Split the Pie summary

So, how does the negotiation pie approach work? Let’s strip things down to the basics. Meet Alice and Bob. They’re sitting at their favorite pizzeria when the waiter makes them an offer. If they can agree how to split a 12-slice pizza, the restaurant will give it to them for free. If they can’t agree, they’ll still get half a pizza, but unevenly split – Alice will get four slices, but Bob only two.

Alice and Bob need to come to an agreement on how to split the twelve slices. There are several ways they can go about it. One is called the power perspective and results in Alice getting eight slices, and Bob four. This reflects the ratio of their fallback option. After all, if they don’t reach a deal, Alice would receive twice as many slices as Bob. The result is meant to reflect Alice’s position of power in the negotiation.

Another approach is called the fairness perspective, where Alice and Bob simply split the pizza in half, with six slices each. Many people would see this as the fairest option.

Both the power and fairness perspectives don’t take into account a very important fact – the negotiation isn’t actually about the whole pizza. Without a deal, they end up with a total of six slices. With one, they get twelve. This means the negotiation is actually only over the six additional slices that a successful deal would result in. It’s these six additional slices that constitute what the author calls the negotiation pie. And when a negotiation starts from this principle, the rationales behind the fairness and power perspectives quickly vanish into thin air.

With the negotiation pie in mind, Alice and Bob realize that they are both equally needed in order to get the six additional slices. This means they have equal power after all. Sure, it seems that Bob is in a weaker position on the surface level. Keep in mind that if they don’t reach a deal, he gets fewer slices than Alice. But in reality, if they don’t reach a deal, Alice and Bob both end up with fewer slices. In other words, they both lose. In order for them to both get more slices, they need each other equally.

Looking at it this way, Alice and Bob have an equal amount of power. And this equal amount of power needs to be reflected in an equal split of the six slices of the negotiation pie. This leaves Alice with her fallback option of four slices plus three from the negotiation pie, leading to a total of seven slices. Bob, on the other hand, takes his two fallback slices and adds three more, netting him five slices. By using the negotiation pie technique, they’re both winners.

Now, some of you might be wondering why splitting the whole pizza 50/50 isn’t the fairest option. Alice and Bob are getting a free pizza here. On closer inspection, though, a 50/50 split isn’t always as fair as it seems. This is because it doesn’t take into account uneven fallback options. For example, imagine the waiter increased Alice’s fallback option from four to seven slices but kept Bob’s at two. In this case, Alice would be losing one slice if they took six slices each. When viewed this way, it turns out 50/50 splits aren’t actually so fair.

Negotiating effectively is all about leaving with more than what you came in with. And by focusing on the negotiation pie, you and your negotiating partner are sure to both walk away happy.