Negotiating Smarter: How to Create Value Without Being Exploited

Negotiation is often portrayed as a battle—one side wins, the other loses. But real negotiation, especially at its best, is about creating value while managing the unavoidable tensions between cooperation and competition.

In their influential book Beyond Winning: Negotiating to Create Value in Deals and Disputes, Robert H. Mnookin, Scott R. Peppet, and Andrew S. Tulumello explain that the core challenge of problem-solving negotiation is not eliminating this tension—it’s managing it (Mnookin, Peppet, & Tulumello, 2000, pp. 27, 40, 42–43).

How can you create value while minimizing the risks of exploitation in the distributive aspects of negotiation?

The challenge of problem-solving negotiation is to acknowledge and manage this tension. Keep in mind that this tension cannot be resolved. It can only be managed. The goal is to design processes for negotiation that allow value creation to occur, when possible, while minimizing the risks of exploitation ....

No matter how good you are at brainstorming and no matter how carefully you search out value-creating trades, at some point the pie has to be sliced.

What happens to interest-based, collaborative problem-solving when you turn to distributive issues? Some negotiators act as if problem-solving has to be tossed overboard when the going gets tough. We could not disagree more. In our experience, it's when distributive issues are at the forefront that problem-solving skills are most desperately needed.

[The] goal at this point is to treat distributive issues as a shared problem. Both sides know that distributive issues exist. She knows that, other things being equal, she'd like to earn more and [he] would like to pay less. There.'s no getting around it. At the sawe time, however, she doesn't want to behave in a way that would damage the relationship ....

Sometimes of course, you won't be able to find a solution that satisfies both sides. No matter how hard you try, you will continue to disagree about salary, the amount to be paid in a bonus, or some aspect of a dispute settlement. Norms may have helped move you closer together, but there's still a big gap between-the two sides. What should you do?

Think about process. How can you design a process that would fairly resolve this impasse? In a dispute, settlement, you might be able to hire a mediator to address the distributive issues that are still open. Is there anyone both sides trust enough to decide the issue? Could you put five possible agreements into a hat and pick one at random?

Procedural solutions can often rescue a distributive negotiation that has reached an impasse. They need not involve complicated alternative dispute resolution procedures that cost money and time. Instead, you can often come up with simple process solutions -that will resolve a distributive deadlock and allow you to move forward....

The problem-solving approach ... will not make distributive issues go away or this first-tension of negotiation disappear. But it does outline an approach that will heIp you find value-creating opportunities when they exist and resolve distributive issues efficiently and as a shared problem.

Robert H. Mnookin, Scott R. Peppet & Andrew S. Tulumello, Beyond Winning: Negotiating to Create Value in Deals and Disputes 27, 40, 42–43 (2000).