Negotiators frequently fall into the trap of believing that dominating their counterparts is the best way to win. In reality, employing a collaborative approach achieves better negotiation outcomes. Here's why a collaborative approach is superior to a dominating approach.
A dominating strategy to negotiation takes an aggressive, individualistic approach to negotiation. In this case, you view the negotiation as a win-lose situation. You try to pressure your counterpart into compliance by negotiating from a position of power.
This approach focuses only on making short-term gains. For example, you might try to optimize your inventory management by demanding that a supplier decrease their order lead times. If the supplier seems unwilling to comply, you may threaten to reduce your orders or find a different supplier.
While this strategy may work for one-time deals, it can be highly detrimental to long-term relationships, especially with vendors. Your counterpart will likely be unsatisfied with the negotiation outcome when you get your way by using the dominating approach. Consequently, they may be unwilling to make good offers in future negotiations.
A collaborative negotiation strategy takes a win-win, problem-solving approach to the negotiation. When you negotiate collaboratively, you openly share information with your counterpart and encourage them to do the same. Doing so enables you to evaluate each other's needs instead of dwelling on the differences.
The characteristics of collaborative negotiation include:
A long-term perspective
Associated with strategic partnerships
Willingness to make concessions
Collaborative negotiations aim to uncover joint benefits and resolve differing interests. This approach is the most suitable for long-term relationships, such as vendor-buyer relationships, in which there will be future negotiations.
Listen actively to hear your counterparts' positions and acknowledge them. Give these positions careful thought to unearth the underlying interests and propose solutions that take your counterpart’s interests into account.
The solutions you offer may be in the form of a proposed contract. Make sure it’s detailed and looks good. A well-presented contract demonstrates your credibility. Likewise, your attention to relevant details confirms that you heard your counterpart. You can convert from PDF to Word to create visually appealing contracts.
Here are a few more tips for achieving collaborative negotiations.
Depersonalize the problem
Make a clear distinction between the definition problem and the solution
Explore multiple alternative solutions
Expand the value that both parties receive
Generate a bridge solution
Don’t be afraid to take breaks
Communicate clearly and articulately
Mutual solutions are more indicative of negotiation success than individual benefits. Collaborative negotiations are more likely to achieve mutual solutions in which both parties gain economic value from the negotiation and are satisfied with its outcome.
Be open to the fact that the other party may not be able to offer what you want. In that case, you may need to walk away from the negotiation and find a different partner. Even if you don’t get what you want, end the negotiation on good terms as you may have to engage the vendor in the future.
Collaborative negotiation is more beneficial in the long term because rather than pitting you against your counterpart, it enables you to form long-term partnerships that benefit you both.
Visit your local chamber of commerce to learn more.