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Managing Trade-offs
The ability to identify value-creating exchanges where you give what's less valuable to you for what's more valuable.
Understanding the skill
Why this matters
- Tradeoffs create mutual benefit where pure compromise creates mutual loss.
- You find deals that seem impossible if you keep fighting the same way.
- Both sides get more when you find tradeoffs instead of splitting differences.
What goes wrong
- Assuming it's zero-sum so tradeoffs aren't possible.
- Not understanding what each side actually values.
- Offering tradeoffs that don't actually trade value, just split the pie.
Best practices
- Ask: What do they value more than we do?
- Identify what you value more than they do.
- Trade high-value-to-them for high-value-to-you.
Further reading
Getting to Yes: Negotiating Agreement Without Giving In
Roger Fisher, William Ury, Bruce Patton
2011
Thinking, Fast and Slow
Daniel Kahneman
2013
Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
Annie Duke
2018
Smart Choices: A Practical Guide to Making Better Decisions
John S. Hammond, Ralph L. Keeney, Howard Raiffa
1999