Why you should always let the other side win

By: Allan Endré Utnes

“Begin with the end in mind,” — Stephen Covey, author of the international bestseller 7 habits of highly effective people.

If everyone takes care of their own interests, the outcome will be a compromise of interests that represents the common good. “I will do what I need to win,” is a common thought process amongst negotiators. “If he/she doesn’t protect their own interests — why should I?” It exemplifies a competitive mind-set, where the paradigm is distributive bargaining set by a fixed pie conviction. The proposition of this article is that everyone, including you, will benefit if everyone can win, thus collaboration towards a win-win should always be the initial intent. Let me explain first the different negotiator personalities and how they interact.[1]

Avoiding (lose-lose)

People who dislike conflict often will avoid it as far as possible. Avoidance can also be a conscious strategy if pursuing negotiations is not worth the conflict, or if it is a trivial matter. It can also be employed temporarily as a tactic like stalling, punishing bad behaviour (if the opposing negotiator takes too many liberties it is not uncommon to cut ties, at least temporarily), or maybe just an attempt to wait until relations have improved making the groundwork for a better deal. Stalling can be an effective tactic against someone who is short on time, and thus actually be a tactic used by someone who is competitive.

Defending against an avoidance negotiator can be tough, as there is a certain need for assertiveness and empathy. Making specific deadlines and put up a long term strategy might help smoothing things over.

Avoiding can often be seen as a lose-lose tactic, if the presumption is that making a deal is more beneficial to both parties than walking away. Avoiding is essentially a no deal opt out, perhaps sometimes without considering the possible consequences. Unless avoidance is deployed as a temporary tactic, or is a strategy chosen because conflict is worse than any possible outcome, avoidance will not protect your interests and you essentially lose.

Accommodating (lose-win)

An accommodating negotiator is someone who values the relationship above the substantive outcome of the negotiation. They are willing to lose the current negotiation to maintain good relationships. They are usually very likeable and generous, and lacks assertiveness and a proper evaluation of their own interests.

An otherwise competitive negotiator may in some instances be accommodating simply because he does not value his concessions. Giving away too much value too easily, simply because you don’t see how much value it is for the other side, will lead to a poorer outcome than necessary for you. Asking for value back in turn for each concession is at the heart of good bargaining. It also helps to avoid buyer’s remorse, which is when someone wins a bargain too easily (for instance if you ask for a 5% raise and your boss agrees straight away, and you are left wondering if you could have asked for 10%). Accommodation may also sometimes be a ploy, like a greek gift, where you receive a concession now with the intent of you giving one back later.

When negotiating with an accommodating negotiator it might be tempting to take them to the cleaners. However, what is a win-lose for you (or a lose-win if you are the accommodating one), might turn into a lose-lose in the long run. Especially if the continuing relationship has great value. For instance, imagine you have a manufacturing business and your supplier is extremely accommodating, obviously more concerned about keeping you as their main business-parter than making sure their business is running smoothly. For you it might be tempting to take advantage and get your supplies at extremely low cost, however, your supplier then goes bankrupt you’ve both lost a profitable arrangement. Short term gains can turn into long term loss.

Competing (win-lose)

Competing negotiators pursue their own interests, even to the detriment of others. They are focused on substantive outcomes, not relationship-building. They are about getting the deal, and will use whatever power and tactics to get their way. The paradigm is distributive bargaining, where value is seen as fixed and the negotiation is merely about allocating value.

Acting as a competitive negotiator has its place in certain situations. In a situation where you need results quickly, or something is not negotiable to you. Another situation is when you negotiate in a one-off scenario, the “buying a rug at the bazaar”-kind of trades. There is no room for collaboration in a negotiation of such small scale. However, a negotiation such as bargaining over a rug at a bazaar can still be win-win, but the competitive style is most likely the most efficient way of getting to that result. The transaction cost may quickly outweigh the value of negotiation in such cases, if a determined collaborative negotiator attempts to find the fair result. In some situations competition might be the only alternative to avoiding or accommodation, if the opposing party refuses to compromise or collaborate. For instance in a dispute between nations, competition might be the only real alternative. Even if the opposing nation would ideally partake in a collaborative effort it might lead to too high transaction cost to be worth it.

