Negotiating for mutually beneficial outcomes, as rightly pointed out by Patrick Collins, Gavin Kennedy, Chris Voss, et al., “should be the definitive aim of any negotiations.” Despite the competitive nature of negotiations, options that benefit both parties encourage cooperation, mutual respect, and opportunities for long-term sustainable relationships.
While most negotiation teams enter a negotiation process with “a win” in mind, various factors contribute to the outcome and overall negotiation success or failure. There are four primary negotiation outcomes: Win-win, Lose-lose, Win-lose, and Lose-win.
Brad Spangler succinctly describes a win-win outcome as “when each side of a negotiation feels they have won. Since both sides benefit from such a scenario, any resolutions to the deliberations are likely to be accepted voluntarily.”
To Ben Richardson, “A win-win is a mutually acceptable outcome for parties to the negotiation. To him, neither side gets everything it wants, but both sides gain more than they lose…….. It is a way of handling an issue that should allow everyone to move forward, happy that they’ve been considered, and leads to net positive outcomes.”
In this situation, negotiators come together with similar objectives and goals that are compatible, and opportunities for win-win outcomes are enhanced. Win-win outcomes provide stability and encourage possibilities for developing long-term, mutually beneficial relationships.
For a win-win scenario, negotiation counterparts can reach an agreement equal to or better than their BATNA (Best Alternative to a Negotiated Agreement). Alternatively, win-win outcomes can emerge when negotiators find alternative solutions that meet both parties’ needs.
- build positive, value-adding, and productive relationships
- increase the trust level among the parties to the negotiations
- build mutual respect
- are an excellent long-term supplier-customer relationship management strategy
- enable potential joint market strategies
To facilitate win-win outcomes, negotiators must ensure they have planned correctly for their negotiation and clearly understand their BATNA,s ZOPAs and WATNAs; they also need to enter the negotiation with a mutually beneficial outcome in mind.
In addition, several other practices should be considered before entering the negotiation process.
Brian Richardson suggests five different ways to reach a win-win outcome:-
1. Focus on the problem, not the person.
2. Focus on interests, not positions.
3. A position is simply a suggested solution.
4. Do your research.
5. Generate many options.
6. Use objective criteria.
Although a win-win agreement may be the outcome, negotiation scenarios are complex and diverse, and sometimes a win-win deal may not be possible. In these cases, the results are divided into win-lose or lose-lose and Lose-win outcomes.
According to Brad Spangler, “Lose-lose means that “all parties end up being worse off.”
In a lose-lose situation, both negotiation counterparts leave the negotiation process in a worse position than when they entered it.
Sometimes, both parties may accept an agreement that does not fall within the parameters of their actual required outcomes. If both parties do not have clear BATNAs, ZOPAs, WATNAs, and walk-away points, they may reach a compromise that seems fair at the time but is ultimately detrimental to both parties. In most cases, if counterparts are too quick to make concessions, they may overestimate the value of the benefits of the agreements and find themselves with a lose-lose outcome.
Leon Selzer asserts that a lose-lose outcome is a result that is bad for all parties that are involved in a negotiation. A lose-lose is also known as a no-win strategy.
A lose-lose strategy is similar to a win-win because just as there are multiple win-win strategies, there are also many distinct lose-lose strategies. To Colin Shaw, “a lose-lose strategy is the hardest negotiating strategy because most people detest losing. Most individuals will not consider a lose-lose strategy because it is repulsive and an anathema.”
For a lose-lose strategy to be effective against a party dedicated to employing such an approach, a first party must, according to the Harvard trainers on negotiations, have “nerves of steel and be willing to lose, not only something but everything. The first party must impress the other party, knowing that if the first party is willing to lose something or everything, the other party will lose more than the first party, if not everything.”
Ann Mar describes a win-lose as a situation where “one side gains and the other lose….. To her, it is an outcome where one side will only close the deal if they feel they have won and the other side has lost.”
Win-lose outcomes emerge in situations where negotiation counterparts are purely focused on their interest and needs and have no regard for the desires of the other involved parties. In this scenario, one party emerges with their requirements met (or exceeded) while the other party accepts outcomes that are beneath their desired negotiation goal. This often happens when the losing party is ‘pushed’ to accept conditions below their original’ walk away point. Usually, the losing party does not have a clear idea of their BATNA ZOPA or WATNA
According to Donald Buresh, this strategy is the same as the win-lose strategy but “not the winner from the loser’s perspective.”
