One-time encounters or long-term relationships: when negotiating strategies should differ

by Julie Rains on 29 October 2007 5 comments
Photo: Dan..

For years, I struggled to negotiate effectively with a business associate (I’ll call him Mr. X), despite concessions gargantuan in my estimation but miniscule and unacceptable in his opinion. With other such associates operating under nearly identical business models (Mr. A and Mrs. B.), I had reasonable discussions that led to mutually beneficial agreements. Listening to a podcast by mind-mannered negotiation guru Dr. Josh Weiss, I finally discovered what was wrong.

In his Negotiating Tip of the Day (April 5, 2005), Dr. Weiss presents two approaches for negotiating: Positional and Interest-Based, and provides guidance on engaging the proper method depending on the scenario.

Those who adopt the POSITIONAL APPROACH:

  • Open with “overly high or overly low” offers; 
  • Seek to maximize gains in the short-term.

Those who use the INTEREST-BASED APPROACH:

  • Want to fulfill certain interests with the goal of solving specific problems; 
  • Don’t see the other party as an adversary;
  • Allow others to satisfy his/her interests; 
  • Recognize interdependence of the relationship between the two negotiating parties; 
  • Realize that short-term profits may not generate long-term benefits; 
  • Resist exploitation of the other party.

The positional approach is best for one-time encounters, such as negotiating the price of a car or an item “at a bazaar in a far-off land”; whereas the interest-based approach is ideal for nearly all other situations, such as the negotiation of service levels, particularly when a business relationship is involved.

Mr. X routinely wanted me to lower my prices and accelerate my turnaround times. I offered lower fees in exchange for a percentage of his commissions (which my work helped him generate) or resources dedicated to him in exchange for volume guarantees, neither of which satisfied his demands. Our relationship, viable in previous years, soured.

In contrast, Mr. A and Mrs. B told me their needs and accommodated mine. Only after listening to Dr. Weiss’s tip did I realize that I was participating in interest-based negotiations with them; and I could never reach an agreement with Mr. X because he took a positional approach to what should have been an interest-based discussion.

Want to improve your negotiations? Consider your negotiating scenario, pick your approach (positional or interest-based), and proceed. If you encounter Mr. X., walk away.

Dr. Weiss holds a Ph.D. from the Institute of Conflict Analysis and Resolution at George Mason University and is the Associate Director of the Global Negotiation Project at Harvard University.

0
No votes yet
Your rating: None
ShareThis

comments

5 discussions

Add New Comment

CAPTCHA
This test helps prevent automated spam submissions.
Guest's picture

This is excellent advice. There's a great book on this same topic called "Crucial Conversations," which explains many types of communication errors and describes the best ways to achieve mutual purpose.

Philip Brewer's picture

Being willing to walk away is always key to a successful negotiation. Although walking away from a Mr. X is a reasonable choice, as long as you're willing to walk away, you also have the option to go ahead and deal with him in a "positional approach" negotiation--go ahead and ask for enough that you can negotiation down to what you're willing to accept.

It sucks to have to do that. It's not pleasant and it takes time that could be spent doing something useful; worse, there's always the danger of accidentially doing so with Messrs A and B, thereby harming a potentially positive relationship. Still, if there's interesting, profitable work to be done, you have the option of letting Mr. X be the one to walk away, by sticking to your guns.

Myscha Theriault's picture

I've never heard of the speaker you mentioned. I'll have to check him out. Good job making what could be a complicated point very succinct and applicable. Thanks.

Julie Rains's picture

Thanks for the positive comments. I had always thought I was just not aggressive enough with Mr. X so I was pleased to learn that his approach was at odds not just with me but with sound tactics, though I am certain his methods served him well in other negotiations. You are so right Philip when you say that walking away is valid in many negotiation circumstances but it is often overlooked; if the communications/negotiations continue (for whatever reason including ongoing requests from the positional party), then standing firm is next and at that point, seems to be more readily accepted by Mr. X and company.

Guest's picture
Bart

Your article got me thinking about the politics of dating - when two people end up having "relations" too soon it often burns out the whole relationship. There seems to be natural evidence that short term gratification and long term gratification are mutually exclusive. Does anyone know of a situation that short term maximization yields the best long term results?