We negotiate because we want certain tangible interests satisfied. We may also need to talk through past events, or build a stronger working relationship.
Additionally, there is another type of benefit to negotiation that can be a potential goldmine. It is the possibility of creating value that is not evident before negotiators meet. Creating value is more than satisfying interests. It is finding potential beyond what might have brought you to the table in the first place. Leaving hidden value at the negotiation table is one of the biggest errors made by inexperienced negotiators.
Here are three different ways of creating value in negotiation:
1) Through an additive process that builds a new whole
Negotiators may build value because each is able to supply elements that build a whole in an unexpected manner. For example, product development capability brought together with marketing expertise may form the basis of a joint venture not possible for either party on his or her own. The parties may know beforehand that they need each other, but the partnership formed at negotiation may begin to unlock an expanded potential than neither had imagined beforehand.
Knowing about the possibility of hidden value leads one to look for it. Knowing about hidden value may give one hope when mired in conflict.
2) By problem-solving
Two heads are better than one: collective intelligence, creativity, and imagination solve problems.
Problem-solving may occur through congenial communication. It may also occur through heated interaction or impasse where the differences in conflict give rise to innovative ideas. Metaphorically, the fire of conflict creates ashes out of which a phoenix can arise.
3) In re-combining differences
Differences are foundational to conflict, yet they also allow negotiators to benefit from each other. One wants to sell, the other wants to buy. One wants a valuable product, the other wants reputation. One wants to appear victorious, the other wants prosperity.
It is easy to lose sight of the fact that what leads to conflict may also lead to creating value. We have to explore differences to uncover their full potential.
For example, negotiators may each have a greater preference for something the other has. By trading, they both gain. Using a simple example, you have holidays scheduled over Christmas, but you don’t actually care when you take them. Mine are in July, but I want them over Christmas. At the same time, my parking spot is close to the building, but I don’t mind a walk across the lot. You would like your spot to be close to the building.
When we trade parking spots and holiday times, we both are better off than before. The ability to make that trade is based on knowing differences. Gains in value can be made out of differences in time preference, risk aversion, possessions, capabilities, access to resources, interests, forecasts, and so on.
Always take some time to explore the possibility of creating value that may not be readily apparent. Being motivated only to satisfy the interests that you have before you meet can limit the potential of a negotiation.