What is Value Creation in Negotiation?
Value creation in negotiation helps both parties get what they want.
People often view negotiation as win-lose, but maintaining a win-win mindset and adding issues to the discussion are the keys to value creation and working out a great deal.
Value creation allows parties to integrate various sources of value through tradeoffs and other creative dealmaking strategies. Even in a negotiation over a used car, for example, you might be able to look beyond price to identify other issues to add to the discussion.
Value-creating opportunities can be uncovered by searching for a common interest, rather than letting the differences that exist between you dominate the discussion. Other promising value-creation strategies include asking lots of questions to learn about what matters to your counterpart and sharing information about your own interests and priorities.
The goal of this cooperative problem-solving in a negotiation is to uncover joint gains for both parties. Value creation is an aspect of win-win negotiations in which both parties benefit from the agreement.
Remember, though, taking a collaborative approach to negotiation doesn’t negate the importance of claiming a fair share of the value you’ve jointly created. Effective value claiming should be based on a thorough analysis of what you want out of the negotiation as well as what the other party wants.
In sum, remember that situations that appear to be zero-sum rarely are.
The key to value creation?
Bringing a degree of optimism about the chances of expanding the pie to every negotiation.
Find out more about value creation and discover how to handle complicated, high-level negotiations in this free special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from Harvard Law School.
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