Money talks … but

does it tell the truth?

There is a legendary story that has become part of the folklore of negotiations:

A brother and sister have been squabbling over some leftover pie, with each insisting on the larger slice. Each wants to get a big piece and not be cheated by the sibling. Just as the boy has gained control of the knife and is poised to hack off the lion’s share for himself, the mother or father arrives on the scene.

In the tradition of King Solomon, the parent says, “Hold it! I don’t care who cuts that pie into two pieces, but whoever does has to give the other the right to select the piece they want.” Naturally, to protect himself, the boy cuts the slab into two pieces of equal size.

The tale may be apocryphal, but its underlying moral has continuing revelance today. There are many situations in which the needs of the protagonists are not really in opposition. If the focus shifts from defeating each other to defeating the problem, everyone can benefit.

In a collaborative Win-Win negotiation we are trying to produce an outcome that provides acceptable gain to all parties. Conflict is regarded as a natural part of the human condition. If conflict is viewed as a problem to be solved, creative solutions can be found that enhance the positions of both sides, and the parties may even be brought closer together.

It may be a coincidence, but in collective bargaining between management and labor the metaphor of the pie is customarily bandied about. One side will often say, “We just want out share of the pie!” However, if the pie is seen as a fixed sum of money, what one side gains the other side must necessarily lose. Consider the following:

After a bargaining impasse, a union goes on strike. If the union wins, the wages lost during the strike will exceed the benefits gained. Conversely, with the strike, management will lose more than the cost of granting the demands without the strike. So both lose with the strike. If there were no strike, in a climate of trust they could achieve a settlement that would enable both sides to get what they want.

In spite of this logic, we continue to witness strikes where not only do union and management lose, but the public, the economy, and even the national interest suffer. Why does this happen? Perhaps part of the problem is the analogy of the pie. When we converge on a fixed sum and start to argue back and forth making demands, counter-demands, conclusions, and ultimatums, there is no likelihood of a creative outcome. Instead, we should see our true interests as complementary and in effect ask each other, “How can we get together in a way that will make the total pie bigger, so there’s more to go around?”

Obviously, this does not refer to labor relations alone, but to each and every negotiation where relationships are on-going. If you think for a moment, you’ll see that covers nearly all your negotiations.

Since nature does not create all human beings alike, your needs and my needs are usually not identical. Therefore, it’s possible for both of us to emerge victorious.

The uniqueness of each person seems to be an accepted fact—at least on an intellectual level. Then why do we approach most negotiations as if they were adversary encounters, where your satisfaction must be at the expense of the other side? The reason is that in most negotiations, discussion is about a “fixed sum,” usually money.

Why is negotiation talk always about money, or a form thereof, like price, rate, salary, or “bread-and-butter issues”? Why is everyone seemingly hung up on money? It’s not the money—it’s the m-o-n-e-y! Because m-o-n-e-y is specific, precise, and quantifiable. It gives feedback on whether your other needs are being met. It helps you keep score. It’s a way of measuring progress. It’s a yardstick for determining worth, as some homemakers know all too well. It’s even a means of encoding distasteful messages.

What if I go in to my boss and say, “To work for a jerk like you, under these degrading circumstances, I want more money!” Such candor is unlikely to endear me to my superior. Therefore, I’ve learned to convert into code my real feelings and frustrations and simply say, “I’d like to make more money.”

Not only is this pure monetary message more palatable, but the boss puts his arm around my shoulder and exclaims, “I like ambitious people. You and I, we’ll go to the top together.”

Many of us have been conditioned from the time we were youngsters to accept money as a conversational topic. Some have been led to believe that their favorite color should be green—dollar green. Listen to people talk and you sometimes think that they are living dollar signs. But if you believe that most negotiations pivot on money alone, you’re mistaken. People are not the way they speak or appear to be. Surely money is a need, but it’s merely one of many. If you neglect their other needs, satisfying people’s dollar need alone will not make them happy. Let me prove this via a hypothetical situation:

While thumbing through a magazine one evening, two people living together—say a husband and wife—notice an antique clock used as a background piece in an advertisement.

The wife comments, “Isn’t that the most beautiful clock you ever saw? Wouldn’t it look wonderful in our center entrance hallway or foyer?”

