to create a payment plan that Germany could meet. As a result of German reparation defaults, Belgium and France occupied the Ruhr district. By 1928, with Germany further behind, the Young Plan was a second effort to collect payments. Again, Germany was unable to pay. President Hoover called for a moratorium on reparations (and the United States forgave all debts from other Allied countries that were going to be repaid with monies they were to have received from Germany).
The Allies had won, Germany had lost. It was a classic I Win–You Lose negotiation. The Allies got to set all the terms. But the terms were unrealistic. They made a deal that could not be carried out. Instead of creating peace, they created further resentment. The loss of the Ruhr, the devastation of the German economy, the sacrifice of natural resources, all contributed to a latent, seething desire for revenge. Many historians feel that it was the ideal atmosphere for the rise of Adolph Hitler.
The deal that ended World War I, in effect, helped start World War II. In fact, when the Nazis invaded France, Hitler ordered that same railroad car, then housed in a museum, be the site where he would “dictate” the terms of the German occupation of France. I Win–You Lose became We Lose.
I Win–You Lose and its negative consequences seem obvious when the stakes are high and you have the historical benefit of hindsight. But the principle applies to even the simplest deal. In our seminars, we often begin with this game. You can try it yourself.
The $10 Game
Take 10 one-dollar bills. Find two people – two partners, husband and wife, people in your office, your kids. Tell them, “If you two can negotiate a deal in 30 seconds on how to divide the $10 between you, you can have the money. But there are three rules:
1. You can't split it, $5 and $5.
2. You can't say $7 and $3 or $6 and $4 and make a side deal to adjust the division later.
3. If you don't make a deal in 30 seconds, I take all $10 back.”
Chances are, both parties will have a hard time resisting the urge to “win” and not “lose.”
You'll hear the hard sell:
It's better for one of us to get it than neither of us so let's make it me.
I agree: As long as the one is me.
The soft sell:
Oh, gosh, whatever you think is fair.
Golly, how about $7 for me and, say, $3 for you?
No way!
The sympathy ploy:
I need the $10. I just ran out of gas.
At least you have a car.
The so-called logic ploy:
We've only got 30 seconds so you take $4, I'll take $6, and we'll both come out ahead.
Yeah, but you're more ahead.
The trust-me ploy:
Give me all $10 and I'll make it up to you later. Trust me.
I've got a better idea. Give it all to me, and you trust me.
BZZZZ! Time's up!
Not only is it likely you'll keep your $10 with this game, but you can learn a lot about why negotiations don't work:
● When you have no preparation time, you don't think; you react.
● When you have time pressure and no preparation time, you revert to habits – usually bad ones. (When someone else is watching and judging your negotiations, it just adds to the pressure.)
● Most people revert to the habit of I Win–You Lose. Each one wants to win so much, is so convinced one can win only if the other loses, that they both lose.
● Sometimes I Win–You Lose turns to I Lose–You Win. “I'll take $4, you take $6.” In the quest to make a deal, any deal, people sometimes give away too much. Never forget, the goal should still be WIN–win– at least maximize and ideally, the big win is yours.”
How Can You Achieve WIN–Win in the $10 Game?
Start with this premise:
Maximize your interests. Determine what is the most you can come away with. Don't give away more than you have to. Get the most of a good deal, not the least of a bad deal. (That's another way of expressing WIN–win.)
Here are some interesting solutions we've seen in the seminars:
● Look for points of agreement. Rather than leaping into battle over who gets the most money, look for an idea upon which you both can agree. For example, “If we don't make a deal in 30 seconds, we both get nothing. So, let's start by splitting $8 of the money, $4 for me and $4 for you. Now let's just negotiate over the last $2.” Once you've found one basis for agreement, you may well find more.
● Remove ego. Take subjectivity out and replace it with objectivity. Use a coin flip. “Heads, I get $6 and you get $4. Tails, you get $6 and I get $4.” Both sides now have an equal chance to “WIN” or “win.” And, regardless, it happened “fair and square.”
● Listen carefully to the rules. They're limiting but not totally restricting if you're really creative. No one said you can't make change. Split the money $4.99 and $5.01. That's only a 2-cent windfall for the supposed winner.
● Be creative – look for new approaches. Increase the pie. Again, the rules allow for imaginative solutions. No one said you can't add to the total. Let's say, you put in an extra dollar. Now you're dividing $11. You take $6 and the other side takes $5. Both sides “WIN” by increasing the pie before dividing it.
Unfortunately, most people don't reach these solutions. They fall into the conventional traps of win–lose negotiation.
The Real or the Apparent Adversary?
What most people lose sight of in dividing the money is who they're up against. Each of the two negotiators generally sees the other as the opponent. They're wrong. In reality, they're up against the person holding the money. If the two negotiators don't succeed in making a deal, the one holding the money keeps the money. Before negotiators can find solutions, they have to identify their real obstacles, not just the apparent ones.
Filling the Negotiator's Toolbox
How do you avoid the pitfalls of negotiation? Don't revert to the same old methods to solve your problems. If your only tool is a hammer, all problems look like nails; if the only tool in your negotiator's toolbox is I Win–You Lose, then everything turns into an I Win–You Lose situation. Negotiating becomes a battle of wills and/or egos. It isn't a good deal unless you defeat the other side in the process.
Conversely, if the only tool you have is I Lose–You Win, every negotiation will look like you have to give in, sacrifice, or settle for less in order to appease the other side's appetite.
Turn a mirror on yourself and ask, “What tools am I using in my negotiations?” The goal here is to put more tools in your negotiator's toolbox. By giving you the appropriate tools and an understanding of how and when to use them, you can become a more confident, and ultimately more successful, negotiator. Instead of dreading negotiation, you may even look forward to it.
What Negotiation Is
Knowledge is power.
If negotiation isn't laboratory science or a bloody war, if it isn't the macho drama portrayed in the movies, what is it?
Negotiation Is the Commerce of Information for Ultimate Gain
Let's take that definition apart. First, the commerce of information: Commerce is the business of trading. It's the stock market in New York, the commodities floor in Chicago, the