The Elements of Negotiation

ELEMENT 36Prioritizing Variables: The Key to NegoEconomics

The concept of NegoEconomics is pivotal. It is defined by the creation of asymmetric values or costs, where tasks are strategically placed with the party that bears the lowest cost. This chapter aims to guide negotiators in identifying and prioritizing variables that generate significant NegoEconomics, thereby optimizing negotiation outcomes.

The Trap of Limited Variables

Many negotiations fall into the trap of focusing on a limited set of variables—the “usual suspects” like price, scope, and warranty. This limited view often leads to leaving valuable opportunities on the table. The key is to expand your variable horizon, going beyond the traditional to explore more innovative and impactful variables.

Identifying and Expanding Variables

The first step is to establish current negotiation variables, which typically include price, delivery time, quality, and payment terms. However, this is just the starting point. As noted earlier, a car purchase alone can involve more than 52 variables. In more complex commercial negotiations, the number can be even higher. A “gross list” of potential variables is provided, ranging from project discounts to climate policy and ergonomics, serving as an inspiration for negotiators to think creatively.

Prioritization for NegoEconomics

With a comprehensive list of potential variables, the challenge lies in prioritization. The goal is to identify variables that not only align with strategic ...