Decision Making

How To Create Mutually Beneficial Agreements During A Negotiation

A mutually beneficial agreement is all about creating and claiming value
A mutually beneficial
agreement is all about creating and claiming value
Image Credit: OECD
Organisation for Economic Co-operation and Development

It goes without saying that when we sit down at the negotiating
table, both sides have a different view of the world. We both want
something and in order to get what we want, the other side is going
to have to be willing to give something up. The fact that we all
have different preferences means that if we are not careful our
negotiations can grind to a halt. What we need to get good at is
using our negotiation styles and negotiating techniques
tofind ways to create mutually beneficial
during our negotiations that both sides will be
able to live with.

Creating A Mutually Beneficial Agreement

When multiple issues are being discussed in a negotiation and
both sides have different preferences across these issues, they may
be able to reach a mutually beneficial deal by making tradeoffs
based on what each side values most
. To reach
mutually beneficial agreements
, both sides have to work hard to
both create new sources of value through collaborative moves and
claim as much value as they can.

The tension between creating and claiming value is pivotal to
the process of business negotiation. If you share too little
information about your interests then you will have difficulty
identifying possible value thus creating trade offs. Share too
much, and the other side may use this as an opportunity to take
advantage of you. This brings us to the key question of how
can you reach mutually beneficial deals while minimizing the risk
of being exploited?

Take Time To Identify Issues and Interests

Too often, we approach a negotiation with a narrow mindset,
assuming we will be fighting with the other side to grab as much as
we can. Rather than looking for ways to expand the pie, we focus on
carving it up. Rather than capitalizing on our different
preferences, we accept impasses. By contrast, when parties can
trade on their preferences across different issues, they
reduce the need to haggle over prices and percentages

As part of your preparation for your next negotiation,
make a list of all the possible issues that may be at
. Then consider your interests and the other side’s
interests in each one. In addition to identifying tangible
interests, such as price and deadlines, don’t forget intangible
ones, such as building a long-term relationship or saving face in
the aftermath of a negotiating error.

Always Assess and Improve Your BATNA

During a negotiation we always need to determine the point at
which you would walk away from the current negotiation and accept
your best alternative to a negotiated agreement, or BATNA. Because
this allows you to reject a mediocre agreement, a strong
BATNA is typically your best source of power in a
. After identifying your BATNA, you will want
to take steps to improve it, when this is possible.

Before The Negotiation Starts Set Reservation Values and

Another key part of how you prepare for reaching a mutually
beneficial deal is to assess your reservation value, or
bottom line
—the least you will accept in the current
negotiation—and an ambitious yet realistic aspiration level, or
goal that you have.

Reservation values can be difficult to calculate, as when you
are weighing two job offers that vary on dimensions such as salary,
responsibility, and benefits. One way to deal with a situation like
this is to set up a scoring system—a grid that
allows you to assign point values to different options and make
comparisons across your various alternatives.

As for setting an aspiration level, always aspire to an
outcome that is better than your BATNA
. Prepare arguments
that will make your aspirations seem reasonable. Though you are
unlikely to get everything you asked for, you should be able to
anchor any haggling that follows around an ambitious yet realistic
aspiration level.

What All Of This Means For You

We don’t engage in negotiations if we think that we are not
going to be able to reach a deal with the other side of the table.
In order to make a deal happen, we often have to find ways
to make a mutually beneficial agreement happen
. These
agreements require both sides to be willing to bend a bit to reach
a deal.

In order to create a mutually beneficial agreement, both
sides are going to have to be willing to make trade offs
You will be spending your time both creating value and claiming
value throughout the principled negotiation. Take the time to study
all of the issues that will be part of the negotiation. These will
be the issues where you can make your trade offs. You’ll want to
remain aware of your BATNA so that you can get a better deal than
that affords you. Additionally, make sure that you know what your
bottom line is and what you’d really like to get out of the

We always want to be able to reach a deal with the other side.
What we need to understand is that in order to make this happen
there is going to have to be some give and take on the part
of both sides
. During a negotiation, our goal should be to
find a way to reach a mutually beneficial agreement with the other
side. Taking the time to prepare to reach this kind of agreement
before the negotiation starts is the key to making sure that we can
get there by the time that the negotiation ends.

– Dr. Jim Anderson
Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Do you think that it would be a good
ideal to determine what the other sides BATNA is before starting a

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What We’ll Be Talking About Next Time

So I’ve got a quick question for you: what’s the
goal of your next negotiation?
I’m pretty sure that
you’re going to tell me that you want to be able to reach a deal
with the other side. I’d say that not only do you want to reach a
deal with them, but you want to reach a deal with them that both
sides believe that they can live with. This is the essence of
win-win negotiation. I think that we can all agree that it’s
something that we’d all like to be able to do; however, the big
question is how can we use win-win negotiation styles and
negotiating techniques to get what we want?

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How To Create Mutually Beneficial Agreements During A
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