Consider the question:
is it possible to win or lose negotiations?
Many schools of negotiation maintain that yes, negotiations can – and must – be won. There is even the oft-prescribed approach of the ‘win–win’ negotiation, which we’ll talk about later. Others maintain that the key to negotiating is never losing; that victory is paramount.
My point of view (and of this I am convinced) is this:
Negotiations cannot be won or lost. What you can do, however, is determine exactly where you are in the negotiation process, and what the next steps need to be.
It is very dangerous to view the negotiation process from a win/loss perspective, for several reasons. Firstly, when our minds are fixed on the win or loss at hand, we focus on tactics at the cost of strategy. Negotiations become duels, and negotiators duellists. Secondly, in the grand scheme of things, something deemed a ‘win’ isn’t necessarily good, nor a ‘loss’ necessarily bad: it’s impossible to predict how agreements will affect future processes. No one knows what the future holds; all we can do is guess. And while today we may be celebrating an apparent negotiation ‘win’, tomorrow we may be lamenting such a bad deal. I can give you any number of examples of this.
An acquaintance of mine did some – to his mind very successful – negotiating with a travel firm, and secured a nice discount on a group tour. He thought he had won that negotiation. However, two days later the travel firm went bust, leaving him out of pocket and down a trip. So does that then mean he lost?
I spent years working in the drinks distribution market, and have seen many similar situations first-hand. For example, after drawn-out negotiations with one major seller, my team was delighted to finally sign our contract. ‘We’ve won, we’ve done it, we’ve got the contract!’ we thought. But not long afterwards the other company went under, without paying us in full for products we had already supplied. What could we do? This is why it is extremely important to always know what your next step after negotiations is going to be.
Negotiations aren’t the final round in a bout to determine winner and loser; they are a process – at times a very long one. This is why from the start you need to rid your mind of any thoughts of negotiations as just another round in a duel. Negotiations should only ever be viewed as a process.
Rudolph Mokshantsev, author and PhD, suggests that negotiations are a complex process comprising:
• the pursuit of an agreement between people with differing interests;
• the discussion of parties’ differing positions in order to find an acceptable solution;
• debate between two or more parties in order to overcome incompatible goals;
• the trading of concessions, in which one party’s concession is a direct and calculated response to a preceding concession from the other party;
• ongoing communication between parties with differing and intersecting interests, through which the parties either reach an agreement or fail to do so, depending on the expected implications of such an agreement.
Negotiations presuppose a dialogue between equal partners that are relatively independent of one another, although in reality this may not be the case.
Negotiations as a dialogue between parties that may lead to an agreement
If we are to speak of negotiations as a science, then the science of negotiation is grounded in mathematics and psychology. The weight accorded to each of these two sciences in the negotiation process will depend on the sphere in which these negotiations are being held. In diplomatic negotiations, for example, mathematics – that queen of sciences – holds particular sway, although psychology shouldn’t be discounted completely. In business negotiations, on the other hand, the balance of mathematics and psychology tends to be roughly fifty-fifty, whereas in domestic negotiations psychology is generally the guiding factor.
Some negotiation models based on theory alone urge us to approach negotiation from a place of logic, to put the psychological aspect to one side. An example of this is the suggestion that negotiators find the ‘mean’ solution as a compromise.
While straightforward enough in theory, this task can be a dead end in practice. Let’s say a seller names a price of 10,000 roubles for a product, expecting to sell it for somewhere between 8,000 and 9,000 roubles. A buyer makes them a counter-offer of 8,000 roubles, although they are actually prepared to pay somewhere in the region of 8,500–9,500 roubles. From a theoretical perspective this is all very straightforward: we simply add the two and divide them to get a mean of 9,000 roubles. And, as I’m sure you’ll agree, this all looks perfectly lovely – in theory. But in the real world, things are far more complicated.
Ivan and Fyodor are negotiating the sale/purchase of a car. Ivan is selling his car for one million roubles, but Fyodor only has 800,000. So Fyodor phones Ivan and says, ‘Vanya, buddy, I’ll give you 800 grand.’ Ivan, having weighed up his own interests against the logic of compromise, immediately agrees.
On the face of things, this is a fair, successful negotiation. We could even go so far as to call it ideal: both sides get what they want. Both Ivan and Fyodor should be very pleased. They should both feel like winners. But this is just at first glance.
Now, try to put yourself in Fyodor’s, the buyer’s, shoes. Sure, you got what you wanted for the money you had, and you didn’t even have to rack your brains to find some extra cash (as you would have done had Ivan dug his heels in a bit more). But didn’t you stop to think how strange it was that Ivan suddenly cut his price by 20 per cent? This question will soon become a torment. ‘Why would he agree to my price so quickly? There must be something wrong with the car . . .’ And with that, your new car – the one that mere hours ago gave you such joy – is causing you pain, filling you with doubt and anxiety.
Now put yourself in Ivan’s, the seller’s, shoes. You will also be tearing yourself apart. ‘Why did I agree to his price so quickly?’ you’ll ask yourself. ‘Obviously I wasn’t expecting the full million, but I could have wrangled another 100,000 roubles from him, 50k at least.’
So where does that get us? It appears that even ideal negotiations are far from perfect in practice. Neither side of this deal came away fully satisfied.
Studies have shown that the probability of reaching a square deal like this one is 0.16, or 16 per cent. But because this probability is actually twice as high as that of striking a deal through a model that involves a more gradual narrowing of differences (which is 8 per cent), many negotiators plump for this option. However, for the most part, the results of these ‘square deals’ are later called into question. Psychology gets in the way. Whereas a model involving a gradual narrowing of differences puts psychology front and centre right from the start, a reliable companion and aide during the negotiation process.
People aren’t computers. We all have emotions.
It is crucial to view your opponent as a subject rather than an object.
At times, we reject even interesting proposals made by our opponents without quite being able to explain why. Of course, we will