Negotiating Tip -Beyond the Box; Expanding the Pie

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In a previous blog I asked if you were an out-of-the-box negotiator.  Personally, I don’t see how you can be an effective negotiator if you stay in your box.  Here’s why.  If you enter a negotiation without alternatives or options than you are setting yourself and the other party up to accepting an outcome that may not be satisfactory to either side.  This “in the box”, fixed outcome is known as “The Pie”.  You can divide the pie up so many ways but it is still fixed and you are still negotiating over some portion of the pie.  Many negotiation studies have shown that better outcomes and better deals come from expanding the pie.  The only way to reach a better outcome is to have alternatives and ways to increase the value of the deal.  

There are two types of alternatives -those that are your best alternative to the current deal and those that help you generate options that will help you solve your problem and reach your goal for the negotiation.  Developing the former gives you the latitude to avoid having to just settle for a bad or unsatisfactory deal.  Developing the latter, expands the possibilities that you or the other party can find and agree to an area of mutual gain and make the negotiation a win/win deal.  Here are some negotiating tips on the latter area.

When preparing for negotiation you should generate or consider a range of options that may best serve your interests and that of the other party. By understanding and clarification interests, both yours and the other party’s; you are then in a position to develop a range of options that best serve everyone’s interests. During negotiations, you should work together with the other party to generate as many options for mutual gain as possible for consideration without having to commit – this creates a climate for joint problem solving.

This process (agreeing with the other party to separate the development of options from committing to those options) allows you to generate a number of ideas or options without stifling creativity and ideas.  Joint brainstorming promotes joint problem solving, collaboration, builds the relationship and promotes mutual gains bargaining.  

After agreeing on the possible options, the next phase is to look at the various options and agree on them.  By waiting to commit to these options you are creating the best possible outcome (win/win) that creates value for both parties.

When you invent or develop alternatives, you are creating a mindset of abundance that will benefit you and the other party.  These benefits come in the form of additional value for both parties, a better relationship and mutual bargaining.

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Comments

  1. Very interesting. I”ll have to think about this and see how I can apply it to what I do.

  2. Wonderful advice Bill. This reminds me a lot of marriage, which is a series of negotiations. When I invite my husband to collaborate we are always so much greater as a whole than two individual parts!

  3. thanks Bill – this makes so much sense: During negotiations, you should work together with the other party to generate as many options for mutual gain as possible for consideration without having to commit – this creates a climate for joint problem solving.

    • Very true. The more options you generate, the more you can expand the pie and both sides can gain value.

  4. I can’t think of how many times I’ve heard you say “expand the pie and negotiations get better.” Great tip, Bill.

  5. I agree, and by the way, I did get a great deal on my car. Thanks for the negotiating tips.

  6. Great advice, Bill. I particularly agree with this “win-win” perspective, “When you invent or develop alternatives, you are creating a mindset of abundance that will benefit you and the other party.”

  7. It always amazes me how little thought is given by most people to the process of negotiation.
    Money is left on the table or deals go undone every single day because of it.

  8. Set high expectations for your negotiation outcome. Too often I see negotiators spend countless hours preparing their bottom line and their concession strategy. Instead, I set high expectations as well as a bottom line. My expectations are both realistic and optimistic. An offer that is a stretch, but one that I can support with reasonable criteria is realistic. By having a high expectation and bottom line you are more likely to achieve an agreement that hits that high expectation. It keeps you focused and motivated to negotiate an outcome that is good for both parties. Also, research shows that those who set a high expectation routinely achieve value that is higher than negotiators who don’t. By preparing and setting high expectations you will be more confident, in other words, have the right attitude, in reaching a mutually beneficial goal.

    • I agree that you should start high and have a winning mindset. Low expectations will yield low results and vice-versa.

  9. Bill,

    Thanks for providing so much great info in this post. I really like your idea of understanding your other party’s interests before the negotiation occurs. We seem to agree wholeheartedly on this. So much planning will definitely aid and expedite the negotiation process.

    Thanks again for the insight. Hope to connect soon.

    Dennis