Negotiation Getting to YES

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NegotiationGetting to YES

• RD 300
• 14 19 November 2001

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Negotiation

• A process of communicating back and forth for the
  purpose of reaching a joint decision when you and
  the other side have some interests that are
  shared and others that are opposed.
• Hard versus soft negotiation styles.

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Positional Bargaining

• Most common negotiation style adopted
• each side takes a position, argues for it and
  makes concessions to reach a compromise.
• Problems
• Locks people into their positions.
• Ego becomes attached to your position.
• Focus on positions means less attention is paid
  to the underlying concerns/issues of the parties.

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Positional Bargaining

• Problems (cont.)
• Start with extreme positions try to hold onto
  them make only minor concessions to keep
  negotiation alive.
• This requires a lot of time and effort.
• Becomes a contest of wills.
• Can strain and even shatter relationships.
• The more parties the more difficult.

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• Hard
• Participant as adversaries.
• The goal is victory.
• Demand concessions as a condition of
  relationship.
• Be hard on the problem and the people.
• Distrust others.
• Dig in to your position.
• Make threats.
• Mislead as to your bottom line.
• Demand one-sided gains as the price of agreement.
• The single answer the one you will accept.
• Insist on your position.
• Try to win a contest of wills.
• Apply pressure.

• Soft
• Participants are friends.
• Goal is agreement
• Make concessions to maintain relationship.
• Be soft on the people and the problem.
• Trust others.
• Change your position easily.
• Make offers.
• Disclose your bottom line.
• Accept one-sided losses to reach agreement.
• The single answer the one they will accept.
• Insist on agreement.
• Try to avoid a contest of wills.
• Yield to pressure.

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Principled Negotiation

• Characteristics
• decide issues on their merits.
• look for mutual gains.
• where interests conflict, use fair standards to
  obtain a result.
• can be used whether there is one issue or
  several.
• two parties or many.
• useful in prescribed or impromptu negotiations

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Principled Negotiation

• 4 Key Points
• Separate the people from the problem.
• Focus on interests, not positions.
• Generate a variety of possibilities before
  deciding what to do. Invent options for mutual
  gain.
• Insist that the result be based on some objective
  standard or criteria.

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Principled Negotiation

• Three stages
• Analysis stage diagnose the situation.
• Planning stage generate ideas and decide
  strategy.
• Discussion stage communication back and forth.

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Deal with People Problems

• A negotiator wants to reach an agreement that
• satisfies his/her substantive interests and
• preserves/fosters valued relationships.
• Most negotiations take place in the context of an
  ongoing relationship.
• In some cases the ongoing relationship may be
  more important than the outcome of any particular
  negotiation (e.g. family).

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• We tend to treat the people and the problem as
  one in the same.
• Egos become involved in substantive positions.
• People often draw unfounded inferences from
  comments on substance.

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• Deal with people problems directly dont try to
  solve them with substantive concessions.
• Base the relationship on
• accurate perceptions,
• clear communication
• appropriate emotions
• a forward-looking outlook.

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Types of People Problems

• (1) Perception -
• both parties may agree as to the facts but
  disagree on the preferred outcome.
• we need to be able to see the situation as the
  other side sees it.
• understanding their point of view is not the same
  as agreeing with it. You may however modify your
  own views as a result.

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• Dont
• Even if blaming is justified, it is usually
  counterproductive.
• Dont deduce their intentions from your fears.
  Tendency to put the worst interpretation on what
  the other side says or does.
• Dont treat as unimportant those concerns of the
  other side that you perceive as not standing in
  the way of an agreement.

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• Do
• Discuss each others perceptions.
• Look for opportunities to act inconsistently with
  their preconceptions.
• Involve the other side in the process of reaching
  an outcome. Agreement is much easier if both
  sides feel ownership of the ideas/solutions.
• Involve the other side(s) early.

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• Allow all parties to save-face. A potentially
  acceptable solution may be rejected if a party is
  forced to lose face in the process.
• Face-saving reflects a persons need to reconcile
  the stand he or she takes in a negotiation or an
  agreement with their principles and their past
  words and deeds.

