When entrepreneurs negotiate with other parties to get a deal done, they often have two key ideas guiding them:
• I need to come out of the process a winner, and
• It’s not my concern if the other side doesn’t get what it wants.
But here’s the thing: This approach to negotiating could be holding you back from maximizing your positive results. If you want to come away with the best deals possible now and down the road, you’ll probably get there when you ensure everyone is a winner.
You do want and need to emerge as a winner in a negotiation. That part makes sense, as you don’t become extremely successful by making bad deals for you. The other idea—that you shouldn’t be too worried about the other side getting what it wants—can be problematic. An “I win, you…whatever” attitude can put unnecessary limits on your success.
A Recipe For Long-Term Success
During the past decade, we’ve extensively examined the negotiation orientation and skills of self-made millionaires and the entrepreneurial super-rich who are self-made business owners with a net worth of $500 million or more.
We uncovered that the entrepreneurial super-rich and the most successful self-made millionaires work very hard to get all sides, not just themselves, to walk away from the negotiating table as winners. What’s more, it becomes incrementally easier to become wealthy, especially extremely wealthy, when you and the other side come out of negotiations as winners.
The self-made millionaires are unconcerned with the outcomes of their counterparties were not as successful at deal-making as those concerned. Those who fostered a true win-win mentality and actively worked to achieve that outcome tended to end up with more business opportunities over time and regularly got more, usually a lot more, from the people they worked with and negotiated with.
Frank Carone, chairman of Oaktree Solutions and co-author of Everyone Wins! How You Can Enhance and Optimize Business Relationships Just Like Ultra-Wealthy Entrepreneurs, explains it this way: “Embracing a win-win mentality—working hard to communicate your position and understand the other side’s position—motivates people to keep doing business and deals with you. Ultimately, that can add to much greater wealth than a one-and-done mentality.”
For the entrepreneurial super-rich, adroit deal-making is fundamental. Their reputations in this regard are significant. Being seen as fair, open-minded, and reasonable tends to help ensure they get what they need (and a substantial amount of what they want) when negotiating.
Of course, some among the entrepreneurial super-rich don’t take this approach. They prefer some form of manipulation or leveraging of their power to force a deal that only meets their needs. These are the toxic narcissists, the sub-clinically psychopathic, and the destructively Machiavellian business owners. “Some extremely wealthy business owners play games and may even get a charge out of getting something over on someone,” says Carone. “But they are a relatively small percentage of business owners, and karma often has a way of evening the score. For instance, I’ve seen these people lose out because other business owners heard how they operate and avoided them. Most of the time, they never knew they missed a great opportunity.”
The lesson from these highly successful entrepreneurs is clear. While any deal you make has to get you the desired outcomes, it should also be structured so the other side can walk away as a winner. This win-win approach is not just an honorable and decent thing to do; it’s very smart business.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He is a strategist for family offices and the ultra-wealthy.