Parties negotiate hoping to achieve a good deal for themselves. Just when they think they are done, one party airs a concern much to the surprise of the other party. Mediators refer to this phenomenon as “the last gap” or the “last 10 percent” in negotiations. They attribute the pause to the parties being unable to let go of the conflict and wanting something more as insurance they got the best deal.
Deals are thwarted when parties are unprepared to close the last gap and move the deal forward. That hurts after a long day of negotiating.
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Four Tips to Close the Last Gap:
- Be prepared to close the last gap in negotiation.
- Negotiate creatively at this late stage to address the needs of holdouts adequately.
- Use a mutual gains approach with Low Cost/High Benefit trades (tangible or intangible). Trades are mutually beneficial and Low Cost on behalf of the Giver and High Benefit to the Receiver.
- Sign the deal.
A Sustainable Case Example Using Mutual Gains:
The Developer, Local Community and a High Rise Building
Consider this scenario:
A new brick high rise building recently approved by the City Council continues to frustrate the Local Community. In their minds, they believe they’ve lost additional leverage with the Developer due to the approval and they will be forced to live with the consequences of another tall heat-emitting building on a congested landscape that will add to the changing character of their quaint walkable city.
The Community has been engaged with the Developer throughout the project and had a good working relationship in the past. In the current offer, the Developer has faithfully met a list of their interests including a height reduction, building material enhancements and compensatory mitigation. However, doubts are surfacing again over the towering building and the Community hesitates to let go of the conflict and sign the agreement.
The Developer recognizes that there could be short and long-term repercussions to the project if the Community is not satisfied and remains unwilling to sign off on the deal. Repercussions to the Developer include litigation, project delays, financial burdens and a tarnished reputation in the community and on any future projects. What can be done to close the last gap?
A new sustainable strategy using the mutual gains approach:
The Developer learned the mutual gains approach in a good negotiation course and is confident it will help in this negotiation. The Developer believes it could seal the deal and close this last gap with an offer that will not be that costly. Better yet, the offer is based on sustainable environmental principles, which the Community is bound to favor based on past collaborative discussions.
Having observed the treeless landscape on the block of the future location of the high rise and surrounding buildings driving into the city for meetings regularly, the Developer has a new and creative offer to propose.
The Community had aired a few comments throughout the negotiations that the steady rise of taller buildings will supplant their quaint streetscape and evokes an impersonal ambience. The cumulative effects of the heat-emitting hardscape composed of concrete sidewalks, black tarmac streets, and faceless buildings towering over them provides little natural shade and comforts for their quaint pedestrian livable community.
The Developer actively listened and noted the Community’s less-aired frustrations throughout the negotiations and agrees that good-sized trees are scarce on city blocks.
The additional offer:
The Developer puts the mutual gains approach to work with an additional Low cost/High benefit offer to the Community to close the last gap:
The Developer offers to plant trees of a decent height to create shade around the building and human comforts inclusive of benches and a water fountain. The Developer had calculated similar costs of these amenities on other projects and concluded that the overall cost of that investment was low when compared to project delays, the prospect of litigation, and other financial burdens.
Good standing in the Community is also important to the Developer. Everyone worked hard on finding agreeable solutions around the development and the community even volunteered to enforce certain conditions in the agreement for the Developer. A gesture of good with the additional offer even though the City Council approved the project will strengthen the Developer’s relationship and social capital with the community. That will also come in handy if the Developer decides to compete on future projects in the city because community input will be required.
The Local Community is attracted to the high value offer that incorporates sustainable environmental principles and comfortable amenities that have long-term benefits: trees for natural shade, benches for rest and a water fountain to cool them off. All aspects of the add-on offer enhances their quality of living and the pedestrian friendly aesthetic.
Positive closure:
The Community accepted the additional offer from the Developer and signed the agreement. The project moved forward. An additional win for the Developer is the building will be more attractive from to prospective buyers in the future. The beauty of the mutual gains approach paid off. The parties closed the last gap.
Six Case Takeaways on Closing the Last Gap:
- Be aware of the last gap in negotiations and be prepared to close it.
- Actively listen and learn things about each other and what interests and concerns everyone before and during the negotiation. Internet research can also help.
- Present an offer that satisfies everyone’s interest adequately.
- Use a mutual gains approach that places emphasis on Low cost/High benefit trades.
- Close the last gap with an offer that the other side won’t refuse, meets everyone’s interests and does not break your bank.
- Incorporate sustainable principles and good-will gestures that have short and long-term benefits to people, the environment and progress.
Next time you’re asked, “What else can you do for me to close this deal?” You’ll be prepared to answer.
A mutual gains approach that focuses on Low cost/High benefit trades facilitates deal-making with good trades and good-will.
Curious about the strategies Athena Agreements uses to forge consensus and drive results? Learn more about our approach at https://www.athenaagreements.com/