A competitive strategy should not be left unchecked, as it risks the relationship between the negotiators and potential third parties to deteriorate. Competitive bargaining might also lead to deadlocks, and a no deal-outcome. When applying a competitive strategy it might be hard to stop. It might be wise to keep a competitive strategy in your sleeve as a last resort, as beginning a negotiation too hard might just ruin the relationship from the get go.

Compromising (win some /lose some — win some /lose some)

Compromise is partly competitive and partly accommodative. Compromise might be what most people consider bargaining, it’s haggling, it’s splitting the difference, it’s you win some you lose some. Compromise is based on positions, just like competitive bargaining, but you give up some of your positions, so the other might have some of theirs. Meeting someone half way like that might reduce strain on the relationship, and it might be time effective, but it also leaves value on the table. As it is time effective, it might be useful when you don’t have much time, as long as you make sure you win the right things and lose the right things.

Compromise is usually what happens when the parties have not prepared properly and end up winging it. They start competitive and eventually cave in to a compromise. The danger of meeting someone half way is that the anchor placed at the beginning of the negotiation has become imperative to the substantive outcome. If you end up compromising make sure you do not reward people for taking extreme positions.

Collaborative (win-win)

Collaboration is when you are high in competition and accommodation, but surpass the position based bargaining of the compromise — and instead focus on interests. It is the negotiation style that increases the pie by looking at the negotiation as a process for the parties to work together to find the best solution of the problem. It is the negotiation style that best protects both the substantive outcome and the relationship between the parties (and possible third parties).

To be a collaborative negotiator you need to listen to what the needs of the other party is, not just their stated opinion. In other words, it is a style that requires understanding and a free flow of information. Thus, it requires balancing the necessary showing of good will against simple naïveté. To collaborate it is essential to build a fundament of trust, and to be careful of the motivations of the other party. A negotiator trying to collaborate might be fooled by the competitive negotiator, therefore it is important not to give up too much information too quickly as a show of good faith.

To adopt an efficient collaborative negotiation style you need to be considerate, polite, well-prepared and open minded. It is the style that in most situations will have the potential for the highest rewards, but at the same time it is perhaps the style that requires the most skill to master.

Don’t be naïve

A concern many might have when negotiating is to not appear, or actually be, naïve. People are worried about being taken to the cleaners, by revealing too much information or being too accommodative. A case can be made that many often are too accommodative or fall into the trap of compromising, when trying to lay the foundations for collaboration. Collaboration requires accommodation and consideration, however it is also high in competitiveness and it is important to remember this. The danger is when trying to make the foundations for collaboration of being unaware of ulterior motives of the competitive negotiator on the other side of the table.[2]

Preparation is key in a collaborative negotiation.[3] Do as much research on the other side as possible, and try to find out their motives, interests and personalities. This way you can work with more information than just their stated position. Furthermore, you should always know your BATNA (best alternative to negotiated agreement), which is the plan b if the negotiation at hand doesn’t go well. Your BATNA will be your walk away point, where you say “no thanks, no deal.” Knowing your bargaining range, and having an idea of the motives and interests of the other side, will create a good understanding of the situation so that any unforeseen arguments that might be made during the negotiation can be taken into account within the understanding already set. Knowing your walk away point protects you from accepting a poor deal, and knowing the interests will aid you in creating solutions necessary for a win-win outcome.[4]

Be wary of your own cognitive biases and possible misinformation. Everyone is human, and we all make mistakes. It is very possible that you do not know all the important factors to a negotiation, thus should be open to change your prepared position following well-reasoned rationale. It is also important to know that in our capacity as human beings we are all susceptible to the cognitive failings of our species. It is important to take a step back and consider not only your alternatives, but also your motives and how they may have changed.[5] For instance, we are all prone to the cognitive bias of escalating commitment, in other words when we have invested much time or effort into something we want to see it through, but if your motive change from making a good deal to making a deal, chances are you might be taken advantage of. Always keep the possibility of “no deal,” even when there are no good alternative agreements.

The basis for collaboration

“He who only knows his own side of the case knows little of that,” — John Stuart Mill.

