At San Jose State University, Professor Joyce Osland taught that negotiations don’t leave one party the winner and the other a loser. She has significant credibility because of the work she and her husband did as negotiation facilitators between companies and labor unions. Do you believe that the “pie” is larger than everyone thinks?
|Photo Credit: San Jose State University Joyce Osland|
I recall a vivid negotiation exercise, during my MBA program, that Dr. Osland led. It was challenge to balance the leverage a party might have in withholding information and the opportunities that might be won if one party divulged more.
To illustrate, our fictional scenario was two parties competing for business with the same client. We were pharmaceutical companies competing for the same resource. A fictional fruit was found to have disease treating properties. Both parties found a way to use the fruit to create an effective and money-making medicine. One party knew how to process the rind to make its product. The other party only needed the juice. Both parties are blind to this. What if they assumed their competitor needed the whole fruit? How would negotiations begin?
|Photo Credit: Creative Commons Pizza Pie|
A: Hi, Tatiana. I understand that you are going after the contract with Z. It looks like we are after the same client and the same fruit for our product.
B: Yes, Renee. That’s true and you know I’ll win.
A: I think the two big winners will be the patients that use the medicine made and the partnership that makes the most money. Do you follow me?
B: Why should I partner with you?
A: Well, I have business relationships with the main agricultural giant who runs the orchards with this fruit but the cost of transporting the fruit back to my facility to process is cost-prohibitive.
|Photo Credit: Creative Commons Competing Woman|
B: So? Why should I help my rival?
A: We are both after the same crop, right?
B: Yeah. And the crop only grows once in 10 years so I’m not going to help you.
A: Whoa. Slow down. Hear me out. I’m not asking for favors. I’m proposing something that will benefit you.
B: Go on.
A: What is your biggest challenge? I let you know mine about transportation.
B: It’s not a secret. It’s been in the press. That we excel in on-site mobile processing. This means we have technicians that can process in the orchard. Our weakness..again, you know we are newbies to the market so we don’t have that many relationships with agriculture yet.
A: How about this? Clearly you need my contact and I could benefit from your mobile processing. What are you proposing?
B: If you and I approach your contact together and split the crop, I can assist in processing some of your fruit for you. I’ve got to run this idea by the team so no promises. We are just talking ideas right now.
A: I also have an advantage that I don’t need the whole fruit. I only want the rind. Can your mobile processor rip the rinds and give it to my team? That way you can have more of the fruit.
B: Actually, I only need the juice. The rind and the pith would cost me dumping fees.
|Photo Credit: Creative Commons Citrus Orchard|
A: My team is interested in buying the rind from you. This would save you dumping fees. I can’t help you with the pith though.
B: Though our team has the mobile processing technology to juice the fruit, we didn’t have a willing supplier. Through you, we an have a contact. It sounds like a win-win. Our company was anticipating that even if we landed a willing orchard we’d pay out the a– for dumping. This can reduce the bulk of what we must discard. Ok. Let me get back to you in 24 hours for this partnership in writing.
A: It’s a deal.
There may not be miracle fruit to cure a specific, modern disease. However, the principle of recognizing that the “pie” is larger than both parties think is a concept that can be applied in almost any negotiation. Dr. Osland recommends reading articles or watching videos by Author Daniel Goleman for training on social intelligence and business leadership. This relies on the wisdom of the negotiating parties, what to ask and what to divulge.