A Twist on the Art of Negotiation
I try to take a little time each week to learn more about those techniques and approaches that others have found useful in their business or personal lives.
A few weeks ago, I came across an interesting take on negotiating on LinkedIn, which was further defined, expanded upon and supported in a book written by Wharton Business School professor Adam Grant, in his book “Give and Take”. In his book, he identifies three types of people; takers, matchers and givers. Takers try to get as much as possible from others, matchers seek an even trade, and givers contribute without expectation of return.
A typical approach to negotiation is for each side to demand something unreasonable – but not let on that they consider it unreasonable – and then negotiate a “compromise” in the hopes that you will end up closer to your side than the midpoint. Even when the final agreement is declared a “win-win,” this approach backfires because it begins with acts of unreasonableness, selfishness, and distrust.
When the author of the LinkedIn article negotiated a previous employment contract, he decided to forgo the standard proposal/counter-proposal route and requested that the prospective employer write a contract as if they were him, putting in everything that would be in his best interest, and then taking out everything they would never agree to. Since that would be the best he could hope to get, he decided to accept it subject only to an agreement on compensation.
They started with base pay. He wrote down the least he would work for and asked them to write down the most they would offer a perfect person, irrespective of whether he was that person or not. If when they exchanged papers, their number wasn’t higher than his, then they could stop there and save time. Their number was twice the best base pay he had ever received in past jobs, and his request was for $0. He explained that his goal was to give value before receiving compensation.
They did the same thing with profit sharing percentages. However, this time he wanted the highest payout standard for our industry, which happened to match their number. They agreed on that percentage because it maximized his incentive to perform and minimized the risk that he would ever want to go elsewhere. He ran the contract past his lawyer who said he would not change a single word because it offered the best terms he had ever seen.
Seventeen years later, he’s still with the same firm. Perhaps any “win-win” contract could have worked during good times when all they had to do was divvy up winnings, but they also got through hard times together because they started out with a “give-give” relationship that helped each care about the other, even when we had to share pain.
In general, he believes that this approach can be used unilaterally but you are going to have to teach the other side how to “give” in the context of negotiation. His recommendations are as follows:
· Think about what you would want if you were on the other side and ask them to think about the same thing.
· Write down the most you are willing to give a perfect counterparty and the least you would accept.
· Ask them to do the same.
· Say something like, “If later you decide to improve your offer, then I will not work with you because you lied on the first go-around, and I do not work with liars. Likewise you should hold me to the same standard of honesty.” Of course, you can find less harsh words than these.
· Reveal what you wrote to each other simultaneously.
· If you each offer more than the other would accept, and you honestly admit your imperfections, then you will come to an agreement.
If you do this, your relationship will be off to a great start. It may seem weird at first, but just imagine you and a friend are fighting over who will pick up the tab for lunch.
You might not expect this to work but he claims it does. Here’s why: in “Give and Take”, Grant reports that in the business setting, most people are takers or matchers. But they are givers when it comes to the people they care about.
What he discovered is that if you care about other people first, even business people cannot help but care back. Of course, it is theoretically possible that someone cannot reciprocate empathy, and in that case his approach will not lead to a deal.
If you try this and it works out for you, I’d be interested in your feedback. It sounds logical on its face, but you could end up waiting a while for your payday.