Chicago Booth / Leadership / Management / Negotiation / Social psychology

A Journey towards Win-Win

If I were to summarize Professor Linda Ginzel’s negotiation class in a headline, it would be:

A transformation from Zero to Win-Win.

Considering Zero as a starting point, a baseline if you will. It means No Deal for some students, or Zero-Sum for others. As for me, it means avoiding problems and staying close to the origin where zero effort meets zero progress towards finding a solution. To go from double zeros to Win-Win is nothing short of transformational to me. I came a long way to realize that most negotiations in life are integrative rather than distributive. Therefore, to negotiate effectively, one has to adopt a collaborative mind-set and rethink winning as a process of value-creation for all.

In this final reflection, I will share my learning experiences, highlighted with insights I have gained, and elaborate on how I will apply my knowledge and skills in real life.

Winning or losing?

Everyone negotiates to win, presumably. My experience from the first two negotiation classes tells me so. In a distributive negotiation, in particular, anchoring on the best outcome and work your way back toward Reservation Price (RP) by giving concessions from large to smaller ones makes a good negotiation strategy. However, this strategy doesn’t work so well in a multi-criteria negotiation where a mixture of distributive and complementary items needs to be negotiated.

Negotiators who focus narrowly on her highest value item(s) tend to overlook the possibility of finding value elsewhere to trade with its counterpart to improve the final outcome. To handle the mixed type of negotiation well, one needs to be aware of the danger of being too competitive and too concentrated on distributive items. Instead, they should consider other possibilities of creating values by asking a lot of questions and getting as much information as possible. In other words, having a ‘win-lose’ mentality does not always increase your chance to win. It could become a barrier for both sides from getting the best deal.

Mathematics could become another barrier for negotiators to identify the best outcome as the complexity of the deal increases. It is much easier computationally to operate under ‘win-lose’ mentality and simply divide a fixed sum, than solving for an optimization problem which include multiple objectives and mixed motives to find the Pareto Frontier.Therefore, leveraging technology to process information efficiently could be helpful in identifying better available outcomes in negotiations.

Avoiding or Competing?

I learned from early negotiation practice that I am a “soft negotiator” who tends to avoid conflicts by anchoring too close to my reservation price (RP) and accommodating too much to the needs of others while compromising my own interests just to reach an agreement.

My conflict management style also confirmed that I score high on “avoiding” and “accommodating” and low on “collaborating” behaviors. I was shocked to find out that this indicates I am not making enough effort in claiming or creating values in negotiation.

Knowing my barriers to win in negotiation has something to do with my avoiding style, I decided to change it in the next negotiation. It was a three-party negotiation among the top three market leaders, Neptune, Pluto and Venus. My role Venus had the least market power, which means without changing my strategy, I would have easily given up my shares just to accommodate other’s needs. I decided to act toughthis time. Soon as we sat down, I proactively opened the negotiation by putting hypothetical results on the table to convince Pluto that a ‘race-to-the-bottom’ strategy would eventually hurt both of us, therefore we should anchor on an even split among three of us. Pluto agreed with me but Neptune who had to give up a lot of her interests to reach an agreement had a hard time accepting this solution.

In the end, Pluto offered Venus 7 out of 12 to form a joint venture and penalized Neptune for being non-cooperative. Neptune on the other hand, walked away with frustration that Venus was unwilling to discuss any deals outside a 3-way joint venture because of its agreement with Pluto reached at the beginning.

This experience showed me how increasing assertiveness could improve negotiation outcome especially for those in disadvantageous situations (Venus). However, assertiveness doesn’t always work so well for those who are in an advantageous situation (Neptune), as it can be perceived negatively as being arrogant, disrespectful, aggressive, intimidating, and unfair to other negotiators. As a result, no deal was made between Neptune and Pluto which had made both of them worse off comparing to other available solutions.

Competing or Collaborating?

Reflecting on the outcome of No Deal between Neptune and Pluto, I would say that even though my competitive style has benefited me in this negotiation, it was ineffective in creating bigger value in the end. We had a small pie because of a lack of collaboration in the process. This outcome motivated me to look beyond competitive value-claiming behaviors and think more towards value-creation that makes everyone better off.

In the next two negotiations, I began to see my role in a new light. Instead of directing all my effort to be assertive about my own interests and competing with everybody else, I instead argued for the interests of others, and sought to understand other perspectives and facilitated a joint discovery of a Win-Win solution.

I was happy to see that in the final negotiation, in which six parties each holds a different set of values reached an agreement unanimously. It truly opened my eyes to see what I possible and how to make it happen.

Action Plan

Differences are often viewed as a source of conflicts. However, seeing them from the lens of a value-creating negotiator, they become opportunities to achieve better outcomes through mutually beneficial trade. To build on what I have learnt in class, I’m considering the following –

  1. Changing perspective: It might feel odd or extremely uncomfortable for some people to ‘walk in other’s shoes’ but taking 1 hour to do so each week might help us get to see what we may have missed from other’s perspective.
  2. Being proactive:Taking the initiative to start a conversation with someone; asking more questions instead of making assumptions; avoiding doing nothing is the first step towards win-win which is especially true for me.
  3. Tackling the problem head on:
    1. When encountering a problem, I should describe what have happened and how I have felt at the moment.
    2. Come back to it later to define what type of problem this was — is it distributive or integrative? One-issue or multi-issue, one-shot or repeated, zero-sum or possibly win-win?
    3. Once the problem is identified, I should then prepare a strategic analysis plan to prepare for a negotiation.
    4. I would probably remind myself to choose an appropriate negotiation style before starting a negotiation, knowing that it is probably going to benefit me more if I speak more assertively.
  4. Keeping track of progress: last but not the least, it is beneficial to write things down. As professor has said, if you don’t write it down, it doesn’t exist. Keeping track of the situation, strategies, and negotiation outcomes helps prevent hindsight bias, promotes learning through experiences and cultivates insight skills.

Closing remarks.

My class learning about negotiation, conflict resolution and value creation may have come to an end, but the insights and practical tools I have gained from Professor Ginzel and my negotiation classmates will be carried along with me for life.

Ph.D. in Economics with interests in Life Science, Behavioral Science, Health Economics Evaluation and Health Technology Assessment. Executive MBA student at The University of Chicago Booth School of Business in Hong Kong, graduating in 2020.

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