Value is created (or the "pie is enlarged") in negotiations through the cooperative process of integrative or interest-based bargaining. This means that the parties in a dispute have managed to find ways to increase the amount of beneficial goods (things they want or that will make their situation better than before) that will be divided between them. This may also be called "joint value" or "joint gains," meaning that new developments are considered improvements by both sides.
The primary way to create value is to focus on the underlying interests of the disputing parties -- why do they want what they want? By sharing information openly and communicating with one another, the parties work to find shared interests and create joint value. Creating value makes it more likely that both sides will get something they want out of the negotiation. This type of mutually-beneficial outcome is called a "win-win" solution.