024 Negotiation

Spring has sprung.  Alex, thinking seasonally, sees a lot of people moving into new positions for the next challenges in their lives. As they negotiate new opportunities, Bob and Alex talk about the basis of negotiations.

Bob compares value claiming and value creation.  Value claiming is about trying to win the biggest part of a fixed size pie, or any thing with no opportunity to create value.  This is distributive bargaining.  The other side is called integrative bargaining when there is an opportunity to create value.  The good negotiator knows when he has to recognize when to use one approach over the other.  This choice is tied to time urgency, risk, and the over all relationship.

In a team perspective, more often than not, we are trying to create win-win situations when you can create value for the firm.  When there is not common interest, when there are two separate cultures, such as with a merger, there is a great likelihood for a breakdown in the conversation.

When value claiming, you are thinking your want it all and you start delivering ultimatums.  They compare the experiences as oldest and youngest siblings.

To create value, focus on the problem rather than the person.  Find metrics that can measure the good, with the numbers being much less emotional.  When the emotions are piqued, your clarity suffers, impacting your ability to focus on the issues.

Bob suggests  that there are two things you recall need to know–how much you care about the issue, and how much you care about the relationship with the other side.  This is worth some thought because the answer drives at least in part your choice in strategies. An example:  if you care about the relationship with the other side a great deal, but the issue is a small one for you you may want to yield and walk away.  If you care about the other side and care about the issuer, thee may be an opportunity to try to create value for both sides.


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