One of the biggest deal-killing manoeuvres we see in any commercial or internal transaction is where one party feeds their desire to win. They go out of their way to make sure there is nothing left on the table for the other party and unsurprisingly the other party pushes back.
Greedy People Run Out of Friends
If you take a competitive negotiation stance whereby you try to minimise any value left for the other party, there will be a number of predictable consequences. These consequences may not be immediate, perhaps your position in the marketplace may allow you to get away with more for a period of time… but just like the house always wins when you stay long enough at the casino, so too will these predictable consequences follow:
1. Customers and suppliers are almost certainly going to notice your greedy stance and almost instinctively they will start to be greedy in return.
2. If you continue, you will start to run out of friends as your reputation gets out and people will be less interested in doing deals with you. A state of famine will likely follow as you now find the need to overcompensate and lure customers/suppliers back to the table.
Fair Doesn’t Mean Soft
I’m a firm believer in the concept of fairness in life. There is a really big difference between a ‘good deal’ and a ‘deal from heaven’. It is unrealistic to expect everything to go your way in a negotiation, and if you hold out for it there will be a lot of good deals missed. Good deals tend to be ones where they are easy to sign and don’t get varied because everyone is getting something positive out of the relationship… and that is by no means ‘soft’.
Soft on the People, But Tough on the Issues.
One negotiation approach that makes it easier to manufacture deals where everyone can find value is being really ‘soft on the people’ while still remaining ‘tough on the commercial issues’. Having some empathy will help you to better understand your counterpart’s constraints/ interests/ opportunities/ flexibilities so that you can more readily surface negotiating variables where there is a difference in perceived value. Think of it like this:
- If all we were negotiating was the price, there would either be one winner or two losers.
- Instead, one party may be happy to be flexible on price if they were to reduce risk or improve their exposure to the market.
Therefore, it is incumbent on us as negotiators to slow down and spend more time creatively exploring and understanding what our counterparts would consider ‘wins’… as these may well be things we would happily trade for more of what we want.
Happy negotiating!