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Win-Win Negotiation Techniques

Win-Win Negotiation Techniques

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Published by Junaid Shaukat

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Published by: Junaid Shaukat on Oct 30, 2011
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11/08/2013

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Somewhere in the wilderness, a cow defecates. This waste product, as
the term implies, has no value to the cow. A farmer stumbles upon the
dung. He thinks to himself, “I can use this dung to make bricks and build a
house. I can use this as fuel to cook my dinner and warm my family. I can
use this to fertilise my crops and improve my livelihood.” To the farmer, this
waste product is like gold.

Not everyone thinks like me. The fact that others may
value things differently creates an opportunity for a
win-win.

Aha! Moment

Win-Win Negotiations.indd 70

7/21/10 9:35:06 AM

POSITIONS, INTERESTS, CURRENCIES AND OPTIONS 71

Closer to home, a restaurant manager ponders what to do with her used
cooking oil. She could dump it in the alley, creating a stench and risking
a citation from the health inspector. She could pay a waste removal
company to dispose of it. Or, she could sell it to a company that converts
used oil into fuel.

One man’s trash is another man’s treasure. At times you will find that you
value something far more than the other party, and vice versa. This is an
ideal opportunity to create value. If you can give the other side something
it values highly at little or no cost to yourself, you can get a lot of mileage
out of it. Perhaps they can do the same for you. Now you each give up a
little to gain a lot. This is a key to reaching win-win agreements.

Property tycoon Donald Trump tells of a particular piece of property
he wished to purchase, but the owner A was asking far too much. In
negotiating another deal, Trump learned that his counterpart B had an
option to purchase the coveted parcel from A at a much lower price. As B
no longer wished to exercise the option, it was worth little to him — but it
was very valuable to Trump! Trump paid a higher price to B than he would
have otherwise paid because B included the option, which Trump then
exercised to get a much better deal with A. Trump and B had a win-win
based on a differently valued asset.

To identify items that may be valued differently by the parties, here are
some things to consider:

Perceptions:

Some people will pay more to save face, look good,
or have their ego stroked. They will pay a large sum for a shirt with
a designer’s logo stitched onto it, even though the same shirt may be
available without any logo for much less. The perception of value is
important, though it varies among individuals.

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7/21/10 9:35:06 AM

72 WIN-WIN NEGOTIATIONS

Risk:

People have different risk profiles. Some people are risk averse,
while others boldly accept risk. A more risk averse party may be willing
to concede more if her negotiating counterpart is willing to assume
certain risks involved in the transaction. People buy insurance from
companies that absorb risk, and insurance companies themselves
routinely buy and sell allotments of one another’s portfolios to share
risk.

Combining similar resources and skills to achieve economies of scale:

There is power in size, and there is power in numbers. Two or more
parties can pool their demand to negotiate more favourable rates from
suppliers. For example, a number of small independent grocers can
band together to obtain lower prices from a food producer.

Combining different resources and skills to accomplish together what

neither could do alone: Entities with complementary attributes can
create synergy. For example, a landowner and a building contractor
can form a joint venture to develop the property and get a better return
than either might have otherwise enjoyed.

By exchanging currencies that are valued differently, each side can get
more by giving up less! What painless concessions can you make that
might be valued by the other party? What might they easily do for you that
would be of great value to you? By focusing on interests and exploiting
differently valued resources, you are more likely to attain a win-win
outcome.

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