The Third Principle: Invent Options for Mutual Gain
Once a negotiator has successfully separated the people from the problem and has shifted the focus from rigid positions to underlying interests, the negotiation arrives at its creative and potentially most fruitful stage. This is governed by the third principle: “Invent Options for Mutual Gain.” This principle addresses a common and debilitating failure in most negotiations: a lack of imagination. Parties often arrive at the table with a fixed idea of what they want, see the negotiation as a zero-sum game, and focus all their energy on dividing a seemingly fixed pie. The result, all too often, is either a bitter stalemate or a suboptimal agreement that leaves significant value on the table for both sides.
The principle of inventing options for mutual gain is a direct command to resist this narrow-mindedness. It urges negotiators to transform the process from a zero-sum haggle into a creative, collaborative search for solutions that expand the pie before dividing it. It is the phase where the deep understanding of interests, gained from applying the second principle, is converted into a menu of tangible, innovative possibilities. The classic cautionary tale, mentioned in the book, is of the two children who quarrel over an orange. They finally agree to a positional compromise and cut it in half. One child eats the fruit and throws away the peel; the other, who wanted the peel for baking a cake, grates her half and throws away the fruit. Both end up with half of what they wanted, when a simple exploration of interests could have given them 100%—the whole fruit for one and the whole peel for the other. This story is a powerful metaphor for the vast majority of negotiations. The goal of inventing options is to ensure you and your counterpart get the entire orange, not just a squandered half.
To successfully implement this principle, one must first understand the psychological and structural barriers that stifle creativity in negotiation (the Diagnosis) and then learn a set of specific, practical techniques to overcome them (the Prescription).
The Diagnosis: Four Obstacles to Inventing Options
Creativity does not come naturally in the high-pressure environment of a negotiation. The process itself seems to conspire against the generation of new ideas. The book identifies four major obstacles that systematically inhibit the invention of an abundance of options.
1. Premature Judgment: This is the most significant barrier. Our minds are conditioned to analyze and critique. The moment a new idea is suggested, an internal critic pounces on its flaws. In a negotiation, this critical sense is heightened. The stakes are high, and the atmosphere is often tense. We fear looking foolish by suggesting a “wild” or half-baked idea. We worry that our counterpart will seize upon a tentative suggestion as a firm offer, or that we might inadvertently reveal a piece of information that weakens our bargaining position. For example, in a salary negotiation, an employee might hesitate to suggest a creative benefits package (like tuition reimbursement or a flexible work schedule) for fear the boss will interpret this as a sign that the employee is less concerned about the base salary and can be low-balled. This constant fear of judgment—from oneself, one’s colleagues, and especially the other side—effectively shuts down the imaginative part of the brain. The space needed for free-floating, “what if” thinking is suffocated by the need to be practical, serious, and guarded.
2. Searching for the Single Answer: Most people view negotiation as a process of convergence, not divergence. The goal, they believe, is to narrow the gap between positions, not to broaden the field of possibilities. From the very outset, they are looking for the single best answer, the one right solution. This premature closure is the enemy of wise decision-making. Imagine a doctor who, after hearing a single symptom, immediately settles on a diagnosis and treatment plan without considering any alternatives. The chances of an optimal outcome are slim. Similarly, in negotiation, by locking onto the search for a single answer, parties short-circuit the richer process of generating a wide range of options from which they can later jointly select the best one. This mindset leads to a impoverished discussion, often revolving around a single figure like price, and overlooks countless other ways to structure a deal that could be more valuable to both sides.
3. The Assumption of a Fixed Pie: This is the pervasive zero-sum mentality. Parties automatically assume that the situation is an either/or contest: every dollar more for you is a dollar less for me. If this assumption holds true, there is no point in trying to be creative. The only task is to claim as much of the fixed resource as possible. However, this assumption is almost always false. First, at a minimum, both sides share an interest in avoiding a complete breakdown, which would leave them both worse off. More importantly, this mindset blinds negotiators to the possibility of joint gain. The reality is that parties almost always value things differently. One side may care more about the timing of a payment, while the other cares more about the total amount. One may prioritize risk avoidance, while the other seeks a higher potential upside. One may value a public apology, while the other values a confidentiality agreement. These differences in priorities, beliefs, and values are not problems; they are the raw material for creating value. The fixed-pie assumption prevents parties from exploring these differences and thus from finding trade-offs that are low-cost for one side but high-benefit for the other.
