Honesty that pays off. Why we build negotiations on relationships and win-win

Oct 12

Written by NESSE

NESSE graphic: Honesty that pays off. Why we build negotiations on relationships and win-win

The best negotiations are the ones after which both sides want to meet again. Not because they “have to”, but because it is worth it. In this article we explain why honesty and a friendly relationship don’t weaken your negotiating position but strengthen it, what a win-win strategy pays off in practice, and why at NESSE we have built our training, client conversations and cooperation with partners on it for years.

We all negotiate every day. With a client about price and deadlines, with a supplier about payment terms, with the team about priorities, with the boss about the budget, and at home about who picks the kids up from school. Even so, for many people the word “negotiation” still conjures up a battlefield: a table with opponents sitting at it, bluffing, a poker face and the rule that “whoever blinks first loses”.

In our training we often start with a simple question: “When did you last come out of a negotiation feeling that the other side had helped you?”. The room goes quiet. And then the stories begin: about a supplier who suggested a cheaper solution themselves, about a client who extended the contract without a tender because “you’re just good to work with”, about a partner who postponed a payment deadline during a crisis because they remembered someone once did the same for them.

These stories have a common denominator. Behind each of them is a relationship built on honesty and goodwill. And that is what this text is about.

The myth of the tough negotiator

The image of a negotiator who “crushes” the other side thrives in films, in guides to “sales tricks” and in stories over coffee. It looks impressive: someone squeezed out a discount, someone forced through a contractual penalty, someone “won”. The problem is that this is a snapshot taken in a single second. It doesn’t show what happens next.

And what usually happens next is one of four things:

The other side looks for payback. A supplier squeezed below profitability makes up for it in quality, deadlines or “additional services” that are suddenly no longer included in the price.
The contract lives on paper, not in practice. The side that feels defeated delivers exactly what it has to, and not a millimetre more. Flexibility disappears, goodwill disappears.
The relationship ends. A client who felt manipulated leaves for a competitor at the first opportunity. Often without a word of explanation.
The market finds out. The industry is smaller than it seems. A reputation as a “hard-liner who can’t be trusted” arrives at the next meetings before we do.

In purely financial terms, winning at the other side’s expense is often a loan at a high interest rate. Today we gain a few points of discount; tomorrow we pay for them with the costs of monitoring, renegotiation, disputes or finding a new partner.

We’re not saying that hard negotiation never makes sense. There are one-off situations in which the relationship doesn’t matter and the only thing at stake is price. But in business these are exceptions. The vast majority of our conversations are episodes of a long series, not a single film.

Honesty as currency

In negotiations we exchange not only money, deadlines and terms. Above all, we exchange information. And how much information the other side entrusts to us depends on one thing: whether they trust us.

When a partner believes we won’t use their openness against them, they tell us what really matters to them. That the deadline matters more than the price. That the board judges them on quality, not on the discount. That they have a budget but must spend it by the end of the quarter. Every piece of information like this is material for a better agreement. Without trust, both sides play blind, hide their cards and leave value on the table that they could have used together.

Honesty in negotiation doesn’t mean naivety or laying all your cards on the table from the first minute. It means a few simple rules:

We don’t lie. We may not reveal everything, but what we say is true.
We don’t promise what we can’t deliver. Better to promise less and do more than the other way round.
We don’t manipulate. Artificial time pressure, a fictitious competing offer, “I still need to check with my boss” when there is no boss involved – these are tools that work once.
We keep our word, even when it stops paying off. That is exactly when a real reputation is built.

Game theory has long described what practitioners know from experience. In Robert Axelrod’s famous tournaments, in which computer programs played the “prisoner’s dilemma” many times over, the best results came from the simple “tit for tat” strategy: start by cooperating, respond to what the other side does, and forgive quickly. The conclusion is simple: when the game is repeated, honesty stops being a cost and becomes an investment.

Reputation works like capital. It takes years to build and can be lost in one sentence. That is why at NESSE we treat it as the most valuable asset we have.

A friendly relationship isn’t softness

The most common concern we hear from training participants is: “If I’m nice, they’ll take advantage of me”. That’s understandable, but it rests on confusing two different things: how we treat people and how we treat the issue.