In her book Winning by Negotiations, Tessa Albert Warschaw postulated that “a party employing a lose-win strategy procures what they want by losing…….. “A party that uses a lose-win technique is likely a passive negotiator who does not desire to dominate because the thought of finishing first or winning frightens them,” She affirmed.
To the Negotiation experts, one of Australia’s leading schools for negotiation training, the Lose-Win technique, which was made famous by the Game Theory, is “where one negotiator’s loss is the other negotiator’s gain. Both negotiators are typically competing to claim the most value from a ‘fixed pie’ with value negotiation a form of a zero-sum game.”
To Graydon Candice, Stange Madison, and Mike Dixon, “a party involved in a lose-win strategy may not necessarily be acting in their own best interest, but when negotiating from an inferior societal or business position, a lose-win strategy may be in the best interest of the other party.”
Research to get an idea of your counterparts BATNA, potential ZOPA and WATNA
A clear understanding of your own BATNA, ZOPA, and WATNA is essential, but knowing your counterparts’ BATNA is just as important. Negotiators need to research their counterparts’ requirements, objectives, and desires. They need to know what their counterparts expect from the negotiation process and their agreement alternatives. In addition, understanding their values and what they see as the best-case scenario can help solidify a mutually beneficial outcome.
Once the other party’s best alternatives and non-negotiables are understood, negotiators can determine the ZOPA (zones of possible agreement) and potentially facilitate both parties in a win-win deal.
Pursue your objectives–keeping the other party in mind
Entering the negotiation process, knowing what you want to achieve from it, and pursuing these objectives are essential. However, following your own goals should not result in your counterpart feeling bullied into making concessions or accepting agreements they do not see as favorable for their side.
Asking good questions, clarifying your counterpart’s needs, and having your counterpart’s expectations in mind will allow you to seek solutions or outcomes that are mutually beneficial and acceptable to all involved. Knowing your position and that of the other party will allow negotiators to consider the long-term implications of the negotiation process and will make it easier for them to know when to give and take.
Be willing to walk away
Negotiators must clearly understand their ultimate goals and be willing to walk away from the negotiation if an agreement that speaks to their objectives cannot be reached. Understanding the difference between what you want and what you need from the negotiation is vital to maintaining focus when pursuing a final agreement. Being too attached to a want that is not a necessity can blur the negotiation process and prevent you from reaching a compromise.
While trying to compromise in the negotiation process is essential, settling for anything less than needed can lead to disappointment in the future. If you are not willing to walk away when a deal does not meet your needs, your negotiation counterpart may perceive you as desperate to agree and will use this to their advantage. If you intend to achieve a win-win and fair outcome, you must be willing to walk away when the deal on the table does not speak to your goals.
A six-year research* into director-level perceptions of various aspects of supply chain management by PanAvest International investigated director-level perceptions of negotiations in the supply and value chain management environment.
The purposive study*, entitled “director level perceptivities on aspects of negotiations,” drew on a sample of approximately 64 international organisations, including Fortune 1000, FSTE 250, and JSE 100 companies, as well as state-owned enterprises and government departments. The study involved various CEOs, CFOs, COOs, directors, and officers from engineering, marketing, logistics, supply chain management, project management, procurement, and related industries.
Examining an array of issues relating to negotiations, bargaining, agreements, and contracts, the study revealed that in Africa*, 2percent of public sector lead negotiators were familiar with the lose-win technique for deal-making.
When negotiating from a position of weakness, could the lose-win technique assist African negotiators who most often negotiate from an inferior societal or business position?
Keep long-term relationships in mind
To sum up, although negotiators have a specific outcome in mind when they enter a negotiation, it is crucial that they also consider the type of relationship they are trying to build through the negotiation process.
To end, assuming the negotiation is one of many to come, it means the outcome of the current negotiation could affect future discussions and the opportunities for sustainable, mutually beneficial relationships that continue post the negotiation process. Having a clear idea of the relationship you are trying to build with your negotiation counterpart will allow negotiators to frame the negotiation outcome for sustainability in the future.
>>>the writer is an international chartered director and Africa’s first-ever appointed Professor Extraordinaire for Industrialisation and Supply Chain Governance. He is the CEO of PanAvest International and the founding non-executive chair of MY-future YOUR-Future and OUR-Future (“MYO”) and the highly popular daily Nyansa Kasa series. For more information on COVID-19 updates and Nyansakasa, visit www.myoglobal.org.