Either/Or: Leaving money on the table

Have you ever noticed that we have a marked tendency to view bargaining situations as a zero-sum game: What you gain is what I lose and vice-versa. We bargain over positions and hope that our position will dominate at the expense of the position facing us. Just think of divorce settlements, international negotiations (USA and former USSR, Israel and Palestinia), etc...

In their insightful book "Getting to Yes : Negotiating an Agreement without Giving In" (a good summary is here), Roger Fisher and William Ury have a nice way of reminding that we should avoid as much as we can falling into the either/or trap.

The story goes as follows: Two sisters quarrel over an orange. Each of the sister would like to get the full orange. After a painful position bargaining, they end up cutting the orange in two halves. The first sister takes her half, peels the orange, throws the peel away and eat her half. The second sister peels her half, throws the inside away and uses the peel in baking a cake. What a shame: Both have left money on the table! They only thought of dividing the orange, of fighting for the maximum share instead of inventing a new option for mutual gain. The option was obviously to tell each other what the purpose of the orange was before starting to negotiate over it.

Inventing options is indeed usually mutually profitable. As Fisher and Ury put it: " In a complex situation, creative inventing is an absolute necessity. In any negotiation it may open doors and produce a range of potential agreements satisfactory to each side. Therefore, generate many options before selecting among them. Invent first; decide later."

One example from the blogosphere that springs to mind is that of Loïc Le Meur when he sold the company he founded, Rapid Site France, to France Telecom. The full story is here. In a nutshell, Loïc was in a position where he could have sued France Telecom for advertising plagiarism. He did not choose that obvious route and took that unexpected opportunity to discuss business with the Wanadoo guys who ended up buying his firm! Too bad for the litigation lawyers but great for both Loïc and Wanadoo!

So next time you have something to negotiate, think out of the (positions) box and allow you and your partners more room for manoeuvre.

More on "business negotiating" in Cyberlibris:

50 Best (and Worst) Business Deals of All Time, Michael Craig, Career Press, 2000

Game, Set, Match: Winning the Negotiations Game, Henry S. Kramer, ALM, 2001

Only Negotiating Guide You'll Ever Need, Peter B. Stark, Broadway Books, 2003

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Comments

[Christine Jeannet]

Hi Eric,

Well just to illustrate your point, it looks like the music industry heard it too and is slowly doing the same, I mean thinking out of the "CDs". I refer you to a great report I read last week in the Economist, dated october 30th, looking at the music industry and showing how the majors have started to rethink their attitudes towards the "online" music industry. Instead of prosecuting and suing some of the file sharing networks out of existence, like they did with Napster, they are now looking at ways they could start selling their music titles alongside free content on some of those networks!