“Win-win” remains the most popular philosophy in negotiating. It’s also the least effective.
“Most people think that a ‘win-win’ happy ending should be the ultimate goal in any negotiation,” writes Lewis Schiff in his forthcoming book, Business Brilliant.
The book draws from his research on high net-worth creators and how their behaviors and attitudes differ from middle-class norms. Schiff, who is executive director of the Inc. Business Owners Council, discovered that middle-class survey respondents think win-win solutions are best. Wealth creators don’t.
The “win-win” approach runs afoul of what professional negotiators call the “least-interest principle.” Schiff explains: “In any relationship, especially a business relationship, the person with the least interest in continuing the relationship is the one with the greatest power for setting its terms. The weaker your interest, the stronger your leverage.
As G. Richard Shell puts it in his best-selling Bargaining for Advantage: Negotiation Strategies for Reasonable People, ‘The party with the least to lose from no deal generally is the party that can afford to insist that critical terms break its way.’ All other factors aside, being ready to walk away from a deal is your best guarantee that the deal will work for you.”
In Business Brilliant, Schiff summarizes a negotiation approach that does observe the least-interest principle: “Many hundreds of books have been written about negotiation and its various strategies. Most include some variation on the same essential three-step negotiation preparation process–three steps that have very little to do with win-win.”
- Identifying a specific goal or set of goals
- Making a thorough study of the other party and its bargaining position
- Determining the point at which you will walk away
Negotiation guru Michael C. Donaldson sums up the three steps as ‘wish, want, walk.’ You set the goal for winning, determine what you want to know to get it, and then draw the line at which you’ll walk.”
None of this insight into negotiation is new, of course, and most of it sounds straightforward. So, why are so many people bad at it? Schiff reports that Shell, a professor at the Wharton School of the University of Pennsylvania, offers three reasons:
- They set goals that are too modest.
- They fail to prepare.
- And they lack desire.