Win-win is for losers

We hear it all the time; “Negotiation is about win-win.” “We need to compromise our position so that everyone is happy.” Is this really the best way to trade? If someone goes into a negotiation with this mindset, he is putting himself at a disadvantage and has already convinced himself that he will have to give up the outcome he really wants.

Where did this idea come from? In the late 1800s and early 1900s, the United States Congress passed the Railroad Labor Act. Part of this law states that you must “deal in good faith” and if you don’t, you can be sentenced to prison.

So the result of this law is that now we feel like we have to give up our position when we negotiate or we are somehow a bad person. But what is negotiation really?

In the Oxford Dictionary of English, it states that negotiation is “the effort to reach an agreement between two or more parties with all parties having the right of veto”.

There is nothing written about compromise or win-win.

So if we analyze the above definition, we can see two important points.

First, negotiation is an “effort” to reach an agreement. Therefore, it requires work; it is not an automatic process. There are at least two or more parties that have their own desired outcome and the effort is to find a way to get what you want in the negotiation.

The other important point is that all parties have the “right of veto”. This simply means that all parties involved in the negotiation have the right to opt out and not move forward if they do not feel comfortable.

This is a very important principle. It is about respecting the individual rights of each of the parties and not infringing them with force. For example, if we were negotiating and as part of my negotiating tactics, I put a gun to your head, I have taken away your veto and this is no longer negotiation, but open aggression.

Therefore, your only responsibility to the other party when negotiating is not to do anything that would remove that person’s veto power. As long as they are allowed to negotiate without being compelled by force, he can feel free to be as tough as he wants to maintain his position.

Just remember that you have a certain result in mind that you are trying to achieve. As long as the other person is free to back out of the negotiation, you shouldn’t feel guilty about working hard to get what you want.

But, don’t take your eyes off the big picture. You may still want to deal with this person in the future. You may find that giving in now will allow you more power in future negotiations. Alright.

Just remember, it’s time to stop being a loser when it comes to trading. Forget win-win, and just win.