One of the key lessons I’ve learned recently is a collaboration principle I’ve long believed in, which was reinforced during a negotiation course by Peter D. Johnston, Managing Director of NAI Limited.
Our class took part in a double-blind negotiation exercise wherein two teams competed for points based on the result of our price negotiations regarding a barrel of oil: $10, $20, or $30. Immediately prior to the exercise, a representative from each team was given the opportunity to speak with their counterpart from the other team. Each representative could choose to be truthful or dishonest about his or her team’s economic strategy in the hope of being able to influence the other team’s decisions. At the end of the exercise, it came to light that each team had lied about its intentions, seeking to profit by cornering the market. The most profitable returns came when both teams agreed to price their oil at $30 a barrel, which resulted in each team capturing the highest available revenue for their team. Any less, and losses would be incurred for the other team. If either team lied, the losses would double.
If both teams had used the initial meeting between their representatives to discuss their needs and chosen to collaborate instead of compete, their individual and collective performance would have been far superior. Unsurprisingly, each team also declared it would not trust the other in future negotiations. This exercise was indicative of what happens in the business world with negotiations, and it left me with three main takeaways:
- We should have an authentic interest in meeting the needs of the other party, who will then be more likely to reciprocate.
- Our actions in the present will influence the other party’s future willingness to cooperate and engage in business with us.
- Occasionally, we are required to make short-term sacrifices to secure long-term gains. This is acceptable only if the costs have been carefully weighed against benefits, and plans have been formulated to mitigate any potential risks.
I had always been familiar with phrases such as “Always put your best foot forward”, and “Don’t burn bridges”. However, the above exercise in negotiations helped me perceive these in a new light. The attitude we have in negotiations is telling on our approaches to leadership style, conflict resolution, and navigating difficult conversations.
This exercise left such a lasting impression on me that I shared it with my family and we coined the phrase, “Play your $30 game”. We often use it as a reminder to take the high road in challenges. It helps us stay mindful of how our words and actions impact others, and how we can focus on principles rooted in trust and collaboration to achieve the best outcomes for everyone.
