In today’s business world, the best negotiators are those who strive to reach win-win outcomes. This is important because it encourages better long-term business relationships and partnerships. Companies that seek to help one another maintain positive relationships and conduct future transactions that are mutually beneficial. As a result, the best negotiators are looking for ways to create value by focusing on the needs and wants of both parties.
Position-Based Negotiations vs. Interest-Based Negotiations
There are two types of negotiations: position-based and interest-based. Position-based negotiations are generally non-negotiable statements about what a person or organization wants without providing insight into underlying motivations or values. On the other hand, interest-based negotiations include a party’s underlying reasons, values and motivations. Focusing solely on positions can lead to underlying needs and interests going unnoticed, which makes a win-win outcome very difficult to achieve. It is far more conducive for negotiators to focus on each party’s interests if they want to reach a win-win outcome.
Working Towards a Win-Win
In an interest-based negotiation, the intent is to reach a mutually beneficial outcome that satisfies the needs of both parties. In other words, the interests of both parties are being met. This is a highly effective negotiation strategy because it strengthens the relationship between the two parties. When the focus is on the interests, both parties can work interdependently to reach a common goal or objective. Not only does this result in a mutually beneficial outcome, but it creates a foundation for future negotiations that is built on trust and credibility.
How to Focus on Interests
Interest-based negotiations are highly dependent upon communication and active listening. It is important for each party to communicate their needs and wants clearly, but also to listen carefully to the interests of the other party. This requires a sincere dialogue, an openness to discuss different perspectives, and the exploration of possible solutions. During this information exchange, both parties need to listen for ways in which their goals and interests align. They can use this information for opportunities to create valuable solutions. In the negotiations you want to look for solutions that are low cost to you but high value to the other side or high value to you but low cost to the other side. The goal is for both parties to reach an agreement that is legitimate, fair, and mutually beneficial.