NFIB

How To Reach a True Win-Win Agreement, Part I
03/ 22/ 2002

Almost all agreements between two or more business parties are reached by some degree of negotiation. At the beginning of a long-term relationship, a win-win agreement is clearly preferable. Both sides emerge from the negotiation feeling that they were part of a workable compromise that allows for good feelings during the relationship. In today's and next week's Workshops, Jeffrey Moses discusses the basis for achieving a win-win agreement. Much of this information is adapted for small businesses from the book Secrets of Power Negotiating, by Roger Dawson.

If you have a small or independent business, you may feel pressure in negotiating with a larger company. To achieve a true win-win situation in which both parties feel that the negotiations were equitable, the most important goal is to always discuss a number of different points. When you have the goal of achieving a win-win-agreement, you should avoid settling all issues except one. If the negotiation comes down to one final issue to be settled, inevitably there will be a winner and a loser, and the win-win feeling evaporates.

Imagine that you're in a negotiation that will establish a contract for the ongoing sale of your product to a large company. The negotiation involves points such as price, features of specific models of your product, payment terms, delivery terms, shipment and handling costs, guarantees, and others. As long as there are a number of issues to be discussed and agreed upon, there is the possibility for give-and-take between the issues. One party can give a little on one issue, the other party can give a little on another. But as soon as both parties agree on all issues except one -- price, for instance -- there is no longer any room for give and take. The negotiation suddenly boils down to that single issue, with the result that there automatically becomes a winner and a loser to the negotiation as a whole.

How to avoid this? Two ways. First, keep in mind during negotiations that you want to avoid coming down to a single remaining issue. Keep the give-and-take flexible so that you always have a number of issues remaining to be finalized. If, however, you suddenly realize that finalization of the negotiation has come down to one issue, you should add an additional issue or two, so that both parties will still have "wiggle" room to avoid a direct confrontation that will produce a winner and a loser.

For example, say that the negotiation described above suddenly is resolved except for price. You realize that you are starting to go back and forth about dollar figures. The moment this happens, look for something additional to offer, so that the other party can give a little on price but still feel like a winner because they got something extra thrown in. You could, for instance, offer to extend the terms of the warranty you're offering, or agree to quicker delivery terms. You and your negotiating opponents can then throw that issue into the negotiating mix, using both price and the added issue for a give and take that will achieve a final win-win situation. As an alternative, you might suggest coming down in price from your side, if your opponents throw in something else that would be advantageous to you. This creates the same opportunity for give and take.

In next week's Workshop, Jeffrey Moses continues this discussion with additional ways to make certain that agreements are reached in a win-win fashion.

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