An Important Leadership Lesson from the Principles of Negotiation
By Samuel Kim
I find myself standing in front a crowd of 34 people in Seoul, talking about negotiation. After spending 2 hour-long sessions explaining the basic concepts of negotiation, I asked them to engage in their first exercise: role-playing a situation in which 2 parties, with opposing and tradable values, have come to negotiate. 40 minutes later, I had every team share what their negotiation outcomes had been, populating them directly in an Excel sheet. When I projected the final results on the wall, to everyone’s surprise, only 3 of the 17 teams had closed a deal. I could sense the audience’s frustration and disappointment. In a 20-minute debriefing session, we discussed what had gone well, what hadn’t, and what could be improved.
The truth is that I was also quite surprised by the low number of successful deals. The way I had designed the case gave the participants a great deal of leeway, precisely so that the two parties could reach an agreement. We call this the “ZOPA,” or Zone of Possible Agreement, the space between the buyer’s lowest price and the seller’s highest, in which an agreement can take place.
As we went through our period of reflection, we discovered a pattern among those who hadn’t closed a deal. Most of them had taken the approach of “My gain is your loss; your gain is my loss,” a method also called “claiming a value.” Rather than working together toward a deal that would allow both parties to leave the table smiling—a win-win situation, in which each party gives what they have to offer, in return for what they need—these individuals had fixated on enlarging their own gains at the expense of others. They had overlooked the bigger picture of attaining the greater good: serving both parties’ ends as well as the relationship, reputations, future opportunities, etc. This method is therefore called “creating a value.”
This example offers one important leadership lesson for all of us. The leadership we need in this world of many brokenness and fault-lines is one that results ultimately in greater gains for all. A discipline to pursue a win-win situation, regardless of distractions, is what true leaders do.