to win at all costs, so do they. Both sides attack, both sustain casualties. Neither side gives in, neither side gets what they want.
Negotiating a Phone Call
Imagine your car has broken down. You need to make a phone call for help and you have no cell phone. In the distance, you see a phone booth. You run to the booth but see there's a gentleman talking on the phone. How do you negotiate the man out of the booth? Do you wait patiently? Do you tap on the glass? How long is long enough to wait? Do you reach in and drag the man out?
Okay, change the facts. You had a car accident and your friend is near death in the passenger seat. You have to call 911. Now how do you negotiate? Do you wait patiently? Bang on the door? Throw the man out?
Change the facts again. You still have to call 911, but the man in the booth is Hannibal the Cannibal Lecter from Silence of the Lambs. Do you ask politely? Do you try to throw him out? Do you invite him to have dinner with your friend? Do you run for your life? As situations change, negotiation strategies must change. Negotiation isn't a science – there's no laboratory-proven answer. And negotiation isn't war – you don't attack Hannibal the Cannibal. Negotiation is a human interaction; it must be adapted and modified to fit the situation.
I Win–You Lose Becomes We Lose
Remember, if one party destroys the other, there's no one left to carry out the agreement. (Exacting exorbitant rents, punitive penalty clauses, or unrealistic noncompete terms often defeat their own purposes by creating disincentives; in other words, deals that are so good, they're bad.) The negotiation doesn't end when the contract is signed. If the other side is crippled by the deal, they will have every incentive to break the terms, literally having nothing to lose. You just made your first and last deal, instead of the first of many in a long-lasting relationship.
Nothing proves the point like history.
The Last Day of World War I was the First Day of World War II
It was 1919 and the Allies had defeated Germany. The story goes that the Allied representatives sat the vanquished German leaders down in a railroad car outside of Compiegne, France, to dictate the settlement that would eventually become the Treaty of Versailles. “Dictate” was the appropriate word. President Wilson had warned the Germans that the terms of armistice would be harsh – and they were.
German troops had to withdraw to a line six miles east of the Rhine River. Allied troops would occupy the evacuated territory. The German naval fleet was surrendered. Virtually all military supplies were given up to the Allies, including 5,000 cannon, 25,000 machine guns, 5,000 locomotives, and 150,000 railroad cars.
But the toughest demands were political and economic. Germany was ordered to pay huge reparations to the Allies in the form of cash and the removal of German assets and capital goods. France, which had been devastated by the German forces, regained Alsace-Lorraine and took over several German colonies. France was also given a 15-year lease on the Saar coal mines which, along with Lorraine, provided coal, iron, and potash to the development of heavy industry.
With a crippled postwar economy, it was soon clear that Germany could not sustain the burden of the payments. In 1923, the Dawes Plan was conceived to create a payment plan that Germany could meet. As a result of German reparation defaults, Belgium and France occupied the Ruhr district. By 1928, with Germany further behind, the Young Plan was a second effort to collect payments. Again, Germany was unable to pay. President Hoover called for a moratorium on reparations (and the United States forgave all debts from other Allied countries that were going to be repaid with monies they were to have received from Germany).
The Allies had won, Germany had lost. It was a classic I Win–You Lose negotiation. The Allies got to set all the terms. But the terms were unrealistic. They made a deal that could not be carried out. Instead of creating peace, they created further resentment. The loss of the Ruhr, the devastation of the German economy, the sacrifice of natural resources, all contributed to a latent, seething desire for revenge. Many historians feel that it was the ideal atmosphere for the rise of Adolph Hitler.
The deal that ended World War I, in effect, helped start World War II. In fact, when the Nazis invaded France, Hitler ordered that same railroad car, then housed in a museum, be the site where he would “dictate” the terms of the German occupation of France. I Win–You Lose became We Lose.
I Win–You Lose and its negative consequences seem obvious when the stakes are high and you have the historical benefit of hindsight. But the principle applies to even the simplest deal. In our seminars, we often begin with this game. You can try it yourself.
The $10 Game
Take 10 one-dollar bills. Find two people – two partners, husband and wife, people in your office, your kids. Tell them, “If you two can negotiate a deal in 30 seconds on how to divide the $10 between you, you can have the money. But there are three rules:
1. You can't split it, $5 and $5.
2. You can't say $7 and $3 or $6 and $4 and make a side deal to adjust the division later.
3. If you don't make a deal in 30 seconds, I take all $10 back.”
Chances are, both parties will have a hard time resisting the urge to “win” and not “lose.”
You'll hear the hard sell:
It's better for one of us to get it than neither of us so let's make it me.
I agree: As long as the one is me.
The soft sell:
Oh, gosh, whatever you think is fair.
Golly, how about $7 for me and, say, $3 for you?
No way!
The sympathy ploy:
I need the $10. I just ran out of gas.
At least you have a car.
The so-called logic ploy:
We've only got 30 seconds so you take $4, I'll take $6, and we'll both come out ahead.
Yeah, but you're more ahead.
The trust-me ploy:
Give me all $10 and I'll make it up to you later. Trust me.
I've got a better idea. Give it all to me, and you trust me.
BZZZZ! Time's up!
Not only is it likely you'll keep your $10 with this game, but you can learn a lot about why negotiations don't work:
● When you have no preparation time, you don't think; you react.
● When you have time pressure and no preparation time, you revert to habits – usually bad ones. (When someone else is watching and judging your negotiations, it just adds to the pressure.)
● Most people revert to the habit of I Win–You Lose. Each one wants to win so much, is so convinced one can win only if the other loses, that they both lose.
● Sometimes I Win–You Lose turns to I Lose–You Win. “I'll
