Collaboration Can Make You More Profitable | Chris Voss | Summary and Q&A

TL;DR

Collaborative negotiations, rather than compromising, lead to better outcomes and long-term relationships.

Key Insights

• 🥺 Compromise often leads to feelings of anger and being cheated, as losses are valued more than equivalent gains.
• 🥳 Collaboration focuses on finding solutions that increase profitability for both parties, leading to smoother and more satisfying negotiations.
• 🧑‍🏭 In industries like real estate, collaboration can involve discussing factors beyond price, such as implementation costs and terms.
• 😷 Asking "why" in negotiations can trigger defensiveness, while using calibrated questions promotes collaboration.

Transcript

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Questions & Answers

Q: How is compromise in negotiations often perceived by both parties?

Compromise can lead both parties to feel like they've lost something, as humans tend to value losses twice as much as equivalent gains, according to behavioral economics theory.

Q: How does collaboration in negotiations benefit both parties?

Collaboration focuses on finding mutually beneficial solutions that increase profitability for both parties. It can result in quicker deal velocity, long-term relationships, and improved overall satisfaction.

Q: Can collaboration be applied in industries like real estate, where price negotiation is common?

Yes, collaboration in real estate can involve discussing other factors like implementation costs, back-office support, and terms to make the deal more profitable for both parties.

Q: How can asking "why" in negotiations be problematic?

Asking "why" can make the other party feel defensive and accused, potentially leading to friction. It triggers a conditioned response to defend oneself.

Q: What is a better alternative to asking "why" in negotiations?

Using calibrated questions that start with specific words, such as "what made you" or "seems like you've got a good reason for," can help alleviate defensiveness and foster collaboration.

Q: How does collaboration tap into our natural inclination as humans?

Collaboration is in our nature, as our prehistoric ancestors who collaborated were the ones that survived. We have a hard-wired desire to collaborate, but we need to feel that the other party also wants to collaborate.

Summary & Key Takeaways

• Compromise in negotiations often leads to both parties feeling like they've lost, as humans tend to value losses more than equivalent gains.

• Collaboration in negotiations focuses on finding mutually beneficial solutions that increase profitability and improve relationships.

• In the example of hiring a contractor, collaboration can involve exploring implementation costs, tailoring terms, and finding ways to make the deal more profitable for both parties.