Say there’s a banana and two people who want it. From the outset, each person says they need the whole banana, and they’re at an impasse because it can’t be split. If both people talk it out, however, they might discover one person needs the whole inside of the banana because they’re making a smoothie, and the other person wants the entire peel for the floor to replicate a classic comedy sketch. Voilá—win-win.

As I learned during a course at Harvard Negotiation Institute – as well as through my 20+ years working with partners and customers – not all negotiations are this simple, but there is often a way each party can get what they’re wanting.

By keeping in mind these five steps, you’ll likely generate better deals and help both parties feel better during and after the negotiating process.

Aim for the win-win: We negotiate with potential business partners all the time, and our win-win culture dictates that we aim for win-win negotiations, like the banana/peel scenario. There are plenty of companies that when a first agreement goes out, they’ll try to put all the risk on the other party. That’s not win-win. In our agreements, we try to assign risks fairly based on control, benefit, etc.

That being said, win-win doesn’t mean getting walked over. That would mean win-lose.

By keeping in mind these five steps to successful negotiations, you’ll likely generate better deals and help both parties feel better during and after the negotiating process.
By keeping in mind these five steps to successful negotiations, you’ll likely generate better deals and help both parties feel better during and after the negotiating process.

I also think fairness is a big part of negotiating. This is important because you’ll have ongoing relationships with people in the future. People don’t stay at the same company for 20 years, so you might be doing business with them in the future at another organization. Your reputation on this deal could determine your ability to do business with them at a later stage with a completely different company. And, if you treated them respectfully the first time, that person may allow you to have a win-win situation even though the circumstances aren’t in your favor.

Do your research. A big part of negotiating is being prepared. You first need to know what you’re trying to get out it. Get together with your team, define what you want and what they think would be a good outcome for the upcoming negotiation. Then, try to figure out what the negotiating party is looking for. You’ll typically have multiple people within your company who have interacted with them. Ask them to offer opinions on what they think the negotiating party’s goals are. Ask them what they know about the company’s culture. More knowledge will help you once the negotiating gets underway.

Listen. It’s easy when you start negotiating to sit down and say, “Let’s get to it.” But while you need to do preparation beforehand, it’s critical once you get into the negotiations to gather more information before diving into the actual bargaining. You need to truly understand what the negotiating party is trying to get. This is easy: just ask open-ended questions. If you assumed you had a weak bargaining spot, you might find out your position is stronger than you think or vice versa. Sometimes you can even find out information that can be beneficial for both parties.

Know the best alternative. It’s critical in negotiating to understand your top alternative to a negotiated agreement in order to determine what’s the worst you’re willing to accept. If you think about it, people do it already. You typically go into buying a car thinking you’re not going to pay more than X dollars or that your monthly payment will be no more than X dollars. So, if that’s your line in the sand, you know if you walk away from the negotiation that your current car—or walking—is your best alternative.

You never want to agree to something that’s worse than not doing anything. On the flip side, it’s important to understand the negotiating party’s top alternative to an agreement. You need to know what makes sense for them to accept so that you’re not wasting time presenting them something that’s clearly less attractive than no agreement at all.

Give them a story to tell. Beyond figuring out win-win, take it a step further and think about the message the negotiating party is going to take back to his or her boss. You can essentially help them write their winning speech. In the negotiation you can say something such as, “John, if you agree to this you’ll be able to go back and say you got X, Y and Z from me.” Spelling it out makes a person more likely to accept it because they may be focusing too much on the complexity of the deal. While they may or may not have gotten everything they wanted, you’re able to both give them enough and then help them tell the positive aspects of it to their leaders.

A final thought. You’ll notice throughout this piece I referred to the alternate party as the “negotiating party.” It’s important to keep a positive reference in your mind and not think of them as “the other side” or “your opponent.” You’re not enemies. You’re getting together to do business, which could potentially benefit both groups and generate more value for the world.

Happy haggling.