In competitive distributive bargaining people tend to mistrust one another and will not willingly share their goals and ambitions, or their information. However, for a collaborative effort to occur such openness needs to be established. Research has shown that effective exchange of information promotes integrative solutions, and the failure to reach creative interest-based outcomes usually can be linked to limited exchange of information. However, the sharing of information must be controlled, and the procedure for the exchange must be so that both parties show trust.[6]

The procedure of the negotiation has an intrinsic value itself. This can be termed as process interests, and how the process is carried out can be decisive in the way the parties subsequently will feel about the negotiation. If a party feel they were not heard or their interests were not met, and they pushed around, even if the deal is objectively fair they may feel like it is unfair. Furthermore, the process has an instrumental value in the sense that if it is considered and fair, it will allow for information to flow and set the basis for the collaborative effort.[7]

If the goal of the negotiation is to apply integrative bargaining to increase the pie, it is essential that the parties are open for new solutions as well as new information[8]. The outcome must be seen as a solution to a joint problem, thus a definition of the problem must be stated in such a way that it is acceptable to both sides. It is essential that the issues are depersonalised and any issue is defined in as neutral terms as possible. It might be wise to vent emotions before the negotiations start, and take the feelings of the others seriously, so that during the procedure of the negotiation problems can be discussed in more creative and analytical ways.[9] There are several tactics to find the solutions that will protect both parties’ interests, such as brainstorming, logrolling, unbundling, and so on, but the common aspect of all the tactics is to venture into the negotiation together with a foundation of trust and open communication channels, with a clear view on where the problems are and what value is currently on the table.[10]

One key distinction between integrative collaboration and distributive competition, is that the former focus on interests and the latter on positions. The difference here is that the interests is the underlying motives that explain the stated positions they make. A commonly used illustration to exemplify the difference between interests and positions is that of two sisters negotiating over the ten oranges in the kitchen with the mother as moderator. Both the sisters argue that they need all ten of the oranges, they both need it for cooking. A compromise is that they both get five each, meeting halfway, and they both win some and lose some. The integrative process is that the mother asks what the sisters want to use them for, and it turns out the one need the peel for baking and the other one needs the juice for a sauce. The integrative solution is that they both can get exactly what they want, one sister gets the peel from ten oranges and the other gets the juice from ten oranges. This result will not be possible if the bargaining is done solely on the positions they initially take, namely “I need ten oranges”.

Focusing on interests instead of positions is at the core of collaboration, and with this in mind it is important to note that there are many different kinds of interests. First you have the substantive interests, which concerns the outcomes of the negotiation (how many oranges you get). Secondly you have the process interests mentioned above (how do we figure out how many oranges you get). Thirdly you have relationship interests (how the sisters feel towards each other during and after the negotiation both in relation to the substantive outcome and how they got there). Lastly you have interests in principle, which is whether the outcome is objectively or seemingly fair and ethical. The last kind of interests is important to keep in mind as a big factor in how your integrity is perceived. Being considered a negotiator of integrity can be of great help in later negotiations, not just with the current co-negotiator, but also with future trading partners.

Getting to a collaborative process and eventually solution, requires much preparatory work which might make it difficult to keep a fluidity which is necessary to maintain throughout the entire process. Regularly checking strategies, tactics, valuations and evaluations, is critical to avoid falling into a track either to a competitive or accommodating bargain. Being open minded, yet firm, to listen closely yet be assertive, is the crux of collaborative bargaining. It requires skill, but as far as it is possible everyone will benefit in the long run if everyone benefits in the short term as well. Sometimes, it might not be possible or even desirable to enter a collaborative process, but the appearance of being a win-win negotiator might be valuable to keep nonetheless.

Lastly, for a collaborative negotiation to be successful, it is necessary to assess if the nature of the negotiation is such that it opens for integrative bargaining. For instance, if you advocate on behalf of a group with mixed interests you might be left with no choice but to argue based on positions over interests. Or maybe the interests are directly opposed to each other, for instance a civil rights case, where there is no room for reconciling interests.[11]

If you can’t let them win, make them believe they did

There are a number of tactics designed to make the other side of a distributive negotiation feel like they win. This can be beneficial as it will give you the benefits of being perceived as a win-win negotiator, even when the other negotiator has directly opposing interests to you.

