Big Pie Wins

Whether it is for a contract, salary, or valuation, the negotiation process is a critical part of the business world. And nothing seems to invoke our primal competitive urges like a good old fashion barter. We may talk at length about the need for win-win solutions, but far too often urge to ‘better the other guy’ overcomes us and transforms the actual process into a win-lose proposition. That may be fine when you don’t need the ‘loser’ in the future, but when its a supplier, employee, or some other stakeholder whose ongoing support you need, your big win is more likely a pyrrhic victory.

Fighting for a “bigger” slice of pie does not make sense when the cost is a smaller overall pie. Certainly, the rationing of an opportunity’s value has to take in account who brings what to the table. That’s only fair and is what negotiation is all about. But ‘fair’ is not the only variable that matters. Success in business requires alignment of interests across a broad group of suppliers, employees, investors, and other stakeholders. You need them all motivated toward the same end (i.e., making a really big pie), and you simply will not achieve that if the reward (i.e., their slice) is not big enough to be motivating. If you reduce a critical team member’s motivation, you reduce the odds of your own success.

A win-win solution is one where all parties get meaningful (by their definition, not yours) value of out a relationship or transaction. Furthermore, a sustainable win-win solution is one where the value of the relationship continues to be better than new alternatives that will come along. For example, you may be able to command a great deal from a vendor that is having trouble but don’t expect to be at the top of their priority list when their situation improves. In my experience, the relationship you establish with your style of negotiation can have an even greater long-term impact than the specific terms of today’s deal. The key is to balance your desire for a big-slice win today with your need for big pie wins tomorrow.

Ty J. Shattuck
The Idea Whisperer
@tyshattuck