0:02
[MUSIC]
Please bear with me while I tell you my favorite negotiation story.
It's very corny, but it makes the point.
In this story, two sisters are quarreling over a single orange.
The argument is heating up and getting personal.
One sister says mom already promised it to me.
The other sister says well dad said that I could have it.
I'll never speak to you again.
I'll never spend another holiday with you.
It's clear that there's a lot of damage occurring in this relationship.
Finally, the sisters decide to cut the orange exactly in half
using scientific measurement.
One sister takes her half, squeezes out the juice, and throws the peel away.
The other sister takes her half, carefully zests the peel
to make her famous orange scone recipe, and throws the juice away.
And then the garbage truck comes and goes.
Then they look at each other.
The whole time you only wanted to the juice?
And I only wanted the peel?
And now it's too late.
This story is very corny, but the point it makes is that if we
never share our interests, we cannot reach win-win outcomes.
If I don't tell you a dang thing,
chances are we're not going to settle upon a win-win agreement.
In my own research with corporate executives, CEOs, and managers,
I find that over 80% of them leave money on the table or
have some parts of the orange in the garbage truck.
How do you reach win-win outcomes?
We are going to introduce five key skills that you can use in personal and
business negotiations.
Number one, fractionate the negotiation into more than one issue.
First rule of thumb, negotiations cannot have win-win potential
unless there are two or more issues.
For example, if the orange did not have juice and
a rind, then we don't have the potential to give one sister all of the juice and
the other the entire peel, so
the first rule of thumb is to fractionate the negotiation into several parts.
I find that a lot of my managers tend to focus on price
to the exclusion of everything else.
By definition, negotiations that are only about price are fixed-sum.
By identifying other issues such as payment terms, conditions, volume,
quality and so on, it is possible to create win-win negotiations.
Number two, prioritize your interests.
Second rule of thumb is to prioritize your interests for each issue.
I often give my students and clients 100 poker chips, and
tell them to stack the chips where they count.
My colleague, professor Jean Brett, created a positions and
interest chart to help negotiators prioritize.
Start with the first column and
list all of the issues, price, terms, quantity, delivery date.
Then, rank order them in terms of importance.
Then indicate what your position, state a demand, and
interest underlying goal is for each issue.
Finally, make your best guess about the opponent's priorities and interests.
Number three, reveal your interests.
Most negotiators are reluctant to share any information.
I did a research study on this and coached some negotiators to do one of the three
things within the first five minutes of a negotiation.
Some revealed information about their priorities,
others asked questions about the counter party's priorities, and
then, a control group did whatever they dang well wanted.
The results?
Negotiators who revealed information about their interests and
priorities improved their own outcomes by an average of 10%.
Number four, ask questions about the other party's priorities.
Asking questions is equally important.
My favorite questions are what is more valuable to you, X or Y?
What is your rank ordering of the issues?
Would you rather I made a concession on issue Z or issue W?
If I gave what you wanted on Z could you give me what I need on Y.
4:30
Number five, devise multi-issue proposals that logroll parties' interests.
Had the sisters realized that one needed only the juice, and
the other only the peel, they could have engaged in logrolling or
fashioned a value-added tradeoff.
Let me give you an example of this in the real world.
Consider Greek yogurt producers Chobani and Fage in upstate New York.
It takes about four gallons of milk to produce one gallon of Greek yogurt.
The problem?
The process of making thick Greek yogurt creates an acidic watery
byproduct that's not toxic, but difficult and expensive to dispose of.
A win-win solution was reached when the Greek yogurt producers discovered
that the Albany Wastewater Treatment Plant valued the byproduct.
In fact, the Albany Wastewater Treatment Plant Use millions of
gallons of whey to run all the generators in the municipal plant,
offsetting a $500,000 a year electric bill.
[MUSIC]
Leigh ThompsonJ. Jay Gerber Distinguished Professor of Dispute Resolution and Organizations