4. Thinking That “Solving Their Problem Is Their Problem”: This obstacle is a product of shortsighted self-interest and an adversarial mindset. Each side is so focused on its own needs and concerns that it fails to consider the other side’s. “I’ve got enough to worry about without trying to solve their problems.” This attitude is profoundly counterproductive. A successful negotiation requires the other side to say “yes” to your proposal. They will not say yes to a proposal that does not meet their interests. Therefore, a crucial part of your task is to develop a solution that is also appealing to them. You must find a way to solve their problem as a means of solving your own. The psychological reluctance to legitimize their concerns or to “help the enemy” prevents negotiators from achieving the detachment necessary to design wise and attractive proposals. They remain stuck generating one-sided solutions that are predictably rejected, leading to a frustrating and unproductive impasse.
The Prescription: Four Techniques for Inventing Options
To overcome these obstacles, principled negotiation offers a four-part prescription, a set of practical techniques designed to systematically foster creativity.
1. Separate the Act of Inventing Options from the Act of Judging Them: This is the direct antidote to premature judgment. You must create a space and time where the internal critic is silenced and imagination is given free rein. The most effective way to do this is through a brainstorming session.
The key ground rule of brainstorming is to postpone all criticism and evaluation. The objective is to generate as long a list of ideas as possible, without pausing to consider their merits. Wild and seemingly impractical ideas are explicitly encouraged, as they can often spark more realistic and innovative solutions. In this protected environment, participants are freed from the fear of looking foolish.
The book provides a practical guide for running such a session. Before brainstorming, you should define your purpose, choose a small group of participants, change the physical environment to signal that this is not a normal meeting, and select a facilitator to keep the session on track. During the session, participants should sit side-by-side, physically facing the problem (e.g., a whiteboard), which reinforces a collaborative mindset. The facilitator clarifies the no-criticism rule, and the group lets their imaginations go, recording all ideas in full view. After the session, the group can relax the rule. They first star the most promising ideas. Then, they take these promising ideas and try to improve them, making them more realistic. Finally, they set up a separate time to formally evaluate the refined list and decide which options to pursue.
This technique can even be used with the other side. A joint brainstorming session can be incredibly powerful. It builds a collaborative climate, educates each side about the other’s concerns, and generates ideas that are inherently designed to meet the interests of both. To protect yourself, you must explicitly distinguish the brainstorming session from a formal negotiating session and make it clear that all ideas are “off the record” and without commitment. The example of the union and management brainstorming ways to reduce unauthorized strikes illustrates this perfectly. Ideas like a joint softball team or an annual family picnic—ideas aimed at improving the underlying relationship—would likely never have surfaced in a formal, positional negotiation, yet they might be highly effective.
2. Broaden the Options on the Table Rather Than Look for a Single Answer: This technique counters the trap of premature closure. The goal at this stage is not to find the one “right” path, but to create a rich landscape of possibilities. Wise decisions are made by selecting from a wide variety of well-developed options. The book offers several methods for systematically broadening the options.
- The Circle Chart is a powerful conceptual tool for this purpose. It involves moving through four distinct types of thinking. Step 1: Problem: State the problem; what are the current symptoms? (e.g., “Youths are joyriding in stolen cars.”) Step 2: Descriptive Analysis: Diagnose the problem in general terms; sort symptoms into categories and suggest causes. (e.g., “Lack of supervision, boredom, need for status, peer pressure, lack of opportunities.”) Step 3: General Approaches: Based on the diagnosis, what are some broad strategies or theoretical prescriptions? (e.g., “Increase deterrence, provide alternative recreational activities, offer job training programs, foster community engagement.”) Step 4: Specific Action Ideas: What are some concrete, feasible actions that implement these approaches? (e.g., “Organize a midnight basketball league, establish a neighborhood watch, create a vocational internship program with local mechanics, have police meet with youth leaders.”) By moving from the specific to the general (Steps 1 to 3) and back to the specific (Step 4), the Circle Chart helps to generate a much richer and more systematic array of options than simply trying to think of one answer to the initial problem.
