When it comes to negotiating a deal, we have all been taught to try and find a so-called "win-win" solution. But when you watch the best negotiators in action, they actually use a very different tactic. Their goal is to strike what you might call "lose-lose" deals.
Let me explain.
When most people approach a negotiation, our instinct is to start high, figuring we will end up settling for something lower. If we start an offer with 10 and someone counters with 2, we will eventually settle somewhere around 6, right?
But the best negotiators approach deal-making in a much more nuanced manner, which is why they're consistently able to strike complex deals that might have seemed impossible at the outset.
The first secret top negotiators employ is that they never start out a negotiation with a specific goal in mind. They don't lock themselves into any one position that will restrict them from striking a deal.
The second secret of negotiating is that you need to uncover the underlying issue of what the person on the other side of the deal is looking for. What do they need and why? The better understanding, they have of the issues and needs, the high the probability to find an area for a solution. The idea is to try and find what the other party really wants out of the deal while also identifying what you might not care as much about yourself, which are great places for compromise.
For example, I was recently involved in a deal where someone approached me about acquiring an organization I had an ownership stake in. I honestly wasn't interested in losing this organization, but rather than shut it down, I asked questions to help me understand why this other person wanted the organization. As it turned out, I learned that they really only wanted the name of the organization - a fact that completely reshaped our conversation.
The third secret to a successful negotiation is to find the best lose-lose scenario. What I mean by this is that it can be very difficult to find solutions where both parties in a negotiation "win." However, if you approach the deal with an eye on finding a solution where each party just "loses" a little, you can often find a healthy compromise that truly ends in a fair deal. After all, wouldn't both parties be happy getting 90% of what they wanted versus 0% if you couldn't strike the deal in the first place?
Let's return to my example. After I learned that the other party really wanted the name of my organization as opposed to the whole enchilada, it helped reframe how we could strike a deal. If I was OK with losing the name of the organization, and he was OK with not getting the rest of the organization's assets, we could strike a lose-lose deal together - which is exactly what we did.
So the next time you approach negotiating a tough deal, forget about finding a win-win solution. Aim for finding the best lose-lose scenario, and you'll greatly increase your chances for striking a successful deal.
Jim is a popular keynote speaker and the author of the best-selling book, "Great CEOs Are Lazy" - grab your copy to today on Amazon