The husband replies, “It sure would! I wonder what it costs. There’s no price tag in the ad.”

Together they decide to look for the clock in antique shops. They mutually agree that should they find it, they’ll pay no more than $500.

After three months of searching, they finally see the clock displayed at an antique-show booth. “There it is!” the wife exclaims excitedly.

“You’re right, that’s it!” says the husband. “Remember,” he adds, “we aren’t going to pay more than $500!”

They approach the booth. “Oh-oh,” mutters the wife. “There’s a sign on top of the clock that says $750. We might as well go home. We said we’d spend no more than $500, remember?”

“I remember,” says the husband, “but let’s take a stab at it anyway. We’ve been looking for so long.” They huddle privately and appoint him the negotiator, with an outside chance to secure it for the $500.

Gathering his courage, he addresses himself to the clock salesman. “I notice you have a small clock for sale. I notice the alleged price on top. I also notice a little dust around the sign giving it an antique quality.” Building momentum, the husband now says, “Tell you what I’ll do. I’ll make you one offer and one offer alone for the clock, and that’ll be it. And I’m sure it’ll thrill your very being. Are you ready?” He pauses for effect. “Well here it is—$250.”

The clock salesman, without batting an eye, says, “It’s yours. Sold.”

What’s the husband’s first reaction? Elation? Is he saying to himself, “I did exceedingly well, beating my objective by a considerable amount”? Heck no! You know as well as I do, because we’ve all been in similar situations, his initial reaction is, “How stupid of me! I should have offered the guy $150!” You also know his second reaction: “There must be something wrong with the clock!”

As the husband carries the clock to his car, he says to himself, “This sure is light, because I’m not that strong! I’ll bet some internal pieces are missing!”

Nevertheless, he puts it in the entrance hallway of their home. It looks stunning. It seems to be working fine, but he and his wife feel uneasy.

After they retire, they get up three times in the middle of the night. Why? They’re sure they didn’t hear the clock chime. This goes on for days and sleepless nights. Their health is deteriorating rapidly, and they are becoming hypertensive. Why? Because the clock salesman had the effrontery to sell them that clock for $250.

If he’d been a decent, reasonable, compassionate person, he’d have permitted them the pleasure and self-satisfaction of bargaining up to $497. By saving them $247, he’ll eventually cost them three times that amount in irritation bills. The classic mistake in this negotiation was that all attention was directed to a single facet—the price. If the couple were one-dimensional, having only a money need, they would have been ecstatic. However, like all of us, they are multi-faceted, having many needs, some unconscious and unacknowledged.

Satisfying this couple’s price demand alone did not make them happy. Apparently getting the clock at their desired price wasn’t enough. For them, under these circumstances, the negotiation ended too quickly. They needed a little chitchat, a discussion to establish trust, and even some bargaining. If the husband had been able to pit his wits successfully against the seller, this process would have made him feel better—about the purchase and about himself.

Previously, we said that negotiation is an activity in which parties are trying to satisfy their needs. Yet their real needs are seldom what they seem to be, because the negotiators try to conceal them or don’t recognize them. Consequently, negotiations are never totally for what is being openly talked about or contested, be it price, services, products, territory, concessions, interest rates, or money. What is being discussed, and the manner in which it is being considered, are used to satisfy psychological needs.

A negotiation is more than an exchange of material objects. It is a way of acting and behaving that can develop understanding, belief, acceptance, respect, and trust. It is the manner of your approach, the tone of your voice, the attitude you convey, the methods you use, and the concern you exhibit for the other side’s feelings and needs.

All these things comprise the process of negotiation. Hence, the way you go about trying to obtain your objective may in and of itself meet some of the other party’s needs.

Up to this point we have explored why negotiations often get unnecessarily bogged down in adversary struggles, conflicts that may not benefit either side. If negotiation involves the satisfaction of needs, we have suggested that the process itself—the way we go about resolving the conflict—may meet the needs of the participants. Further, since all people are unique, the needs of prospective opponents can be harmonized or reconciled.

Let me now elaborate on how the negotiating process and reconciling opponent’s needs can be used to bring about collaborative Win-Win outcomes: