Negotiation Tips

How to Adopt Win-Win Negotiation Strategies - 5 Tips

Commercial negotiators recognize the importance of achieving a win-win situation: when both parties are happy with their agreement, the chances of a long-term and successful business relationship are significantly better. However, tangible ideas for producing a win-win negotiating contract might be difficult to come by. The following five tips, courtesy of Harvard Law School's Program on Negotiation, can assist you and your opponent strike a win-win bargain.

1. Make many offers at the same time.

If you simply make one offer at a time, you will learn very little if the other side declines it. Consider what happens if you provide many proposals at the same time, each of which is equally useful to you, suggests Harvard Business School professor Max H. Bazerman. If the other party rejects all of your offerings, inquire as to which one she prefers. Her choice for a certain offer should give you a good idea of where you may uncover value-creating, win-win deals that will benefit both parties.

Making various proposals at the same time signals your accommodating and flexible attitude, as well as your willingness to understand the other party's preferences and wants, in addition to discovering possible win-win actions. Eliminate common bad habits of argument and grudge. So, the next time you're prepared to make an offer, Bazerman suggests making three that are equal in value.

2. Consider a conditional agreement.

Parties to a discussion frequently come to an impasse because they hold opposing views about the possibility of future events. You may be certain that your company will complete a project on time and on budget, but the customer may find your proposal unreasonable.

According to Massachusetts Institute of Technology professor Lawrence Susskind, in his book Good for You, Great for Me: Finding the Trading Zone and Winning at Win-Win Negotiation, a contingent agreement—negotiated "if, then" promises aimed at reducing the risk of future uncertainty—allows parties to agree to disagree while still moving forward (PublicAffairs, 2014).

According to Susskind, contingent promises can provide incentives for compliance or consequences for noncompliance. For example, you may offer to pay certain penalties if your project is late or agree to dramatically cut your rates if you go over budget. To include a contingent agreement in your contract, start by having both parties sketch out their own scenarios for how they think the future will play out.

Then, for each scenario, negotiate expectations and standards that seem reasonable with the productivity boosters you have. Finally, in your contract, list both the situations and the stipulated penalties and rewards. A contingency agreement can assist you to achieve a win-win situation by increasing your chances of being pleased with whatever remedies are in place.

3. Damages should be negotiated in advance.

Because contingent agreements cannot anticipate all future occurrences, another method to nurture a win-win agreement, according to Subramanian, is to add liquidated damages provisions in your contract that specify how much will be paid if the contract is broken. Consider that if one party later sues the other for breach of contract, the plaintiff will be awarded monetary damages rather than the exact products or services that were lost if she wins.

As a result, determining in advance how much will be paid for each late or missing delivery, for example, may help to accelerate any alternative dispute resolution or litigation that may emerge. Offer a cup of tea. Furthermore, discussing damages introduces a new problem to the table, increasing the potential for value creation. Adding fresh challenges to the mix in this way raises the chances of a win-win situation.

4. Include a corresponding right.

According to Harvard Business School and Harvard Law School professor Guhan Subramanian, inserting a matching right in your contract—a promise that one side can match any offer that the other side gets later—can be a classic win-win move in a negotiation. Assume you're a landlord attempting to reach an agreement with a potential renter.

The potential renter wants a commitment to rent the flat for as long as she wishes, but you want to maintain the right to sell the unit to someone else in the future. Offering the renter a matching right—the ability to match any legal third-party offer—would allow you to maintain your flexibility while allowing the tenant to avoid the inconvenience of a transfer. Matching rights can boost the chances of a win-win situation in this way.

5. Look for settlements made after a settlement has been reached

Assume you've recently made an agreement. You're satisfied with the offer, but you think you might have gotten a better deal. Conventional wisdom and general knowledge are that you should stop discussing the agreement with your opponent and move on, lest you jeopardize the arrangement. Bazerman, on the other hand, suggests asking the other side if he would be ready to revisit the agreement to see if it can be improved.

Explain to your counterpart that if the amended contract does not enhance both of your outcomes, you are free to reject it. This form of post-settlement agreement might result in new sources of value for you to divide. It can also assist you in drafting a win-win contract if you haven't already done so. Your achievement in reaching an initial agreement may have built the trust necessary to pursue the prospect of a better offer.