Negotiating to Build Partnerships

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Negotiating to Build Partnerships

• AASHTO Standing Committee on Quality
• Daniel Fodera, FHWA Georgia Division

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Overview

• What is BATNA and why is it important
• How do you clarify your interests and develop a
  BATNA
• How to think about the other party's interests
  and BATNA
• Some common negotiation traps.

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What is Negotiating?

• The process of reaching a mutually acceptable
  agreement.

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Issues, Positions, and Interests

• Definitions
• Issues are concerns that will be on the table for
  explicit agreement during the negotiation
• Positions are the parties stands on the issues
• Interests are the underlying concerns that would
  be affected by the negotiation outcome.
  Interests can include price, relationships,
  strategic goal implementation, reputation, etc
• Positions Vs Interests
• Incompatible Positions, arent necessarily
  Incompatible interests
• Interest-driven bargaining leads to greater value
  creation and provide more opportunities for
  mutually satisfactory deals than position-driven
  bargaining.
• Identify Differences to create value
• Common ground can help, but different interests
  can open unexpected opportunities
• Differences may come in forms other than
  interests risk tolerance, strategies, etc

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Issues, Positions and Interests

• Job offer example
• An issue is base salary.
• A position is your desired minimum salary.
• The interests underlying your position may
  include your need for a good incomebut may also
  include status, benefits, new opportunities, and
  other needs that might be met in ways other than
  salary.
• Positions and interests aren't necessarily
  identical, interests often include needs in
  addition to price.
• Interest-driven bargainers see negotiation as the
  process of reconciling underlying interests.
• When positions are incompatible, dont assume
  that our interests must also be incompatible. If
  you think "zero-sum"one party's gain must
  necessarily be the other party's loss. Bargainers
  miss out on creating potential, unanticipated
  value.

Clarifying Interests
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Issues, Positions and Interests

• Identify possible issues, positions, and
  interests in the following negotiations
• Outdoor advertising?
• Proprietary specs on reflective sign sheeting?
• Public involvement on a single project?
• Joint Strategic goals Safety?
• Process Review Recommendations Implementation?
• Performance Measures Public or not?

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Part One Identifying your Interests and
Speculating about the other partys

• Describe a negotiation youre facing in the
  future
• Describe the issues, your position, and your
  interests
• Speculate about the other partys possible
  issues, positions, and interests

Clarifying Interests
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Leveraging Differences

• (Be alert to new possibilities for creating
  value)
• Compare interests list differing interests
• Identify additional differences
• Brainstorm ideas for a deal

Clarifying Interests
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Improving Your Negotiating Skills

• Continually assess your own and the other partys
  interests before, during, and at the end of a
  negotiation.
• Without a refined sense of one's own objectives
  and trade-offs, it is difficult to formulate a
  strategy or judge its success.
• Avoid position driven bargaining phrases like,
  "So, what's your position?" or "Here's my
  position."
• Probe beyond the other partys positions by
  asking "Why?", "Why not?", and "How could this
  idea be improved?", "What would this idea
  accomplish for you?" You may discover new
  interests that you were not already aware of.
• Research the other side's concerns, ask
  questions, and listen carefully. Not just during
  negotiations, but during any important
  conversation with another party.

Clarifying Interests
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BATNA

• Best Alternative To a Negotiated Agreement.
• What you would most prefer to do if you and the
  other party are not able to reach a deal.
• Importance of BATNA
• Help you make smarter choices because they remove
  the pressure to reach an agreement.
• Give you more bargaining power because they help
  you quickly identify how a proposed deal stacks
  up against your alternatives

Understanding and Developing BATNAs
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BATNA

• Developing a BATNA
• Brainstorm possible alternatives to a
  negotiation.
• Weigh your underlying interests for each of the
  alternatives that you propose cost, time
  constraints, relationships, etc.
• Determine which alternative is your best
  alternative.
• Speculating About the Other Party's BATNA
• Consider what the other party's BATNA might be
  and what value the other party places on it.
• Don't fall into the trap of deciding how the
  other party should see it versus how he or she
  really views it.

