Transformational -v- Transactional Negotiations

In most negotiations everyone knows exactly what they’re talking about. The defining elements of the situation are relatively stable and the discussions are relatively predictable. These tend to be transactional, negotiations that follow rules and trade compromises; our culture’s default setting.

This type of negotiation is referred to as ‘transactional’ because they’re essentially about trading or exchanging ideas, positions or things of value. Beneficial transactional negotiations provide a context in which participants can exchange ideas and perspectives that expand the stable common ground on which they can work together.

However, whilst transactional negotiations are good for maintaining the status quo, they can easily become dysfunctional as the parties trade compromises and eventually work to the common lowest denominator, with both parties focusing on making sure the other does not ‘win’.

Transformational negotiations, on the other hand, are about creating something new. At the point the parties enter a transformational negotiation they don’t know what the outcome will be. The outcome will be created by jointly melding and building on ideas to create new possibilities that were unthinkable at the start. This is both an exciting and a frightening place to go, everyone needs to actively let go of preconceptions and open up to the possibilities crated by ‘not knowing’ and ‘not controlling’.

As a group, the parties need to accept that:

  • We don’t know what solution we’re going to get here: Once our co-creativity gets rolling, new third-way solutions are virtually inevitable. We can create together more choices in our approach to the problem (new options).
  • We don’t actually know what topic we’re talking about or what problem we’re trying to solve: The stated topic or problem will probably shift during the conversation as the decks get cleared for more basic topics or problems to emerge. New choices become available because we’ve deepened our understanding of the situation we’re addressing (reframing the problem).
  • We don’t know who we will be at the end of the negotiation: All of us may change, not only individually, but in our relationships to each other and to our situation and its context (choice creating).

To allow these open-ended questions, there needs to be a high level of mutual trust and respect. The trust allows a better outcome to be developed by reframing the problems and building a combined future together.

These guidelines are not hard and fast; negotiations can be more or less transactional, however, it is the openness generated by people intentionally not-knowing that increases their transformative power. Any assumptions, circumstances, processes or facilitation methods that restrict these open-ended questions, will restrict the capacity of the negotiation to be transformational.

For more on negotiation, see our White Paper WP1024 – Negotiating and Mediating


2 responses to “Transformational -v- Transactional Negotiations

  1. Very good post, I didn’t know these different types of negotiation concepts,

    Best Regards

  2. Yes. Simply put the “transformation” changes people.

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