Question

Look for mutual gain

The third major block to creative problem-solving lies in the assumption of a fixed pie: the less for you, the more for me. Rarely if ever is this assumption true. First of all, both sides can always be worse off than they are now. Chess looks like a zero-sum game; if one loses, the other wins — until a dog trots by and knocks over the table, spills the beer, and leaves you both worse off than before.

Even apart from a shared interest in averting joint loss, there almost always exists the possibility of joint gain. This may take the form of developing a mutually advantageous re- lationship, or of satisfying the interests of each side with a creative solution.

Identify shared interests. In theory it is obvious that shared interests help produce agreement. By definition, inventing an idea which meets shared interests is good for you and good for them. In practice, however, the picture seems less clear. In the middle of a negotiation over price, shared interests may not appear obvious or relevant. How then can looking for shared interests help?

Let's take an example. Suppose you are the manager of an oil refinery. Call it Townsend Oil. The mayor of Pageville, the city where the refinery is located, has told you he wants to raise the taxes Townsend Oil pays to Pageville from one million dollars a year to two million. You have told him that you think one million a year is quite sufficient. The negotiation stands there: he wants more, you want to pay what you have been paying. In this negotiation, a typical one in many ways, where do shared interests come into play?

Let's take a closer look at what the mayor wants. He wants money — money undoubtedly to pay for city services, a new civic center, perhaps, and to relieve the ordinary taxpayers. But the city cannot obtain all the money it needs for now and for the future just from Townsend Oil They will look for money from the petrochemical plant across the street, for example, and, for the future, from new businesses and from the expansion of existing businesses. The mayor, a businessman himself, would also like to encourage industrial expansion and attract new businesses that will provide new jobs and strengthen Pageville's economy.

What are your company's interests? Given the rapid changes in the technology of refining oil, and the antiquated condition of your refinery, you are presently considering a major refur- bishment and expansion of the plant. You are concerned that the city may later increase its assessment of the value of the expanded refinery, thus making taxes even higher. Consider also that you have been encouraging a plastics plant to locate itself nearby to make convenient use of your product. Naturally, you worry that the plastics plant will have second thoughts once they see the city increasing taxes.

The shared interests between the mayor and you now become more apparent. You both agree on the goals of fostering industrial expansion and encouraging new industries. If you did some inventing to meet these shared goals, you might come up with several ideas: a tax holiday of seven years for new industries, a joint publicity campaign with the Chamber of Commerce to attract new companies, a reduction in taxes for existing industries that choose to expand. Such ideas might save you money while filling the city's coffers. If on the other hand the negotiation soured the relationship between company and town, both would lose. You might cut back on your corporate contributions to city charities and school athletics. The city might become unreasonably tough on enforcing the building code and other ordinances. Your personal relationship with the city's political and business leaders might grow unpleasant. The relationship between the sides, often taken for granted and overlooked, frequently outweighs in importance the outcome of any particular issue.

   As a negotiator, you will almost always want to look for solutions that will leave the other side satisfied as well. If the customer feels cheated in a purchase, the store owner has also failed; he may lose a customer and his reputation may suffer. An outcome in which the other side gets absolutely nothing is worse for you than one which leaves them mollified. In almost every case, your satisfaction depends to a degree on making the other side sufficiently content with an agreement to want to live up to it.

Three points about shared interests are worth remembering. First, shared interests lie latent in every negotiation. They may not be immediately obvious. Ask yourself: Do we have a shared interest in preserving our relationship? What opportunities lie ahead for cooperation and mutual benefit? What costs would we bear if negotiations broke off? Are there common principles, like a fair price, that we both can respect?

Second, shared interests are opportunities, not godsends. To be of use, you need to make something out of them. It helps to make a shared interest explicit and to formulate it as a shared goal. In other words, make it concrete and future oriented. As manager of Townsend Oil, for example, you could set a joint goal with the mayor of bringing five new industries into Pageville within three years. The tax holiday for new industries would then represent not a concession by the mayor to you but an action in pursuit of your shared goal.

   Third, stressing your shared interests can make the negotiation smoother and more amicable. Passengers in a lifeboat afloat in the middle of the ocean with limited rations will subordinate their differences over food in pursuit of their shared interest in getting to shore.

   Dovetail differing interests. Consider once again the two sisters quarreling over an orange. Each sister wanted the orange, so they split it, failing to realize that one wanted only the fruit to eat and the other only the peel for baking. In this case as in many others, a satisfactory agreement is made possible because each side wants different things. This is genuinely startling if you think about it. People generally assume that differences between two parties create the problem. Yet differences can also lead to a solution.

Agreement is often based on disagreement. It is as absurd to think, for example, that you should always begin by reaching agreement on the facts as it is for a buyer of stock to try to convince the seller that the stock is likely to go up. If they did agree that the stock would go up, the seller would probably not sell. What makes a deal likely is that the buyer believes the price will go up and the seller believes it will go down. The difference in belief provides the basis for a deal.

Many creative agreements reflect this principle of reaching agreement through differences. Differences in interests and belief make it possible for an item to be high benefit to you, yet low cost to the other side. Consider the nursery rhyme:

Jack Sprat could eat no fat

His wife could eat no lean,

And so betwixt them both

They licked the platter clean.