Understanding and Developing BATNAs
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Identify your own BATNA

• Describe a negotiation youre facing in the
  future
• Ask yourself What will I do if this agreement
  cannot be reached?
• List Alternatives
• Outline the interests that the alternatives meet
  or dont meet. Consider ease, process, time
  pressure, relationships, risks
• What else could you do to improve your analysis?
• Are the alternatives practical and actionable?
  Could they be improved?
• Which one is best? The highest value alternative
  is your BATNA

Understanding and Developing BATNAs
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Speculate on the other partys BATNA

• Speculate what the other party will do if this
  agreement cannot be reached
• List Alternatives
• Speculate about the interests that the
  alternatives meet or dont meet. Consider ease,
  process, time pressure, relationships, risks
• What else could you do to improve your analysis?
  What can you do to better understand the others
  environment?
• Bias check have you fairly imagined the other
  partys options?
• Which one seems best? The highest value
  alternative is the other partys BATNA.
• What questions can you ask during negotiation to
  uncover the other partys interests? List them
• Youre ready to begin your negotiation. Remember
  a BATNA is the standard against which any
  proposed agreement must be measured.

Understanding and Developing BATNAs
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Determining BATNA
No
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Examples of BATNA

• What do you get if you walk away from the deal?
• Another day at another car dealer
• Keep the existing job

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Common Negotiation Traps

• Failing to identify your interests
• Avoid this trap by clarifying your full range of
  interests.
• In addition to price, consider other interests,
  such as maintaining a positive working
  relationship focusing on the "spirit of the
  deal" (how the agreement will work in practice)
  and ensuring that the negotiation process is
  perceived as fair and respectful by both sides.
• Neglecting your BATNA
• Avoid this trap by developing a BATNAyour best
  alternative to a negotiated agreement.
• Determine what you would do if an agreement
  cannot be reached.
• Ignoring the other side's problem
• Avoid this trap by viewing the negotiation from
  the other party's perspective.
• Speculate about their underlying interests and
  BATNA.
• Compare your interests with those of the other
  party and look for opportunities for mutual gain.
  
• Overlooking differences
• Avoid this trap by searching for differences in
  interests that can suggest new options for
  mutually beneficial deals.

Tool Avoiding Common Negotiation Traps
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Common Negotiation Traps

• Introducing biases
• Avoid this trap by not letting cognitive biases
  such as role bias (over committing to your own
  point of view) and partisan perceptions (painting
  your side with positive qualities while vilifying
  your "opponent") enter into a negotiation.
• Confusing the deal and the relationship
• Avoid this trap by keeping issues surrounding the
  deal (such as price and service levels) and the
  relationship (such as mutual understanding and
  respect) separate.
• When you and the other side don't feel that you
  need to trade the quality of the relationship for
  the terms of the deal, you exchange information
  more freely and become more creative and
  collaborative in your discussions.
• Failing to make appreciative moves
• Avoid this trap by keeping a constructive
  dialogue going.
• When negotiations stall, solicit the other
  party's ideas and perspectives on an issue and
  express your appreciation of what the other party
  brings to the table.
• Ignoring the spirit of the deal
• Avoid this trap by clarifying expectations about
  how your negotiation will be implemented.
• Determine how you and the other party will work
  together, resolve disputes, communicate, and
  handle surprises, before the ink has dried on the
  contract.

Tool Avoiding Common Negotiation Traps
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Summary

• Issues are on the table for explicit agreement.
• Positions are one party's stands on the issues.
• Interests are the underlying concerns that would
  be affected by the negotiation's outcome
• Common ground can help, but different interests
  can open unexpected opportunities
• Best Alternative To a Negotiated Agreement.
• What you would most prefer to do if you and the
  other party are not able to reach a deal.
• To develop a BATNA, you should
• Brainstorm and evaluate alternatives to a
  negotiation
• Determine which alternative is your best
  alternative.
• Speculate About the Other Party's BATNA