Roger Fisher and William Ury of the Harvard Negotiation Project captured this in a principle that has been the foundation of modern negotiation for decades: separate the people from the problem. You can be warm, kind and attentive towards the person on the other side of the table and at the same time consistent, firm and demanding on the issue being negotiated. What’s more, that very combination is the most effective.

In practice it looks like this:

Towards people: soft

Respect, courtesy, keeping your word
Curiosity about the other side’s needs and constraints
Understanding emotions, including difficult ones
Willingness to look for solutions together

Towards the issue: hard

Clear boundaries and values we won’t go below
Concrete arguments and objective criteria
Consistency on agreements and deadlines
Every concession in exchange for something, never “for free”

A friendly relationship doesn’t mean agreeing to everything. It means that we can disagree and still trust each other. It is precisely a good relationship that lets you say “no” without breaking off the conversation, set a difficult condition without causing offence and get through a crisis without looking for someone to blame.

There is also a second, often overlooked aspect. People make decisions not only with reason but also with emotions. A partner who feels listened to and respected is more open, more creative and more willing to compromise. A partner who feels attacked defends themselves – and a person on the defensive stops looking for solutions.

What a win-win strategy pays off

Win-win is sometimes treated as a nice slogan from a presentation. For us it is a very concrete calculation. An agreement in which both sides gain pays off on several levels at once.

1. A bigger cake to share. “I win, you lose” negotiations assume that the cake has a fixed size and the only question is who gets the bigger slice. Yet the parties almost always differ in what they value. One needs a fast deadline more, the other predictable payments. One wants a lower unit price, the other a larger volume. When we look for such differences, we can trade what is cheap for us but valuable for the partner. Both sides get more than they would in hard bargaining.

2. Contracts that get implemented, not just signed. An agreement the other side considers fair is implemented with commitment. There are fewer disputes over interpretation, fewer “loopholes” and lower monitoring costs.

3. Faster and cheaper future negotiations. When partners trust each other, they don’t have to start from scratch each time, test each other and secure every comma. A conversation about extending the cooperation takes an hour, not three months.

4. Loyalty and referrals. A satisfied client comes back. More importantly, they recommend you. In trust-based services such as training, consulting or coaching, a recommendation from a satisfied partner is worth more than the best marketing campaign.

5. Flexibility in a crisis. The market changes, plans fall apart, unforeseen situations arise. A partner with whom we have a good relationship looks for a solution with us. A partner we once “defeated” reaches for the contract and calculates the penalties.

6. Creating value together. Over time, a relationship based on trust stops being a transaction and becomes a partnership. Partners share ideas, develop products together and act as an extension of each other’s teams.

7. Peace of mind and well-being. We rarely talk about it, but it’s a very real benefit. Negotiating in battle mode is exhausting: it requires constant vigilance, remembering what you told whom, and living under tension. Negotiating honestly lets you be yourself. And that translates into better decisions and less burnout.

In short: a hard win gives a one-off gain. Win-win gives a gain that compounds, like compound interest.

How to do it in practice

Win-win doesn’t happen by itself and doesn’t result from good intentions alone. It is a skill you can practise. Here are the elements we focus on in our training.

Preparation is half the battle

Most negotiations are won or lost before the parties sit down at the table. Before we start the conversation, we answer a few questions: What do we really need? What matters to us, and what can we give away? What might the other side need? What constraints, pressures and goals do they have? Who makes the decision on their side?

Interests, not positions

A position is what someone demands: “I want a 15% discount.” An interest is why they demand it: “I have to stay within a budget that the board has cut by 10%.” Positions exclude each other; interests rarely do. A discount is only one way to the goal. Perhaps spreading payments into instalments, changing the scope or moving part of the service into the next budget year would be enough.

Questions instead of statements

A negotiator’s most valuable tool isn’t an argument, but a question. “What matters most to you in this project?”, “What would have to happen for you to consider this cooperation a success?”, “What makes this amount your limit?”. Good questions open up a space that argument alone will never open. And actively listening to the answers is the simplest way to show respect.

Expanding the cake

Instead of negotiating one variable (usually price), we bring many into the conversation: deadline, scope, volume, payment terms, guarantee, post-implementation support, contract length, references. The more variables, the more possible exchanges that benefit both sides. The golden rule: nothing is agreed until everything is agreed, and we exchange every concession for something of value to us.