The kinds of differences that best lend themselves to dovetailing are differences in interests, in beliefs, in the value placed on time, in forecasts, and in aversion to risk.
Any difference in interests? The following brief checklist suggests common variations in interest to look for:

ONE PARTY
CARES MORE ABOUT:

form
economic considerations

internal considerations

symbolic considerations i

mmediate future
ad hoc results
hardware
progress
precedent
prestige, reputation political points

THE OTHER PARTY CARES MORE ABOUT:

substance
political considerations

external considerations

practical considerations

more distant future
the relationship

ideology
respect for tradition

this case
results
group welfare

   Different beliefs? If I believe I'm right, and you believe you're right, we can take advantage of this difference in beliefs. We may both agree to have an impartial arbitrator settle the issue, each confident of victory. If two factions of the union leadership cannot agree on a certain wage proposal, they can agree to submit the issue to a membership vote.

Different values placed on time? You may care more about the present while the other side cares more about the future.

   In the language of business, you discount future value at different rates. An installment plan works on this principle. The buyer is willing to pay a higher price for the car if he can pay later; the seller is willing to accept payment later if he gets a higher price.

Different forecasts? In a salary negotiation between an aging baseball star and a major league baseball team, the player may expect to win a lot of games while the team owner has the opposite expectation. Taking advantage of these different expectations, they can both agree on a base salary of $100,000 plus $50,000 if the player pitches so well that on the average he permits less than three earned runs per game.

Differences in aversion to risk? One last kind of difference which you may capitalize on is aversion to risk. Take, for example, the issue of deep-seabed mining in the Law of the Sea negotiations. How much should the mining companies pay the international community for the privilege of mining? The mining companies care more about avoiding big losses than they do about making big gains. For them deep-seabed mining is a major investment. They want to reduce the risk. The international community, on the other hand, is concerned with revenue. If some company is going to make a lot of money out of "the common heritage of mankind," the rest of the world wants a generous share.

In this difference lies the potential for a bargain advantageous to both sides. Risk can be traded for revenue. Exploiting this difference in aversion to risk, the proposed treaty provides for charging the companies low rates until they recover their investment — in other words, while their risk is high — and much higher rates thereafter, when their risk is low.

Ask for their preferences. One way to dovetail interests is to invent several options all equally acceptable to you and ask the other side which one they prefer. You want to know what is preferable, not necessarily what is acceptable. You can then take that option, work with it some more, and again present two or more variants, asking which one they prefer. In this way, without anyone's making a decision, you can improve a plan until you can find no more joint gains. For example, the agent for the baseball star might ask the team owner: "What meets your interests better, a salary of $175,000 a year for four years, or $200,000 a year for three years? The latter? OK, how about between that and $180,000 a year for three years with a $50,000 bonus in each year if Luis pitches better than a 3.00 ERA?"

If dovetailing had to be summed up in one sentence, it would be: Look for items that are of low cost to you and high benefit to them, and vice versa. Differences in interests, priorities, beliefs, forecasts, and attitudes toward risk all make dovetailing possible. A negotiator's motto could be "Vive la difference!"

According to the authors of Getting to Yes, to invent creative options, you will need

(1) to separate the act of inventing options from the act of judging them;

(2) to broaden the options on the table rather than look for a single answer;

(3) to search for mutual gains; and

(4) to invent ways of making their decisions easy.

To apply the above prescriptions, how shall we “search for mutual gains” in our scenario-An IT Job for IBS? (50-100 words).

IBS is negotiating with a IT company for a potential contract for repairing the school's failed computer network. After a fair amount of negotiation, however, the parties find themselves at an impasse: the company's bid-- 200,000 RMB (which the company feels is very low) is considerably higher than the school's budget for this project (100,000 RMB).

You are one of the negotiators representing IBS. You know that the company's qualifications are perfect for the school's needs. Although this is the first time for the company to work with a public university, it seems very interested in getting more governmental and educational clients in the future.

Now, the company and the school have agreed to meet one last time in an effort to salvage the deal. How would you prepare for this negotiation?

Answer 1

Search for mutual gains ( An IT job for IBS):

Few points are to be considered while established the mutual gains for both parties:

1. Economic parameters may be an indicator to decide the mutual benefit for both the parties.

2. Future progress of the job at IBS after recruitment. Whether both the parties are at WIN-WIN situation or not?

3. Taking an assignment from IBS is a prestigious issue or not?

4. Whether IBS is a reputed company or not? So that both reputation and prestige will apply to both parties.

5. Whether IBS has group welfare scheme for its employee or not? Based on that the mutual benefits will be established.

As an official negotiator representing IBS, I think I will prepare a concrete negotiation plan for the school which will continue for a long time and both the parties will be beneficial from the deal. So as a negotiator I will find out an amicable solution for both the party, where they will be satisfied.

1. My first observation will be what are the sufficient content of both parties so that opportunity and mutual benefits for both the parties.

2. As IBS official price for the bidding is higher than the school's official budget, hence what mutual final cost will be given to the school ao that the negotiation will not break off. Will try to fit a fair price which will be accepted to both parties and they will respect the deal.

3. Will try to make the negotiation in a smooth manner so that no party will feel deprived.

4. If any disagreement comes of either end, then try to solve the same believing in the business ideology "SOMETIME AGREEMENT IS OFTEN BASED ON DISAGREEMENT.

5. While negotiating will keep the core business interest, belief, values of both the parties so that the final conclusion can be drawn easily.

6. I can easily settle the negotiation with a time-bound period if both the parties have their own business ideology to understand each other various issues in terms of business point of view and respect each other business tradition.

7. Will close the deal by offering a competitive price for installing computer service in the school and also expect to get a few good references where IBM can offer the same service with their official price and beg the same to compensate the low price quotation for the school.