Many years ago, when I was training to become a professional negotiator and mediator, I heard this parable in many of the seminars I attended:
The head chef comes into the kitchen and finds two of his sous-chefs fighting over the only orange available.
They each had the same position: they needed this last orange to do their jobs properly.
What should the head chef do to help resolve this issue?
Of course, most of us thought that each sous-chef should get half of the orange and that would be the end of it right? Wrong! What we needed to do was ask why each person wanted the orange. As it turned out, one chef needed the rind for cake and other needed the pulp for juice. By separating the parties’ positions (“I want the orange”) from their interests (“I want the rind” / “I want the juice”) the head chef was able to make everyone happy by giving them what they really wanted.
Ok, this is a nice story but how can the typical business person use this system in his /her day to day negotiations? Well, Heidi Rozen showed us exactly how she did this in a negotiation with none other than Steve Jobs! This negotiation centered on a software publishing contract between both their companies in the mid- 1980s. At first it seemed like a deal was impossible but, by using the same process that the head chef used above, Ms. Roizen was able to find a viable solution. This is how she did it:
Step 1: Look At The Parties’ Positions
As Ms. Roizen recounts, the main problem was that each party needed a different cut of the royalties generated from the deal. Ms. Roizen offered Mr. Jobs her “standard” 15% but he demanded 50%. When Mr. Jobs would not budge during negotiations, Ms. Roizen felt her options were limited to either (a) giving in to Mr. Jobs’ demands to her detriment or (b) walking away. Because Ms. Roizen would not do “a bad deal just because [she] was dealing with a high-profile person,” she initially decided to pursue option b.
Luckily, Ms. Roizen had a friend who convinced her to take a second look at the deal - not from the perspective of each party’s position - but his / her interests.
Step 2: Examine The Parties’ Interests
Though Ms. Roizen knew she couldn't afford to pay a 50% royalty fee, she still decided to step outside the box of her position and focus on what was really important to her: economics and profitability. Her friend, who worked at Mr. Job’s company, told her that Mr. Jobs had promised his developers a 50% rate so it was important for him to deliver on that. So essentially, all Ms. Roizen had to do was “figure out a way to make a contract that she can live with that also says 50% at the bottom.”
The Deal
Once Ms. Roizen understood Mr. Job’s needs, “it was relatively easy to come up with a contract...” Instead of focusing on her “standard 15%” she looked at how she can meet her economic needs. In so doing, she deducted quite a bit of her expenses from the gross royalty revenues. Only after doing this did she offer Mr. Jobs a fee that was 50% of the net royalties. In the end, Mr. Jobs was happy because he got a contract that had the 50% royalty fee that he promised his employees and Ms. Roizen was satisfied because her company turned a profit on the deal.
The Take Away
All of us get so caught up in our position – our “bottom line”, that we forget to ask ourselves “why is this so important to me?” And of course, “why is the other party’s position so important to him/her?” This one word, “why” is the foundation of all negotiations. So, instead of negotiating with people based on their stated position, look beneath the surface, find the answer to the question of “why” and give them your proposals based on this. As Steve Jobs and Ms. Roizen so clearly demonstrated, that is how you get exactly what you want in any negotiation.
