Negotiating Is Not the Same as Haggling

negotiating is not the same as - hero

There’s a popular misconception that in a negotiation you can either “win” or preserve your relationship with your counterpart — your boss, a customer, a business partner — but you can’t do both. People assume they need to make a choice between getting good results (by being hard and bargaining at all costs) or developing a good relationship (by being soft and making concessions to build the relationship). Thinking that way is dangerous, however, because you need both: You have to be able to stand firm and maintain important relationships.

Too often, a typical negotiation goes something like this:

Party 1: Here’s what I want.

Party 2: Here’s what I want.

Party 1: OK, I’ll make this small concession to get closer to what you want. But just this one time.

Party 2: OK, since you did that, I’ll also make a small concession. But just this one time.

Party 1: Well, that was the best I can do.

Party 2: Me too.

Party 1: I guess I need to get my boss involved (or find someone else with whom to negotiate).

Party 2: I may need to walk away, too.

Party 1: Maybe there’s something I can do. What if I make this additional concession?

Party 2: That would help.

Party 1: I’ll need to get a concession from you then.

Party 2: OK. What if we agreed to split the difference?

Party 1: It’s a deal.

Sound familiar? This is a common approach, often called “positional bargaining.” People believe that if they go into the negotiation looking stern and unmovable, and then make small planned concessions and not-so-thinly veiled threats along the way, they’ll have more influence and get the results they want. But in my view, that isn’t a path toward negotiation that gets you what you want. It’s simply a haggle, a concessions game that forces you (and your counterpart) to compromise.

Positional bargaining isn’t all bad. It can be quick and efficient. It requires little preparation other than knowing what your opening offer is, what concessions you’re willing to make, and any threats you might use. And in the end, it always feels like you got something, because if your counterpart played his role, then he conceded as well. In fact, positional bargaining works great when you are negotiating simple transactions that have low stakes and you don’t care about your ongoing relationship with the other party (think about agreeing on a price for that leather couch off Craigslist). But that doesn’t describe the majority of situations.

In almost all business negotiations — resolving a conflict with a customer, convincing others of a change in policy, agreeing on a budget for next year, for example — there is a lot more at stake, and chances are strong that you’ll need to continue to work with the other party going forward. If you were to try to use positional bargaining in those situations, you wouldn’t get impressive results.

That’s because there are serious downsides as well. Positional bargaining rewards stubbornness and deception; it often yields arbitrary outcomes; and it risks doing damage to your relationships. Most importantly, it causes you to miss the opportunity to get more value out of the negotiation than you originally expected. In other words, you won’t be creative and find ways to expand the pie because you’ll be so focused on exactly how to divide it up.

Perhaps most dangerously, there is an underlying assumption in this approach that you’re in a zero-sum game: If you gain something, the other party has to give up something in return. In the vast majority of negotiations we’ve worked on, there is always more value to be created than originally thought. The pie is rarely — probably never — fixed.

To negotiate more effectively, you need to shift your approach away from this combative and compromising approach and toward a more collaborative one. The figure below shows how to reframe key questions about the negotiation with this approach in mind. For example, instead of asking yourself, “What am I willing to give up?” you might think more creatively and wonder, “What are different ways we can resolve this?” This helps ensure you aren’t shrinking the pie but expanding it.

A Critical Shift in Approaching Negotiations chart

This shift leads to an approach where two parties come together to jointly solve a problem — decide on a contract, create the parameters of a new job, or delineate the conditions of a partnership. Together they dig to fully understand each other’s underlying interests, invent options that will meet everyone’s core interests (including those of people not even in the room), discuss rational precedent, and use external standards to evaluate the possibilities — all while actively managing communications and building a working relationship.

At first read, this may sound like a “soft” approach to negotiation. In fact, it is just the opposite: It takes discipline and toughness to truly get creative and to apply sound decision-making criteria. Taking a joint problem-solving approach does not require, or even condone, sacrificing your own interests. It is about being clear about why you want what you want (and why the other party wants what they want) — and using that information to find a high-value solution that gets you both there.

The benefits of this approach include better solutions, improved working relationships, greater buy-in and commitment, and more successful implementation of solutions.

Of course, there are drawbacks as well. This approach requires more preparation, deeper skill, and real discipline. You may feel uncomfortable at times as you use what may be an unconventional approach. Your counterpart might be uncomfortable as well. She might even interpret your openness to collaboration as weakness and think she can take advantage of you. But if you take a disciplined approach to negotiation, she won’t. In fact, you’ll shape the negotiation and get the results you seek, and often much better ones than you ever expected..

This post is adapted from the HBR Guide to Negotiating.

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    Warwick Brown says: Submitted:

    Great post, Jeff and a key distinction. A bargaining war just damages credibility and has your prospect (and soon to be client) losing respect for you. No-one needs the business THAT badly.