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|Focus on "Why" Rather Than "What" for Successful Negotiations
Two sisters have one orange. Like two well raised sisters, they decide to split the orange in half. One sister takes the orange, removes the fruit, takes the rind and cuts it up for use to flavor a pie crust. The other sister removes the fruit, eats it, and throws the rind into the trash.
These two sisters focused on the "what" and compromised without asking the most important question in negotiating: "Why do you want that?" The result is that each sister only got half as much as they might, had they stopped to ask that question.
Look at it another way: The "What" is the price, contact, job, etc. upon which you have decided. The "Why" is the motivation which caused you to make that decision. Many negotiators make the mistake of thinking what they want is logical and obvious and important to everyone. A request from the other party for anything else causes the negotiation to deteriorate from solving a problem to arguing about positions.
An illustration how this works:
A sales representative for a manufacturing company is calling on a customer. The customer uses a part from the manufacturer to produce their finished product. The sales representative has been charged with renewing the contract and getting an 8% price increase.
The sales representative discusses the situation with the manufacturer. The manufacturing executive tells the sales representative. "This is an item with a small profit margin, and you are one of three companies that make this product for us, nationally. If you are going to raise your prices, you are out and we are going to give your business to one or both of the other two companies. They have already indicated that they will not be increasing pricing, this year." This is "What". Price appears to be the main issue.
The sales representative asked the executive, "I am charged with getting the increase. What would you do if you were in my shoes?" This is "Why". He asked the question to learn more about what is really driving the price/what issue.
The executive answered, "This was a product where we used to have good market share and exclusivity. Other companies have begun to produce this, and are doing so at prices equal to and a bit lower than ours. Some of these products are actually better. We are losing our market share. As a result, in order to compete, we have to hold our prices flat this year. So, you can see that a price increase is not allowable if you want to still have our business."
Suddenly, it is not price, but market share and survival that are the issues. The "why" opens up a whole new arena to help negotiations.
The sales representative went back to his office and met with the engineers, sharing with them what he had been told. The customer is losing market share, other people are making a better product and their competitors are agreeing to no increase in the next year. They went to work on the "why".
The engineers were able to redesign their piece of the product, saving 15% off the cost of manufacturing. The result was they were able to come back and offer a new improved product at less cost. This enabled the sales representative to not only retain his business, but he was able to obtain an exclusive contract, eliminating his competition.
The sales representative had two choices in the conversation with the manufacturer. One was to begin to bid, defend, fight, convince, force the issue, or walk over pricing. The second was to ask questions to learn more about the interests behind the price position. What was learned was that it was market share, competition, and possibly design and technology, more than simply "everyone else agreed to no price increases, so if you don’t, you are out." This totally changed the approach to successfully negotiating an agreement. It is important to note that there were several "whys" behind the "what" of price.
Asking for more information also requires good questioning and listening skills:
Questioning skills require three techniques:
This maintains safety and keeps tension low for the other party. They want to help you.
Other ways to find out the "why":
"Why are you concerned about losing market share? Is it due to simply price, or are there other reasons?"
"The product you make is very good. Costs are going up all over. Why not ask for a small price increase?"
Both of these techniques are valuable in helping a negotiator better understand why the other party wants something.
When we are speaking with someone, we receive communication from three basic sources. These are words, voice tone, and body language.
The best negotiators are not necessarily the best speakers. They are the best listeners. They are listening for the reasons why the other party is asking for, needs, wants, or demands something. And they are listening for all the "whys", not just one. Because they are looking for the common ground from which a successful negotiation can be built. They are also looking for interests the other party may have that are not being met, that may get in the way of successfully solving the problem.
There are three listening skills:
Why is this so important?
Typically, when two parties meet, there is an underlying desire to reach an agreement. Also, many times the "what’s" are diametrically opposed. For example, in a labor negotiation the union wants to get the best deal for the members. Management wants to protect the company. However, each needs the other (no company no jobs, no employees no company), so the effort to uncover the common "whys" will show that, in reality, they both want the same thing. Simply put, employees being paid fairly working in a healthy company.
When the "whys" are examined, generally common ground is found. These also can be significant in helping creatively solve the problem. Why they other party wants something may never have occurred to the other side. In fact, it may make them appear, to the other party, as being difficult, if not irrational. Many times, not only does this get them both working on the problem rather than each other, but it can be the solution. It uncovers the unsaid things that prevent successfully negotiated deals.
Getting the "whys" handled for both parties is the reason we negotiate.
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|Copyright ©2003, David Wachtel|
|Copyright ©2003, The Negotiator Magazine|