Labor unions may be the most obvious example of negotiating coalitions. When a company negotiates with an employee individually, it could threaten to hire someone else in the face of the employee’s demands. By contrast, when employees bargain collectively through a union, they avoid the need to compete against one another (at least on certain issues) and typically achieve a more competitive compensation and benefits package than they would have negotiated on their own.
Coalitions and multiparty negotiations – what benefits you can gain from including others in your negotiation strategy
Back in 2006, representatives of wind-energy developers started knocking on the doors of Wyoming ranchers. They were seeking to persuade the ranchers to sell the rights to build wind turbines on their land, reporter Addie Goss recounted on National Public Radio. Typically, the developers build wind farms by leasing large blocks of land from many different landowners in western states. In Wyoming, ranchers began signing leases without knowing the true value of the wind sweeping across their land.
U.S. Department of Agriculture program coordinator Grant Stumbough heard about the wind developers crisscrossing Wyoming and had a brainstorm: by working together, the ranchers might be able to get better deals.
Wyoming wind associations and ranchers
Stumbough formed a “wind association” model in which ranchers and farmers pool as much as 100,000 acres of their land, negotiate leasing rights with wind developers as a group, and divide the profits. Eight wind associations now exist in Wyoming alone, and the model is catching on in other western states.
Rather than waiting passively for an offer from a single developer, wind associations market their land rights to dozens of companies, sometimes triggering bidding wars in the process. Royalties from a wind project could potentially generate hundreds of thousands of dollars annually for a rancher, Stumbough told NPR—a gold mine for those who are struggling to stay afloat in a depressed cattle market.
As some Wyoming ranchers have learned, you can sometimes gain leverage and improve your negotiation results by banding together in coalitions with other relatively weak parties.
Win-Win Negotiation Techniques – Leveraging Coalitions at the Bargaining Table
As a member of a coalition, you can harness the resources you need to face a tough opponent. In certain situations, negotiators are unqualified to bargain on their own behalf. Lawyers, agents, and other third parties can provide the expert negotiation guidance needed to prosper in situations as wide-ranging as a divorce settlement, a book sale, or a corporate merger.
A negotiating coalition takes the “Don’t go it alone” strategy a step further. Rather than (or in addition to) hiring one or more advisers to negotiate for you, a number of weak parties who might otherwise be in competition with one another join forces to negotiate in a collective, organized manner with one or more stronger parties.
Have you experienced the benefits of joining coalitions? Share your story with us in the comments.
Adapted from “Can’t Beat Them? Then Join a Coalition,” first published in the Negotiation newsletter, March 2009.
Originally published in 2011.