In most of our daily conversations and discussions, whether with coworkers, friends, or family members, we argue and exchange opinions and recommendations, and suggestions.
Sometimes, we want an agreement on our opinion and assure that those shared thoughts and opinions are heard and applied. So, we try to persuade and convince others, and we try to minimize the resistance against our opinion for our own interest irrespective of the implied loss to others, or for all of our interests and have a beneficial outcome for all, that satisfies each one’s concerns.
This process of going back and forth discussion to reach an agreement between two parties or more is called negotiation. When you are asking someone to get you a cup of tea, asking your kids to do something or study, proposing a solution to a customer, discussing your job offer with an employer, asking your team to do certain tasks, and lots of other similar examples that we are doing daily without noticing, all are NEGOTIATIONS.
Negotiation is when a person wants another person to do or not do something for him or her.
Now, I think you start to rewind some of the key terms that are repeated especially in business, we need to have a win-win strategy, this should be a win-win agreement, we would like to end up that all parties win. True, win-win is a negotiation strategy and it is a choice between the two parties that they want to reach an agreement that satisfies each party, or they will not agree. Another strategy that we are focusing on in this article is not win-win, it is the “win-lose” and it is also known as “Zero-Sum”. Is it a good strategy, when to use it, and when not, and is it okay to be on the losing side and do the agreement? Can you imagine being drilled into a win-lose strategy and you say okay, I agree!
The shortest answer, win-win, win-lose, lose-win is a choice of the partners in the negotiation, each choice is a good strategy based on the context.
So, what is win-lose in negotiation?
Win-lose is only when one person uses power in negotiation. So, it is power-based negotiation. It is the opposite of win-win where each party tries to discuss their interests and open communication to lower the resistance of the other party to get to an agreement for the benefit of both parties.
Let us see an example for a win-lose, imagine that you want to get a partnership with one of the big organizations to jointly work with this organization in different project implementations or become a reseller for their product. As a small company when you start negotiating your partnership agreement, mostly you cannot change anything in the agreement. The big organization will use its power and reputation to define the terms and conditions mainly for its own benefits despite the other options that this big organization can offer your small company from support, training, rewards, …etc. But, it was designed by this big organization based on their view of the market and how this partnership should be to maximize their benefits.
As a small company, you have very little to do or you can choose not to go with an agreement as a lose-win strategy. While comparing the benefits that you will gain, the long-term partnership, the revenues that can return to your company will be bigger than putting your terms and conditions and ask the other big organization to simply agree on your terms.
So, you may decide to choose to have a lose-win strategy with future hopes to have a win-win.
Another example, when your employer starts to do some organizational changes that will affect your role and it will require you to work overtime without a bonus or it may change entirely your role. Your manager will start to tell you about the changes. So, you may feel that this is out of your control and no negotiation process actually and you are on the losing side. You will try to resist and see what options do you have and understand more. You can start thinking about other alternatives to leave the company at all. So, a change that turned your life upside down.
Mature organizations manage this change and negotiation professionally in most cases and they start the discussion early and take the impacted people feedback and discuss the different options with them making sure to give them proper awareness of why this is happening and why it is important for the company and time plan for applying that change.
Personally, I see the win-lose as a choice is not always bad for the losing party. It does not mean that you are actually losing, but it did not maximize your benefits and interests from the negotiation process.
Therefore, is it possible to change win-lose or lose-win to a win-win? For sure, yes, But, you will need to start using the power of group dynamic or other tactics. To illustrate this, there is a historical case study written by Cate Malek about Labor Conflicts: The Case of Two Supermarket Strikes
It started when some big chain supermarkets started to ask their workers to contribute to their health care fees so they can cut some of the workers’ salaries for the business sustainability of the chains and be able to compete. It turned out to be the longest strike for supermarket workers for almost 5 months and 70 thousand workers. Many parties were involved including the government and it impacted the country’s plan for health insurance as well as impacting other companies who started to start production in other markets with lower labor costs and without any obligations on workers’ rights.
The two parties lost a lot, workers started to have debts, many of them lost their home, and others felt that their life was badly transformed. The supermarkets lost billions beside customers.
In the end, many changes have been applied to the laws for workers’ favor, which is a win in the end for workers. But during that conflict, it was a lose-lose. In this case, the author is describing different strategies that can resolve this better at that time.
I found this is one of the important cases that can teach us that the first reason for the failure of negotiation is the communication and active listening for each party’s interest and demands, then decide how to reach an agreement.
There are many public cases of a win-lose strategy as a choice, one of the known cases is Amazon’s Auction for HQ2 when Amazon listed a set of criteria that should be met for the winning city that will have the next HQ2 for Amazon. Many cities have found themselves competing and many things that they need to change to win the bid.
How is this related to digital transformation?
It is in the heart of the digital transformation, every day you may negotiate with your employees to change a process or for doing an improvement. You may negotiate with your customer on a proposal or a solution. You may negotiate with your team to do some tasks and push them to do unplanned tasks. You may negotiate with a customer or you as a customer with a provider on scope boundaries, time constraints, and budget.
Other negotiations that we do daily at different levels to reach the end transformation values and goals. Using power-based and disruptive-based negotiation may be an excellent short term choice in some situations. For your success, you need to consider the communication and the relationship, how much credit do you have to use power as a permanent choice, do you consider the other party alternatives, will it be sustainable?
The Harvard Negotiation Project developed a framework to let people negotiate better, It is considered as a compass of negotiation. I learned about this framework when I started the value negotiation course from INSEAD. The framework contains the seven elements of negotiation which I found a very robust framework to diagnose any negotiation and it helps me navigate the situation of the negotiation and what tools that I have to better negotiate. The seven elements are; Interests, Legitimacy, Relationships, Options, commitments, communications, and alternatives. You can read about the seven elements from this article.
In June 2014, Harvard Business Review published a very interesting article about Two Kinds of People You Should Never Negotiate With, and what strategies you can take if you had to deal with them. The first kind is the one who switches between conciliation and provocation, the second kind is the one who sees people as good or evil only and builds his/her judgment and conclusion based on these two types.
Unfortunately, I have met the two types, the first one was a client of mine, when we have one to one conversation, he is acting very supportive and willing to share and open for communication but his actions were totally against that, when I asked him to start doing what we agreed about, he started making excuses and requests for new things. So, I asked in this situation to involve other parties to understand more and see how others in the customer organization have the same understanding and perspective. I have used one of the recommendations mentioned in the HBR article by going public and making more stakeholders involved in the negotiation process.
The second type was one of the executives at a company that acquired a company from the market. Their strategy mainly was to remove the executives and senior people from the acquired company, I imagine the new executives said “We will learn from them and then give them a good retirement offer which will make everybody happy”. I see this as categorizing people in two parts, all new is good and all old is evil no matter what. I cannot judge their decision, it maybe was a good one for the company.
In conclusion, win-win or win-lose is a choice of the involved parties. In every situation, you have to decide what will be the best, but remember that each one has its own power, it can be money, authority, creativity, quality, you can name it. It is our choice when to use that power to persuade someone for something. My advice, if you are on the weaker side, do not make the other party reach that limit to using the power.
No one will start the negotiation by saying “Hey, this is a win-lose negotiation, I will use my authority to get what I need” You will notice that when one of the negotiation parties starts to see only its benefits and interests and not taking care of your interests as well. So, have a positive mindset, prepare, and happily negotiation.
I would recommend as well reading the 7 Mindset shifts that will boost the effectiveness of teams’ harmony in solutions implementation article, which tackles different shifts that organizations and teams need to consider for better collaboration and long-term partnership.