Objective criteria

Instead of a tug of war (“my price is better than yours”), we look for a common point of reference: market rates, industry benchmarks, costs, previous agreements. An agreement based on an objective criterion is easier to accept without feeling that you have lost.

A strong alternative: BATNA

A win-win approach doesn’t mean we have to reach an agreement at any cost. We know our best alternative to a negotiated agreement (BATNA) well: what we will do if we don’t reach a deal. The better our alternative, the more calmly we can be friendly – because we aren’t negotiating from a position of desperation.

Adapting to the other person’s style

People differ in what they need to feel safe in a conversation. Someone with an analytical style needs data, time and precision. A driving style – specifics, pace and a sense of control. An expressive style – enthusiasm, vision and relationship. An amiable style – calm, trust and the certainty that nobody will get hurt. The same honest proposal presented in the other person’s language has a much greater chance of being accepted. This isn’t manipulation, but courtesy: we speak so that the other side can hear us.

A close that builds the relationship

At the end we write down the agreements clearly and without ambiguity, check that both sides understand them in the same way, and make sure the partner leaves the conversation having saved face. Good negotiations end not only with a signature, but with the feeling: “that was a good conversation”.

What if the other side plays hard?

This question comes up in every training session, and it is entirely justified. Not every partner shares our approach. Some negotiators treat kindness as weakness and use pressure, ultimatums or “good cop, bad cop” tactics. What then?

First: friendliness isn’t defencelessness. We can remain polite and at the same time be very firm. An honest negotiator doesn’t have to answer manipulation with manipulation, but doesn’t have to pretend not to see it either.

Second: we name what is happening. A calm sentence such as “I have the impression we’re now talking under time pressure that doesn’t serve either side. I suggest we go back to what matters to both of us” often disarms a tactic more effectively than a counter-attack.

Third: reciprocity. We start by cooperating, but we don’t give anything away for free. If the other side doesn’t respond to our openness, we share information more cautiously and link every concession to a specific concession from the partner. At the same time, we leave the door open to returning to cooperation.

Fourth: we go back to criteria and alternatives. Hard play loses its power when the conversation revolves around objective data and we calmly know what we will do if there is no agreement.

And finally: we have the right to walk away from the table. Sometimes the best outcome of a negotiation is no agreement. It’s better to politely say thank you than to sign a contract that will chafe for years. Interestingly, partners who see that we can walk away with class often come back – with a different attitude.

Why we believe in it at NESSE

We don’t teach win-win because it sounds nice. We teach it because that is how we work ourselves, and we see how it works.

Because that’s how we build our own company. We have worked with many clients for years. These relationships didn’t come about thanks to the lowest price or aggressive selling. They came about because we keep our word, say plainly what can be expected of us and, when necessary, can say: “you don’t need this training right now”. Such honesty sometimes costs in the short term, but it always pays off in the long term.

Because we see it in the training room. We work with salespeople, buyers, managers and boards. Time and again we observe the same moment: when participants in an exercise stop treating their partner as an opponent and start asking about their interests, the results for both sides improve. Solutions appear on the flipchart that nobody saw at the start. For us, this is the best proof that win-win isn’t a half-hearted compromise, but the art of creating value.

Because we believe in mature decisions in business. Maturity is the ability to look beyond today’s result. It is the capacity to look after your own interest without trampling on someone else’s. It is the courage to be honest even when nobody is checking.

Because relationships are the most lasting capital. Products change, prices change, technologies change. Trust between people remains. A company with a network of partners ready to vouch for it is more resilient to any crisis.

And finally, because it’s simply a better way to live. We work with people we like and respect, and they know they can count on us. It’s hard to find a better definition of success in business.

Finally: a few questions to ask yourself

Negotiation isn’t a duel, but joint problem-solving by people who have different interests but often the same goal: business done well. Honesty creates trust, trust creates information, information creates better agreements, and better agreements create lasting relationships. It’s a wheel that drives itself.

Before your next important conversation, we encourage you to ask yourself a few questions:

What does the person on the other side really need, and how can I find out?
What is cheap for me but valuable for them, and vice versa?
What three questions will I ask before I present my proposal?
Where is my limit, and what is my best alternative?
How do I want my partner to talk about this conversation a year from now?

If the answer to the last question is “you can always reach an agreement with them”, you are on the right track. That is exactly what we wish for you and your partners.

Anna Wodyńska and Adam Matysiak, NESSE