mutually beneficial agreement
What is a Mutually Beneficial Agreement?
Some negotiation experts would have you believe that a mutually beneficial agreement is one in which each side grabs as much as it can from a finite pot of resources and calls it a day.
This is far from the truth. Negotiators often fail to reach a mutually beneficial agreement when they bring this kind of win-lose mindset to the negotiation table. Rather than working together to increase the size of the overall pie, negotiators end up haggling over a small pie, reducing the chance of achieving win-win negotiation.
This assumption of a fixed pie triggers competitive behavior that bypasses opportunities for collaboration and leaves parties entrenched in an impasse.
To reach a mutually beneficial agreement, negotiators have to work hard to both create new sources of value through collaborative moves and claim as much value as they can.
To create value, you need to learn about the other party’s interests and preferences, through building trust and sharing information and asking questions. Lastly, make multiple equivalent simultaneous offers.
Business negotiators tend to present one offer at a time. If the offer is rejected, they learn very little new information that would help them to move forward. A better approach is to craft three offers that are different across issues but equally appealing to you. The other party may reject all three of the offers, but is likely to communicate which one she likes best—and put you back on a track toward a mutually beneficial agreement.
When parties can trade on their preferences across different issues, they reduce the need to haggle over price and percentages.
To learn more about mutually beneficial agreements and become a better dealmaker and leader, download our FREE special report,Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.
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