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• (2) Emotion -
• Emotions often run high from the start.
• Emotions can create an impasse.
• Recognize your emotions and those of the other
  side.
• Dont
• Dont treat negotiators who represent
  organizations as mouthpieces without emotions.
• Dont react to emotional outbursts.
• Dont stop people from expressing their emotions
  or dismiss their emotions.

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• Do
• Make emotions explicit and acknowledge them as
  legitimate. Recognize theirs and yours.
• Continue listening when the other side is letting
  off steam.
• Interact with the other side away from the
  bargaining table (e.g. dinner).
• Make an apology if it is warranted.

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• (3) Communication
• Potential problems
• Negotiators may not be talking to one another but
  to other parties. Playing to the gallery.
• Negotiators are not really listening to the other
  side. Thinking about their next argument.
• The other side misinterprets the communication
  (e.g. language - the word average).

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• Do
• Engage in active listening. Demonstrate that you
  have been listening - positive paraphrasing.
  Understanding is not agreeing.
• Think before you speak.
• Dont
• Blame the other side for the problem name-call
  or raise your voice.
• Allow poor body language.

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Communication Issues

• Confidentiality (the press, third parties,
  constituents).
• Size of group meetings.
• Communication away from the table.
• Ability of negotiator to make decisions on behalf
  of their constituents.

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Relationships

• Negotiations are about relationships.
• A working relationship can be very beneficial -
  less chance for miscommunication more openness
  more trust.
• Hard to separate the relationship from the
  substantive problem.
• Side-by-side joint problem solving.

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Focussing on Interests

• Many impasses are due to our tendency to think
  about our positions not our interests.
• Interests - each sides needs, desires, concerns
  and fears.
• Our interests underpin our positions.

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Interests

• In a negotiation the interests of the respective
  parties may be
• the same (i.e. shared)
• different but compatible (e.g. Ugli oranges) or
• irreconcilable.
• We often conclude too quickly that our interests
  are irreconcilable.

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• Examining each sides interests instead of their
  positions can make solutions easier to find.
• For every interest there usually exist several
  possible options that could satisfy it.
• Shared and compatible interests may lie behind
  opposing positions.

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• Differing but complimentary interests can also
  form the basis for a mutually acceptable
  agreement.
• The interests underlying a persons position are
  often not clear. They may be unexpressed or
  inconsistent with their clearly stated position.
• Try to discover the underlying interests of the
  other side.

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• In most negotiations, each side will have
  multiple interests, not just one.
• Every negotiator has a constituency to whose
  interests he/she is sensitive. It may be a
  constituency of one (e.g. themselves) or of many
  (e.g. an organization or coalition).
• Within a constituency there may exist a variety
  of interests.

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• The most powerful interests are basic human
  needs
• security
• economic well-being
• a sense of belonging
• recognition
• control over ones life
• Make your interests clear. Dont let them get
  lost in the rhetoric. Be specific.

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• if you want the other side to appreciate your
  interests, begin by demonstrating that you
  appreciate theirs.
• Paraphrase their interests. Active listening.
  Legitimizing.
• Encourage them to listen to you by Stating your
  interests and reasoning first and your
  conclusions/proposals later.

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• Shared interests
• may not be immediately obvious
• are opportunities to build upon and
• can make negotiations smoother and more amicable
  (in it together).
• Differences (e.g. interests, beliefs, valued
  items) can lead to agreements.
• Dovetailing - looking for items of low cost to
  you but high benefit for them, and vice versa.

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• Focus on where you are going, rather than arguing
  about the past.
• Try to bring to the negotiation several options
  that could meet your interests.
• While pressing your substantive issues, keep an
  open mind to modifying your list of options.

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Successful negotiators invent options for mutual
gain.
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Obstacles that Inhibit the Inventing of Multiple
Options

• premature judgment
• searching for the single answer
• the assumption of a fixed pie and
• thinking that solving their problem is their
  problem.

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• Inventing options does not come naturally. Not
  inventing is the normal state of affairs.
• Sometimes we fear that by inventing options we
  will disclose some piece of information that will
  jeopardize our bargaining position.

