I have recently watched a video on “The 7 Myths of Win-Win Negotiations” by Professor Horacio Falcão. I have a lot to learn.
This lecture was recommended to me by a friend that had the pleasure of doing a workshop based on Prof. Falcão’s method. Not only was my friend impressed by what he learned, he claimed that the course paid itself back after the first closed contract.
I feel like I have been very lucky every time that I negotiated a new job. I got more or less what I wanted, but have I gotten all I could have gotten? I don’t know. I feel like I am bad at negotiating, usually revealing way too much way too soon. I always say I am too transparent.
The first few minutes of the talk were eye-opening. In a way they felt like a personal attack - some of my regular behaviours being highlighted. What I thought were good habits of negotiating were wrong, according to this framework. Let’s dive into the notes I took during this video.
Prof. Falcão describes two types of negotiations:
- Win-Lose Negotiations
- Win-Win Negotiations
In Win-Lose Negotiations, power is used to get what you want. This is what we call strong arm tactics. We have more power, more money, more resources, and we leverage our position to close a deal. By the end of the process, one of the parties is not happy. Ask yourself, would you be able to negotiate with them again?
Then there is Win-Win Negotiations. Before we dive into what we should do to run a win-win negotiation, let’s first discuss what people think it is.
Prof. Falcão shows some statistical data that highlights 7 behaviours people think are associated with win-win negotiations. You should:
- Trust others
- Listen actively
- Be transparent
- Be nice, just give
- Be fair
- Be faithful, loyal
- Commit to a win-win outcome
However, all of these behaviours are wrong, or limit your ability to negotiate. These behaviours are positive, but they are naive. Our goal is not to be an angel, it is to reach a win-win outcome for both parties.
Why are these behaviours naive? For example, you might assume that by engaging in all these behaviours the other person will reciprocate. What if they don’t? What can you do? Will you be bitter, angry, frustrated? That surely can’t lead to a win-win outcome…
Make no assumptions about reciprocation. You have to be positive, not naive.
Maybe a more realistic assumption is: “They will lie to me, they will take advantage of me. Let me negotiate reciprocation, instead of expecting it.”
So what are the myths of Win-win Negotiations and how do we get over them?
Myth #1: Trust others
When you really think about it, why should you trust the other person in a negotiation?
Realistically, you don’t know them, they are not your friend. They are trying to close a transaction, and they want to get what they need.
What is trust and respect in the context of negotiations?
- With trust, I do things without data about how the other person acts
- With respect, I will give you the benefit of the doubt
The best thing to create during the negotiation process is mutualism. When it exists:
- You don’t need to like each other
- You don’t need to trust each other
- But when the interests are aligned, you are rowing in the same direction
So, the question to ask yourself is: “How can I know if there is something in this for you?”. Once you understand what motivates the other person, you build upon that answer.
Myth #2: Listen Actively
Listening is a passive act. Prof. Falcão states during his talk: “A dog can listen, a negotiator learns”.
You’re listening to ask questions that will let you learn. What else is there that you don’t know?
The negotiation process is a discovery process, and understanding the other side better will help you reach better outcomes.
Myth #3: Be transparent
I say this a lot: “I am transparent”. In my mind, you should be transparent to be a good person, and to achieve good outcomes. However, this lecture has definitely changed my mind on this subject. I no longer believe that transparency is the best tactic, and have decided that in the future I will be “translucent”.
Quick dictionary definitions:
- Transparent: having the property of transmitting rays of light through its substance so that bodies situated beyond or behind can be distinctly seen;
- Translucent: permitting light to pass through but diffusing it so that persons, objects, etc., on the opposite side are not clearly visible
Being transparent will at times provide too much information. And too much information can actively hurt you! It’s not helpful to get to a win-win outcome.
Imagine you are in a salary negotiation, and your interviewer asks you: “What is the minimum amount of money you require to live on a monthly basis?”.
You can surely do all the math and come up with a value, but would you share that value? This question is very unfair - the answer gives a lot of power to the interviewer at your expense. Being transparent in this situation will not let you arrive at a financially advantageous situation. You can, and should, push back on a question of this type.
You can say: “Help me understand why I should answer that question. Help me understand how that will help me get a meaningful, reasonable deal. I can answer that question, but if you are going to use that against me, I will feel mistreated. That will leave me unhappy and I won’t last a long time, and my goal is to be here for a long time. So can we talk about something else?”
Notice how this answer is translucent also, and not transparent. You might be thinking: “Wow, you are a horrible person, and this is a horrible question. What the heck?!”
So, be translucent - not everything comes through, just what is useful. Just enough information to get good outcomes for both parties.
Myth #4: Be nice, just give
Some people give, expecting that by giving the other party will be happy, close the deal, and walk away. However, the other party might just want more. It’s important to stop giving this signal.
Don’t give, exchange. Give something, take something.
The conversation should be about: can you bring enough value to the table, and can you give enough value in return. The moment you establish that link then you don’t have to give anymore - you can exchange. The value of the exchange will be different for both parties, it just needs to be enough so that you don’t fall into the trap of giving more than required.
Myth #5: Be fair
Fairness is really difficult to define. It changes for each party. We normally focus on “What is fair to me?”, we never talk about what is fair for the other side. So it is common that the other side ends up frustrated.
Has anyone ever said “No, no, this is unfair to you, let’s not do this.”?
Don’t be fair, build common meaning. Things need to make sense to both sides. When you look for fairness, you just see the world from your perspective. When you try to build common meaning, you see the world from their perspective and yours. And then you build a solution that is sustainable.
Myth #6: Be faithful, loyal
Don’t be loyal. Be faithful to the process.
If you make enough good moves with this process, the sequence of good moves will take you to a place of more value, and less risk. Don’t panic and change if things are not working immediately.
Myth #7: Commit to a win-win outcome
Don’t commit to an outcome, don’t limit yourself.
We should commit to an effort. Commit to your behaviour. Commit to a process.
Ending thoughts
I know that this article ended up quite long. If you just jumped straight to the end looking for a TL;DR, here it is. It’s about being win-win, and how to be win-win. Stay positive, and not naive.
What should you do in practice?
- Create mutualism
- Ask and learn
- Be Translucent
- Exchange instead of giving
- Build common meaning
- Be faithful to the process
- Commit to putting effort in
I will try to adopt this framework for a while, and see what it brings me. It won’t always be perfect, but I will try to not panic, try not to be naive, and I will commit to the effort and the process.
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