Size does not equal strength
“Most people don’t know what they’re negotiating about – and that’s where the problem begins.”
Barry Nalebuff has been a Professor at the Yale School of Management for over 30 years, where he teaches negotiation strategies and game theory. His new book on negotiation is called Split the Pie.
Key Take-Aways: Negotiation Excellence and the Myth of Size
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Understanding the negotiation pie: focus on the extra value created together, not the total sum.
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Equal contribution principle: both parties are needed for the deal, so gains should often be shared equally.
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Strength ≠ size: larger resources do not automatically translate into negotiation leverage.
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Creative deal structuring: pre-agree on splitting uncertain future gains (e.g., 50/50), determined retrospectively.
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Real-world application: even small players can secure fair terms when their contribution is essential, as shown in property deals and Honest Tea’s partnership with Coca-Cola.
The article is part of our magazine issue Achieving Cost Excellence.
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When negotiations succeed, it is rarely by chance. Their outcome is largely determined by thorough preparation from early alignment with internal stakeholders and clear business objectives to a solid understanding of the market and supplier landscape. Competitive dynamics, behavioral insights from psychology and game theory, and a company’s reputation all shape the room for maneuver at the negotiation table.
In an interview with Barry Nalebuff, Professor at Yale School of Management, negotiations are framed as a question of value creation rather than power, with cooperation and data-driven analysis enabling fairer, more sustainable outcomes.
Negotiations with strong brands require a partnership mindset and rigorous preparation. By focusing on shared interests, objective criteria, and long-term value creation rather than positional power, procurement teams can expand the zone of possible agreement and reach sustainable compromises where both sides benefit.
Successful cross-cultural negotiations require flexibility rather than fixed assumptions. Understanding local communication styles, decision-making norms, and the importance of relationships allows negotiators to build trust, avoid friction, and reach sustainable agreements across borders.
In an interview with negotiation expert Matthias Schranner, former crisis negotiator with the police and FBI, emotions are highlighted as a major barrier. Effective negotiators reduce pressure, focus on shared interests, and use clear, constructive questions to steer discussions away from conflict and toward sustainable, mutually beneficial agreements.
In an interview with Simone Hilbrig, Managing Director at Inverto, the focus is on how culture, courage, and inclusion drive sustainable success. Empowering people, challenging traditional structures, and embracing diversity strengthen leadership, improve performance, and enable more resilient business models.
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