When win-win negotiation = win-lose negotiation

Many have commented on the risks managers face by not assuming a win-win approach in negotiation—and I am one. Obstinately reject all your employees’ requests, suppliers’ inquiries, and peers’ pleas for help, and you’ll quickly find yourself on the other side of a pink slip.

But, as my friend Georg Berkel is discussing in his upcoming book on learning to negotiate, pursuing a win-win with one party can often carry a less appreciated risk of its own: creating a win-lose for someone else. Since understanding the second risk is just as critical for making management negotiable, let’s unpack this cryptic possibility.

Consider the following examples: Managers sometimes receive requests from employees hoping to be exempted from an organizational policy. Or inquiries from suppliers hoping for preferential treatment in an RFP. Or pleas from peers trying to redirect resources toward their pet projects. What’s interesting about these situations is this: A simplistic reading of the voluminous writing on win-win negotiation would essentially encourage the manager to get creative in accommodating such requests. At least when it fulfills their own managerial interests in winning friends and allies, go ahead and waive the policy, wink at the preferred supplier, speak out in favor of the pet project.

But here’s what’s even more interesting: Do each of those things, thereby securing a win-win with the requestor, and the manager is bound to create a win-lose for someone else. What about the other employees who still have to follow the policy (and thus face greater constraints)? Or the other suppliers who don’t get preferential treatment (and thus have a lesser chance of winning the deal despite a potentially better product)? Or the colleagues in other departments who find their funding cut to accommodate the peer’s expensive project (and may thus underperform)? In each case, pursuing a win-win with a requestor present at the table tends to create a win-lose for someone absent from the table. And that win-lose will likely become a lose-lose when the victim retaliates.

So what’s a poor manager to do—pursue a win-win or avoid it? I would forget this false dichotomy and instead suggest the following:

  1. Try to identify anyone markedly impacted by a prospective deal but absent from the table
  2. If appropriate and feasible, invite them to the table
  3. If not, at least try to anticipate what they would say if they were there
  4. And, better yet, incorporate whatever it is into the deal
  5. Ultimately, stand up for the win-win of the collective and not just the win-win of a cozy dyadic relationship

And so, in contrast to an overly simplistic reading of the voluminous writing on negotiation, win-win is not always an unalloyed good. Perhaps it is for the parties present, but not necessarily for the parties absent (and, for many organizational decisions, many are absent). But hopefully a mere awareness of their phantom presence can nudge the manager toward a win-win for the broader collective.

The hidden benefits of trust

Managers among us, wouldn’t it be great if the people we manage were happier and more motivated in 2016? Wouldn’t that immediately make life more negotiable?

Well, here’s a deceptively simple path to a better 2016: trust your employees a little more than you were planning to. “Yeah yeah,” you say. “I’ve heard that before, I’ve read Good to Great, sounds like more business school gobbledygook. Look what happened the last time I trusted too much—disaster!”

And you’re absolutely right…about the risks of trusting too much. But what you won’t find in Good to Great, and what most of us completely miss is the hidden benefit of extending a bit more trust: It becomes a self-fulfilling prophecy.

Picture the following: You’ve managed Jane for the last three years. She’s proven herself reasonably competent at her straightforward clerical tasks, but she hasn’t shown any particular penchant for assuming more responsibility. Then again, you’ve haven’t stretched her too much, ever concerned about the quality of the product. And yet, with the new year upon us and Jane looking distinctly unmotivated for another year of admin, it’s time for a change. What kind?

Well, imagine you decided to trust a bit more. Specifically, you thought to yourself: “Self, although I wasn’t planning to entrust Jane with anything new, she’s been trustworthy enough with the work I’ve already given her.” And so you told Jane: “Jane, you’ve been doing a great job, and I’d like to help you grow. So you know that important project I was planning to lead? I’ll be here to support you, but I want you to take the wheel instead.”

Now, how will Jane respond? With panic, perhaps, never having seen the wheel before. But after the shock subsides, and as she sees you continuing to support her, what will Jane do? Well, no guarantees, but many Janes will eventually react by thinking, “Gee, it seems like my boss is trusting me with something big here. I guess I better step up my game.” And step up she would, arriving earlier, working harder, asking tougher questions, giving better answers, and showing a notable reduction in the hourly need to visit www.dailymail.co.uk. In short, many Janes would react to your trust by trying harder.

Now you probably have heard that before, and you probably could find that somewhere in the golden pages of Good to Great, but here’s the part that most of us miss: How would you react to Jane? Seeing her immediate improvement, what would you think about her? Chances are, you’d look at her performance and think: “Gee, I guess I was right—she’s trustworthy.”

Now, stop and process what happened here: you assumed she was trustworthy enough to entrust her with something big. Perceiving your trust, she stepped up her game. Perceiving her game, you realized she was trustworthy. In sum, you made her look trustworthy by assuming that she was. It became a self-fulfilling prophecy.

Now, I’m not naïve about trust, and I wouldn’t advise you to be either. There’s a risk that Jane will mess up royally, miss your trust completely, or simply see your gesture as a sign of increasing workload. There are projects you should handle yourself; there are Janes you shouldn’t trust. And of course, these situations are better handled by your managerial intuitions than this post.

But here’s the critical point: if you have a reasonably competent employee, and if you trust them enough that they notice but not so much that they panic, you will often or even usually discover the completely hidden benefit of trust: it not only makes them try harder, it makes you trust them more. So yes, beware the risks of trusting too much, but also attend to the opportunity costs of not trusting enough: the lost engagement and motivation of your employees, and the missed opportunity to create an ever-more trusting relationship. I think you’ll be amazed by the result—I have.