Creative Conflict is a book written by negotiation experts Bill Sanders and Frank Mobus. It was published on June 15, 2021, by Harvard Business Review Press. The book offers a practical guide for business negotiators who are looking to revamp and innovate their negotiation tactics.
According to the book’s description, negotiation is stuck, and it’s time for something new. Almost everything is negotiable, yet traditional approaches to negotiation are not providing solutions for many situations. The authors offer a fresh perspective on negotiation by introducing innovative ideas such as structured conflict, creative problem-solving, and value creation.
The book aims to help negotiators navigate complex situations and provides real-world examples to illustrate how the strategies presented in the book can be applied.
Negotiating a New Era
The essence of negotiation is in our differences. Value derives from the gap between two parties’ positions and from their overlapping assets and needs. Creative negotiators steer away from antagonistic conflict and its mind-numbing side effects, such as anger and fear.
They tack into creative conflict—a sea of mutual tradeoffs and thoughtful compromise that gives birth to something new and better.
Win-win is a myth. No matter how harmonious a negotiation may seem on the surface, the competition never completely disappears. A more fitting term might be “Better for Both.” How much better one party or the other gets will hinge on the relative skill of the negotiators.
Bargaining Tactics
Bargaining tactics involve a bit of strategy and deception, similar to playing poker. However, it’s important to avoid outright lies that could damage your reputation or future business dealings.
The “take it or-leave it” tactic is often used to gain leverage in a negotiation, but it’s rarely a true ultimatum. This approach is typically more effective for buyers than sellers, as buyers usually have more options.
When a buyer demands a “best and final offer,” it can force a seller to close the price gap before the real negotiation even starts. However, sellers can deflect this demand by preserving room to negotiate and adding ambiguity that requires further discussion.
Moving around the Table
In creative dealmaking, the two parties find reciprocal tradeoffs to expand the deal—and often to forge a new ZOPA where none seemed to exist.
By focusing on solutions rather than points of division, the continuum’s middle mode expands negotiating space, reduces tension, and nurtures creative conflict.
Mutually beneficial synergies contain the power to disrupt whole industries.
- Creative dealmakers stand ready to trust the other side as warranted but remain vigilant in protecting their own interests.
- No is the most indispensable word in negotiating—not to shut down the process but to keep it going in pursuit of a better, more creative deal.
- Win-win is a myth. It ignores the reality that the two sides are still competing for the largest share of any added value, even in a deal that’s better for both sides.
Strategies and tactics contd.
Even when you fully intend to give something up, do it slowly and reluctantly. By making the other party work for the concession, you’ll increase its subjective value. You’ll also incentivize them to generate more profitable solutions.
What the other side wants is not the same as what they need. Set limits on the first while doing all you can to satisfy the second.
The quid pro quo is the essence of creative dealmaking. Before making a no-strings-attached concession, consider how the other side might be able to reciprocate. By enriching the creative process, quid pro quos add value to the outcome.
Bargaining Strategies
In bargaining mode, the prime strategy is building leverage. Creative bargainers leverage time, authority, legitimacy, their willingness to risk deadlock, and the other side’s commitment to the deal. And they persist in the face of resistance.
Discovery tests the other side’s limits and flexibility. You’re out to determine which side comes into the negotiation with more power. But whatever the power balance, a friendly conversation can reveal the other party’s needs and even lead to unexpected concessions.
Team Negotiations
Winning negotiating teams share three characteristics: diversity of opinion, decentralization, and a culture of autonomy and free dissent.
Before engaging the other side, internal negotiations are a must for clarifying roles and laying out the team’s strategy.
Effective team leaders assert their own positions while creating a safe space for contrary views. When a better idea emerges, they don’t hesitate to change course.
To prepare for the other side’s attacks, appoint a devil’s advocate to poke holes in the team’s approach.
As the team moves from planning to actual negotiation, make sure that everyone is on the same page. If your team seems divided at the table, the other side will conquer.
Bargaining Strategies Part 2
Target-setting is a three-part exercise: your anchor, your aspirational starting point; your target, a reasonable estimate of where you think you’ll land; and your reservation price, the point at which you’d be willing to walk away from the deal.
Concessions are double-edged. They can move you closer to a deal or further away from one. Creative negotiators concede slowly, calmly, and in small increments. They agree to split the difference only when it works in their favor.
A good price doesn’t necessarily equate to a good deal. By identifying issues beyond price and exploring what the other side really needs, creative bargainers can increase their net profits.
Bargaining tactics contd.
The “tactical deadlock” tactic is a power play that tests the other party’s flexibility and resolve, but it comes with the risk of losing the deal.
It’s important to be cautious about revealing too much information during bargaining.
Awkward silences can be advantageous, allowing the other party to make spontaneous disclosures or unplanned concessions while you stick to your plan and follow market norms.
As negotiations come to a close, be aware of “nibblers,” who ask for small concessions at the last minute. You can choose to grant these requests or ask for something in return. Before agreeing to any concession, make sure to translate percentages and metrics into real dollars so you know exactly what you’re giving up.
The Mobus Negotiating Continuum
All negotiations are not the same. Depending on the relationship between buyer and seller and the nature of their business, they fall into one of three modes. Each of them involves distinctive tactics, strategies, skill sets, and mindsets.
Bargaining is a zero-sum contest to capture value, an arena where competition outweighs cooperation. Bargainers gain an edge by probing the other side’s flexibility and better defining their own objective needs.
Creative dealmaking surfaces and adds value. It looks to expand deals via exchanges of complementary concessions, matching each party’s assets with the other’s needs. Competition and cooperation are more or less in equilibrium.
Zero-Sum bargaining: Unavoidable conflict
Avoid antagonistic conflict that can hinder the creative quest for a more profitable deal. Even the most adversarial negotiations contain a cooperative element.
With rare exceptions, there’s no such thing as a firm or fixed price or position.
- “Take it or leave it” is a tactic, no more and no less.
- Successful negotiators recognize and disarm their fears—of failure, of losing, of being wrong, of appearing greedy.
- The other side needs you as much as you need them, or they wouldn’t be talking to you in the first place.
- When a negotiation gets stuck and your counterpart seems immovable, don’t presume you’re at an impasse. They may simply need more acceptance time to come around to your point of view.
Creative deal-making: Strategies and tactics
Once bargaining hits a wall, creative deal-making can lead to a better-for-both solution by matching one side’s assets with the other’s needs.
The primary strategy in this mode is value mapping, which surfaces subtle, hidden assets and reveals mutually beneficial tradeoffs.
As more information is shared in the process of discovery, both sides gain insights into the other’s needs—and how to craft a value proposition that can meet them.
Ask questions, and lots of them. It’s the best way to expand our knowledge base and to collaboratively find the problem that needs to be solved.
