaining as a give and take process. This implies that you will need to make compromises within negotiation or give concessions to reach a win-win settlement. The second part of the definition describes negotiation as a bargaining process between two or more parties, each with its own aims, needs, and viewpoints. Anthony explains that while this may seem obvious, many of us go into negotiation without being mindful about the aims and viewpoints of the other party. That is, we spend much time crafting our negotiation strategy around our must-haves whilst forgetting the needs of the counterparty.

Therefore, negotiation is not a tug of war. Instead, it is about creatively putting together solutions using a bigger picture. Anthony argues that creativity is not necessarily something that we associate with negotiation. However, it is essential, especially if we are going to be expanding the negotiation pie. Truly effective negotiators take care of their counterparties aims, needs and viewpoints as carefully as

Positional bargaining

Whilst many people may think they are negotiating, Anthony contends that they are engaging in ‘positional bargaining.’ Positional bargaining is an “approach that frames negotiation as an adversarial, zero-sum exercise focused on claiming rather than creating value. Negotiators who bargain over positions are usually reluctant to back down and become interested in saving face.” Thus, positional bargaining involves holding on to a fixed position of what you want and arguing for it alone, regardless of the other party’s interests. A classic example of positional bargaining is the haggling between a customer and seller over the price of an item. Positional bargaining is not negotiating because there is zero creativity involved in the process.

Anthony explains that there are two sides of positional bargaining: soft bargaining and hard bargaining. In the soft bargaining style, participants are friends, the goal is agreement, and the parties tend to make concessions to cultivate the relationship and build trust. However, this makes us very vulnerable to those who play hard. Anthony argues that a soft bargaining style, will likely result in a deal that you will not be happy with. Hard bargaining is the reverse. This is someone who views the counterparty as an adversary. The downsides are that you risk damaging the relationship, and you are more likely to miss opportunities.

Invent options for mutual gain

To create healthy relationships with your counterparty, it is imperative to invent options for mutual gain. As Anthony explains, great negotiators are constantly on the lookout to see what the other side views as important to use it as leverage to widen the deal. In sales, this is referred to as add-ons i.e., how to add value to a deal. However, it is a difficult skill to develop because several obstacles are standing in our way. The first is premature judgement. To prevent this, we need to think fast and not jump to conclusions because it will impede our ability to invent options for mutual gain. We have to be very careful of that internal critic, which may prevent us from being as creative as possible in negotiation. Thus, the first thing is to silence the inner critic.

Secondly, we need to rid ourselves of the assumption of a fixed pie. A fixed pie is the idea that when we give things away, we’ve lost them, and we can never get them back. The fixed pie fallacy is also generally used to refer to the notion that there is a fixed amount of wealth in the world. To counter this fallacy, train your mind to realize that there are more options than you think, i.e., bake a larger pie.

Truly effective negotiators take care of their counterparty’s needs and aspirations as much as their own. Another obstacle is thinking that your counterparty’s problem is only their problem—it is also your concern because if you can help them find solutions to their problems, it will potentially help create win-win situations.

Finally, the last obstacle is thinking that there is only one way of arriving at a solution. This line of thinking creates a mentality in which we become defensive. Consequently, we are more likely to fall prey to tunnel vision. If you are stuck in the mindset that there is only one way to arrive at a solution, you close down all the options for listening to what the other side wants, hearing their needs, and ultimately crafting better agreements.

Next, Anthony explained how to invent options for mutual gain. The first way is to separate the act of inventing options from judging them. In other words, silence the inner critic and be careful not to doubt yourself and your ideas. Second, search for mutual gains. Anthony argues that there are several ways of doing this. For example, the best negotiators will have pre-negotiation meetings with their counterparty’s, in which they will sit down, talk about the problem, and discuss options for mutual gain. Moreover, the two parties will create a list, and on this list there may be areas of divergence, in other words, goals that seem to be clashing and goals that are aligned. On this basis, you can start creating options for mutual gain and thinking more creatively about crafting that solution. In addition, you can potentially become aware of what the sticking points might be, before you even go into the negotiation table.

Third, broaden the options on the table instead of looking for a single answer. Put differently, be open to other ways of approaching a problem. Fourth, invent ways of making the counterparty’s decision easy. This can be done by taking care of the other side’s interests and not just focusing on your own interests. Put yourself in their shoes. One good idea is to draft a proposal to which they can respond with a “yes.” A draft proposal is a good way of seeing how aligned or not you are with your counterparties. If they do not respond positively, you then know that you will need to be a bit more creative in inventing options for mutual gain.