In negotiations, the default move is often to split the difference. Each side concedes a bit, and the deal moves forward. But this approach usually leaves both parties with less than they could have achieved.
The ABN curriculum makes a sharp distinction here. Compromise assumes a fixed amount of value that must be divided. Mutual value focuses on finding trades where both sides get more of what they actually care about. The result is a larger pie, not just a different slice.
Why Compromise Falls Short
Compromise works when the only options are the original positions. In practice, most negotiations have more variables than price or terms. When you focus only on the obvious ask, you miss the underlying needs that could unlock better outcomes for everyone.
Consider a basic example: one party needs an orange peel for a recipe while the other wants the fruit to eat. Cutting the orange in half satisfies neither fully. Understanding the real need on each side reveals a solution where both get the part they value most.
How to Build Mutual Value
Begin with clarity on your own target in absolute profit dollars. Then shift attention to what your counterpart values most. The space between those answers is where the best deals are built. This often involves trading something low-cost to you for high-value to them, or discovering non-price levers like exclusivity, timing, or support that move the needle for both sides.
Information accelerates this process. The more you understand their situation, constraints, and priorities, the more precise your questions become and the more creative the solutions.
From the Table: A $4M Deal Example
In one negotiation, a large purchase included $600K of inventory that created internal approval problems. By identifying a single high-demand SKU the buyer could feature exclusively, both sides addressed their core issues. The buyer gained a strong performer, and the seller cleared aging stock while securing a long-term relationship. First-year revenue reached $30M. Neither side received their initial position, but both achieved their real objectives.
Practical takeaway: Before any concession, identify what the other side values that you can provide at low relative cost.
Want the framework behind this? Download the free 5 Laws of Negotiation ebook: 5laws.negotiationsacademy.com
