What is Effective Negotiation?
In the business world, organizations take competition for granted, but they often overlook effective negotiation strategies they can use to cooperate and achieve better outcomes.
We might hope that when we adopt effective negotiation strategies—such as spending lots of time preparing and asking questions at the table—we would achieve consistently strong results in our negotiations. Yet as most of us have experienced, our outcomes can vary a great deal from one negotiation to the next.
In part, this may be due to a lack of understanding on the benefits of effective negotiation with our competition. As proof of those benefits, in 2013, U.S. automakers Ford and General Motors announced they were teaming up to develop two new automatic transmissions (a nine-speed and a 10-speed) to help them comply with tightening fuel-economy regulations. The complex, high-tech parts are critical to vehicle performance, but they’re not part of a carmaker’s brand identity.
Working together to design the transmissions allowed the companies to share the high costs of developing the hardware without blurring their identities in the eyes of consumers. After designing the hardware, the companies split off to independently develop control software for the transmissions.
It’s worth pointing out, however, that effective negotiation doesn’t mean that some negotiations won’t still require hard bargaining. The cast of the TV sitcom, “Friends,” offers a prime example. At the height of program’s popularity they banded together to pull off an unprecedented salary negotiation, walking away with a $1 million each per episode for the final two seasons, which aired from 2002-2004.
In one instance, as negotiations went on without an agreement, the executives took an especially hard line against one cast member. In response, the entire cast walked out in the middle of filming an episode, costing the studio up front, showing them what the consequences of not reaching a deal would be in the long term.
To learn more about effective negotiation techniques, download your FREE copy of Getting the Deal Done, from the Program on Negotiation at Harvard Law School.
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