Have you ever wondered how to get the best results in a negotiation? Both parties come to the table with their needs and both want what they want. It can be easy to get flustered during the process. The key to a successful negotiation is to weigh all of your options fully so that you can be as prepared as possible.
Enter MESO’s Method:
MESO stands for Multiple Equivalent Simultaneous Offers. The theory behind MESOs is to give the other party multiple options to choose from that are all equivalent from your standpoint. This approach to negotiation is not only backed up by academic research, it tends to feel a lot less stressful in high-stakes negotiations.
Here’s how you create MESOs:
Scenario: You’re the CEO of a growing music company and you’re making a job offer to a VP of sales candidate. You could do it the standard way with a single offer, or you could try giving the candidate multiple options, or MESOs.
1. Create a list.
Make a list of all the issues that matter to both parties. For the job offer, let’s say the variables that matter to both sides are salary, commission, equity and vacation time. (There may be other variables, like the size of the sales team budget, but let’s keep this simple for the sake of this example.)
2. Weigh each option.
Estimate how important these issues are for each party. From your interviews, you gather that the VP of sales candidate really values “upside” from equity and commission but also supports a family and needs a healthy salary. You’re guessing they’re less concerned with vacation time. On your end, let’s say you care about managing cash (i.e. needs to keep a lid on salary), maintaining a “work hard” culture (i.e. has a bias against too much vacation) and achieving valuation milestones for investors (i.e. is open to being generous with commission and equity if it’s tied to results).
3. Think about alternatives.
Identify realistic possible alternatives for each issue. Given these preferences, let’s imagine the realistic alternatives for equity are 1 percent, 2 percent or 3 percent of company shares (with four-year vesting of course) depending on the rest of the package. For vacation time, the alternatives are the standard two weeks vacation, with the possibility for three or four weeks if that were important to the candidate, which it isn’t in this case. Let’s say there are a two or three alternative salaries and commission structures, too.
4. Narrow down the choices.
Finally, create three alternative offers that would be compelling to the other party and are mutually equivalent from your standpoint. For example, one compensation package might include 3 percent equity but with a lower salary, standard vacation time, and moderated commission structure. Another might include 2 percent equity with a medium salary, standard vacation time and a generous commission structure. The third might include 1 percent equity with standard vacation time, as rich a salary as you can afford, and a generous commission plan.
That’s how you create the plan! This might seem belabored, but there are a number of benefits to this approach. The MESO technique makes you appear more flexible, increases the overall odds of reaching an agreement and makes it easier to collect information about the other side’s preferences. By offering three alternatives instead of one, you powerfully frame where there are trade-offs. Plus, the process of creating MESOs forces you to do your homework in evaluating and prioritizing all the issues.