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• Negotiations often appear to be fixed-sum games
  (e.g. buying a car 100 more for you, means 100
  less for me).
• Ask yourself whether your proposed solution meets
  the self-interest of all parties.
• We are too often unwilling to help the other
  party(ies) find solutions that meet their needs
  (e.g. history of bad blood).

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To invent creative options

• Separate the act of inventing options from the
  act of judging them.
• Broaden the options on the table rather than look
  for a single answer.
• Search for mutual gains.
• Invent ways of making their decision easy.

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• Try to think laterally to generate more options
  that might lead to a solution(s)
• Small group activities (build on each others
  ideas).
• Use a third party to help you overcome the
  tendency for groupthink.
• Generate variations on your original set of
  options.
• Dont throw away flawed options too quickly.
  They might provide the seed for a good
  idea/option.
• Create an environment conducive to this task.

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• The above could be done by each party (among
  themselves) or between the negotiating parties.
• Examine your problem from the perspective of
  different professions and disciplines.
• If you cannot agree on substance, you may be able
  to agree on procedure.
• At a minimum agree on where you disagree.

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• A perfect win-win solution may not be possible
  at the time of the negotiation.
• Negotiations sometimes result in provisional or
  contingent agreements or partial solutions.
• Remember the context of most negotiations is
  dynamic and will continue to be so after the
  negotiation.
• Can the subject matter be enlarged so as to
  sweeten the pot?

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• Successful partial solutions can form the basis
  for more comprehensive solutions later.
• Make it easy for the other side to accept your
  solution.
• Are there useful precedents to draw upon?

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Insist on Using Objective Criteria
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• Sometimes, despite your best efforts, interests
  will conflict.
• The temptation is to resort to positional
  bargaining in such cases.
• The alternative is to make a decision on the
  basis of objective criteria.

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• The more you bring standards of fairness,
  efficiency, or scientific merit to bear on your
  problem, the more likely is a final outcome that
  is wise, fair and stable.
• Example, the Law of the Sea conference MIT model
  for the economics of deep-seabed mining.
• Allowed all parties to save face.

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How do you develop objective criteria?

• Plan in advance.
• Typically more than one objective criterion is
  available. Example car insurance claim. What is
  the cars value?
• Are the criteria legitimate and practical?

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Examples of Types of Objective Criteria

• Market value
• Precedent
• Scientific judgment
• Professional standards
• Efficiency
• What a court would decide
• Moral standards
• Tradition

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To produce an outcome independent of will, you
can use either fair standards for the substantive
question or fair procedures for resolving the
conflict.
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Negotiating with objective criteria

• Frame each issue as a joint search for objective
  criteria.
• Reason and be open to reason as to which
  standards are most appropriate and how they
  should be applied.
• Never yield to pressure, only to principle.

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• Its a matter of principle.
• Its company policy.
• A principled negotiator is open to reasoned
  persuasion on the merits.

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What is your BATNA?
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What are the costs and benefits associated with
having a bottom line?
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Best Alternative to a Negotiated Agreement

• What is the difference between a bottom line
  and your BATNA? Example selling your home.
• Why should we know our BATNA?

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Your BATNA is the standard against which any
proposed agreement should be measured.
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• Negotiating without determining your BATNA is
  negotiating with your eyes closed.
• Too optimistic or too desperate.
• Trip wires provides you with some margin in
  reserve.

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• The better your BATNA, the greater your power.
• How attractive to each party is the option of not
  reaching agreement?
• Power balance.

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Develop Your BATNA

• Invent a list of actions you might take if no
  agreement is reached
• Improve some of the more promising ideas and
  convert them into practical alternatives and
• Select, tentatively, the one alternative that
  seems best.

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• Knowing your BATNA gives you additional
  confidence in the negotiating process.
• It is easier to break off negotiations if you
  know where you are going should the negotiation
  fail.

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Should you reveal your BATNA to the other side?
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Consider the other sides BATNA
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If both sides have attractive BATNAs, the best
outcome of the negotiation, for both parties, may
well be not to reach agreement.