For decades, people have been talking about win-win negotiations, but this type of positive outcome has not always occurred in reality. Often, negotiations still involve an antagonistic approach, where one party has to lose in order for the other to win. A 2013 survey of market shows some encouraging news. It seems that more businesses are finally realizing that a positive, collaborative approach can yield better long term outcomes.
A shift towards a collaborative approach
More are more business executives are pursuing a collaborative, partnership-based approach to relationships with suppliers. This is a change from the older, aggressive approach where business people tried to drive the hardest possible deal, usually at the other party’s expense. Though there have been negotiators who took a win-win approach before, they were typically the exception, not the norm.
Old-style negotiations relied heavily on defensive, compliance-based contracts that featured negative incentives for non-performance. These contracts were designed to reduce risk for the buyer, and transfer that risk to the supplier. Today’s contracts are more balanced, and include positive incentives, shared responsibilities, and shared benefits. Businesses today recognize the need for innovation, flexibility and continuous improvement, and these are increasingly allowed for in contract negotiations.
The role of negotiators is beginning to change. Talented negotiators now are not just skilled in gaining an advantage over the other side. Now communication and facilitation skills are coming to the forefront and negotiators seek to build consensus with the other side, rather than just scoring points. They work on creating an environment of trust between business partners, where both sides can pursue shared objectives.
Reasons for the shifting style of negotiation
One of the reasons for this shift is that more negotiators are looking at the overall outcome and business bottom line, rather than just the parameters of an individual deal. With pressure to show profits and growth, they are realizing that developing relationships and partnerships can be more effective than maximizing the profits of each deal on its own. The success of a deal is no longer judged in isolation, when the contract is signed. Instead, a longer-term view recognizes the value of sustained relationships.
Another shift is that the buyer in a negotiation no longer always has the greater power. In some industries, such as mining, utilities, automotive, or oil and gas, the suppliers can have the upper hand. Shortages in supply, technology, and skilled labor can shift the balance of power. If the buyers want to be seen as a favored customer, then they need to take a different approach to negotiations.
A third factor that is driving this change is that contracts are more complex than ever before. No longer are cost, quality and time the only factors, as in the traditional view of a negotiation. Today, there are also concerns with sustainability, regulatory compliance, and reputation risk. There are many different stakeholders to consider, and agreements can be complex and difficult to arrange. Developing an on-going relationship with valued business partners can be more effective than handling each deal as a one-off negotiation.
Win-win negotiations – your ticket to success
Believe it or not, win-win negotiations come with a wealth of benefits. First of all, all parties involved are more relaxed when entering a meeting whose purpose is to reach mutual ground. However, just because the parties involved want to collaborate and create a relationship, this doesn’t mean they will agree to any offer. Mutual relations are excellent in business, as long as they can bring valuable benefits to all the parties involved in the negotiation.
Win-win negotiations can bring a lot of benefits to your business. Companies that want to make a name for themselves and get recognized should compromise more to reap benefits in the long term. Take all the time you need to make a decision, counter offer if you’re not feeling comfortable with a first offer, and be ready to argument your claims. Not every business individual is a skilled negotiator; yet, you can always opt for negotiation training sessions to perfect your abilities and master the techniques. Stick to your guns no matter what, maintain a professional attitude, and you will have great chances of reaching a mutual agreement with your opponents.