6 steps to creating a win-win

Written by Kim Shiffman

Patrick McWhinney says one of the toughest issues in a negotiation is finding a way to get what you want without damaging relationships. He should know. The Harvard-educated Canadian is CEO of Boston-based training and mediating consultancy Insight Partners, and an internationally recognized expert in mediation, negotiation and conflict management. In fact, he spent part of January in Iraq, helping its new government to develop negotiation skills in a post-dictatorship, wartorn political arena.

In order to preserve relationships, says McWhinney, you can’t give away what you need. This struggle is sometimes referred to as the “substance-relationship tension.” McWhinney offers his six top guidelines to help you navigate this tension without sacrificing either substance or relationships.

1. Prepare both substance and process

Negotiations take preparation. You have to decide beforehand what options you’re willing to commit to and what you can live with. But you should also plan the process; that is, how the meeting (or sequence of meetings) will go. Will the discussions be by phone or in person? Which issues must be discussed? In what order?

In addition to preparing the content of your message, consider the impact of what you’re going to say. Work on framing terms constructively. There are usually many different ways to deliver an idea, and the way you frame it can be as important as the idea itself. Says McWhinney: “This can have a tremendous impact on overall negotiations.”

2. Focus on underlying interests

Did you ever have a boss who asked you to cut costs by 10%? Did you ever consider that she might have been equally happy if you were to increase sales by 15%? People tend to articulate their needs in terms of specific, rigid demands, also known as positions. While the two parties’ demands might not be compatible, their underlying interests are often very compatible — if they can just discover what they are.

Here’s another example: One of your very best employees wants an increase in compensation. You’re not sure you can afford it, yet there may be something else that meets the employee’s underlying interest that’s easier to give. So you need to ask the employee why he wants the increase. Maybe it’s because he’s feeling overworked and wants to feel compensated; in this situation, a paid trip to Hawaii might do the trick.

When negotiating, move the conversation away from positions into demands. Staying at a positional level leads to splitting the difference, leaving both of you unhappy. A common assumption in negotiation is that not everyone’s interests can be met, but that’s simply not true.

3. Search for unexploited opportunities

Typical agreements include a degree of waste. The best way to get more value out of a deal is by reducing that waste, not by trying to extract it from the other person.

A couple of years ago, McWhinney began doing workshops in Bermuda. After negotiating fees with a new client and coming to an agreement, McWhinney looked at whether there was an opportunity being wasted. He soon found out that the new client had many connections in Bermuda, whereas McWhinney had none. It wasn’t long before they came to a new agreement: McWhinney would offer a small discount to the client in exchange for access to the client’s community. In your business, this might translate to asking a key customer to refer you to 10 colleagues instead of increasing your fees. You’ll happily give him a discount in exchange for referrals, and he’ll be pleased to retain the same rates.

So, toward the end of any negotiations, ask: “Is there anything I could do for you that would cost me little or nothing but would mean a lot to you?” If the answer is no, fine. But in seven out of 10 times, estimates McWhinney, you’ll find that there is in fact an an opportunity.

4. Provide proof of fair treatment

People will accept agreements more readily if they understand why they’re fair. When you feel like you’re being taken advantage of, you often walk away upset from a negotiation, and relationships suffer. People tend to care more about being treated fairly than about a little extra money. That’s why it’s a powerful tactic to point to external benchmarks that justify why an agreement makes sense. Customers are more likely to accept a 10% increase in fees, for example, if they know that all your other customers are paying the same.

5. Rebuild trust

People often make extreme demands and use money as a proxy for their concerns about relationships. The temptation is to respond to their stated demands, but if you rebuild trust first, you’ll have a better foundation from which to address any substantive problems. So if an employee is demanding more money, he might just be feeling that he’s not being valued for his contributions. You could solve the problem by increasing his salary, but it’s probably a better strategy to tackle the relationship issues explicitly.

6. Avoid threats

Threats almost always backfire. Use objective standards instead to demonstrate why your perspective makes sense. If you tell a supplier, “If you don’t improve your prices, I’m going elsewhere,” you may get what you want, but you’ll usually suffer damage in the long term.

Originally appeared on PROFITguide.com