- Look Through the Eyes of Different Experts: Examine the problem from the perspective of various professions. A custody dispute, for example, would look different to a banker (focusing on financial support), a child psychologist (focusing on emotional stability), an educator (focusing on schooling), or a lawyer (focusing on legal rights). Each perspective can generate a unique set of options.
- Invent Agreements of Different Strengths: If you cannot reach a comprehensive, permanent agreement, consider weaker or partial versions. A “second-order agreement” is to agree on where you disagree. You can also explore provisional, interim, or contingent agreements. This creates a spectrum of possible outcomes, from “agreeing on a process for resolving the dispute” to “a full, final settlement.”
- Change the Scope of the Proposed Agreement: You can “fractionate” a large problem into smaller, more manageable parts, or you can enlarge the scope to “sweeten the pot” by bringing in other issues where trade-offs might be possible.
3. Search for Mutual Gain: This is the direct response to the fixed-pie assumption. It involves actively looking for solutions that are not just acceptable to both sides, but actively good for both.
- Identify Shared Interests: In every negotiation, there are latent shared interests. The landlord and tenant both want a stable, well-maintained building. The company and the union both want the business to be profitable and survive. The task is to make these shared interests explicit and frame them as shared goals. This reframes the negotiation from a contest between “us” and “them” to a collaboration of “we” against a common problem. Stressing shared interests creates a positive, more amicable atmosphere conducive to problem-solving.
- Dovetail Differing Interests: This is the most creative and powerful aspect of searching for mutual gain. It recognizes that differences are not obstacles but opportunities for trade-offs. Agreement is often based on disagreement. The buyer of a stock believes the price will go up; the seller believes it will go down. This difference in belief is what makes a deal possible. The book identifies several types of differences that can be dovetailed:
- Different Interests: The classic orange peel/fruit example. One party values one thing, the other values something else.
- Different Beliefs: Two partners who disagree on the future success of a venture can agree to a contingent deal where compensation is tied to actual results.
- Different Values Placed on Time: One party may be willing to pay more if they can pay later (an installment plan), which benefits a seller who gets a higher total price.
- Different Forecasts: A baseball star who is confident in his performance can agree to a lower base salary in exchange for a large performance bonus.
- Different Aversions to Risk: In the Law of the Sea negotiations, mining companies (risk-averse) were willing to pay higher fees later, after their initial investment was recovered, which suited the international community (more interested in revenue than risk).
To find these dovetailing opportunities, you can invent several options that are of equal value to you and then ask the other side which one they prefer. Their preference reveals what they value more, providing crucial information for crafting even better packages.
4. Make Their Decision Easy: This technique counters the shortsighted tendency to focus only on your own problems. Since your success depends on their decision, you must make that decision as easy as possible for them.
- Focus on One Person: Don’t try to persuade an abstract organization like “the company.” Focus on the human being you are negotiating with. What pressures are they under? How can you help them look good to their constituents? Your job may be to provide them with the arguments they will need to sell the agreement to their boss.
- Craft a “Yesable Proposition”: Many negotiations stall because what is being asked is vague or complex. To make their decision easy, frame your proposal as a simple, clear, and operational proposition to which the single word “yes” is a sufficient and realistic answer. Draft a potential agreement and refine it until it is clear, comprehensive, and appealing from their perspective.
- Use Legitimacy and Precedent: It is easier for someone to agree to a proposal that seems fair, right, and consistent with past practice or objective standards. If they can justify their decision based on precedent or an independent benchmark, it is much easier for them to say yes and defend that decision to others. This reduces the sense that they are “backing down” to your will.
- Highlight the Positive Consequences of Agreeing: Rather than focusing on threats of what will happen if they don’t agree, focus on making the offer more attractive. What are the specific things they would like? Can you invent a solution that is low-cost to you but high-benefit to them, and offer it as a way to seal the deal?
In conclusion, “Invent Options for Mutual Gain” is the heart of value creation in negotiation. It is a disciplined process that requires a conscious decision to suspend judgment, to think broadly, to look for shared and differing interests, and to empathize with the decision-making challenge faced by the other side. By mastering these techniques, a negotiator can break free from the constraints of positional bargaining and discover elegant solutions that are not only wiser and more durable but also significantly more profitable for both parties.