In a one off trade, for instance buying a rug at a market, the seller wants the highest price and the buyer wants the lowest price. If they both know their walk away points, any sum between these two points is within the zone of potential agreement, or “ZOPA”, which means they both theoretically win on any deal in the zone and only lose if they agree to a deal on the wrong side of their walk away point. Yet, most people don’t think about trades in that way, and instead measure the “win” relatively to who got the most out of it, and if it seemed fair and other factors. Perhaps surprisingly, many can also end up making deals worse than walking away, simply due to misinformation, cognitive errors, poor preparation, or overvaluing relationship building.

To make someone believe they made a good deal, you have to make them feel like they worked for it. This leads to tactics such as never saying yes to the first offer and making well reasoned concessions. If you say yes too soon you risk allowing for the buyer’s remorse, which is a feeling that you could have gotten a better deal if you had started out with another bid. Make time your ally and play reluctant negotiator. You might benefit from the anchoring bias, taking an extreme position, and let the other side work for your concessions. Make the other negotiator feel you are close to walking away, and let their irrational escalation of commitment bring them to make a last offer, which you reluctantly accept. Playing the part will sometimes be a real help.[12]

If I win, why should I care if you win (or feel like you did)?

“Win-win is a belief in the third alternative. It’s not your way or my way; it’s a better way, a higher way,” — Stephen Covey.

Some disputes are better solved with avoidance, accommodation, competitiveness or compromise. Usually negotiators will apply strategies based on power or rights, such as who has the most powerful position and run down the other’s resources or like lawyers’ arguing who is right. Some disputes are better solved like this, for instance a civil rights issue where the interest is a statement of rights and a judgement from a court of law will provide a lasting precedence.

However, power and rights — strategies are often used when reconciling interests is possible.[13] Either due to a macho-culture needing to “close the deal,” or fear of losing, or simply inadequacy, many negotiators adopt a distributive mind-set and leave value on the table. Ample research show that integrative bargaining leaves everyone better off. You don’t just get an extra slice of the pie, every slice is bigger!

It can be explained by thinking of negotiations in an infinite game theory strategy, instead of an isolated game. Instead of thinking of the negotiation as what is your best choice in this instance, the question really is: what is my best choice in this instance knowing I will have to deal with this person again later, or that the way I act now might become known to many others. You will get a reputation as a negotiator, and maintaining a good reputation is therefore important.

The substantive outcome, as well as the relationship building, and your reputation following the process of the negotiation, might be important for later negotiations both with the current negotiator and future trading-partners. Many lose-win or win-lose situations may lead to lose-lose outcomes in the long run, because they are treated as isolated incidents, but few things in real life are isolated. It is difficult to determine the ripple effects of a negotiation, but acting with honesty, integrity and maturity, while listening closely to the other side’s interests and advocate an abundance mentality, will naturally lead to good relationships, which breeds happiness and goodwill in your immediate society.[14]

The real controversy, however, is not whether you should go for a win-win when possible, or make an objective win-win also seem like a relative win-win, but whether you should go through with a win when you see the other side actually will lose. To make this decision you must balance the value of the deal against the value of the relationship and the value of your integrity. A case can be made that in some situations a true win-lose will eventually turn into a lose-lose, thus making everyone’s success interdependent. However, this decision must be based on a valuation of the necessity for your substantive outcome in a broader context, and whether or not it is in your interest that the other side win as well.

Conclusion

Making collaboration your initial goal, and by thinking win-win, you might not “just gain a good reputation,” but it has intrinsic value in that it is good. You will sleep in the bed you make, and by starting competitively it will be difficult to later turn it into a collaborative effort.[15] The proposition of this article is therefore not that all negotiations should be collaborative, but that considering whether an integrative negotiation is possible should always be the first consideration. If you are known to be competitive or compromising, it might be difficult to get the other side to join a collaborative effort. The collaborative style is dependent on reciprocity, and thus it is important to build up that trust on a long term basis. If we value our own interests as well as our relationship to the people around us, the collaborative style is the one which best protects your collective interests.[16]

By increasing the pie and make sure everyone gets their oranges everyone is happy.