Negotiation:
- Dealing with differences and needs
- Getting more
- Satisfying a need you cannot get on your own
- Building relationships that benefit all parties (debatable by some)
There are two main schools of thought when it comes to negotiating. The first, and most common, is bargaining. Academically, it is referred to as positional negotiating. In this kind of negotiation, parties believe that there is a fixed amount of value that can be claimed. Each party tries to get as much value as possible. The second kind of negotiation is sometimes referred to as integrative. In this second kind of negotiation, parties believe that it is possible to create new value in addition to what is up for negotiation and then have parties claim the parts that are important to them.
A classic example of the difference in these two negotiation styles is two children that both want an orange. In distributive negotiation it would be fair to cut the orange in half. Integrative negotiation however, would look to the interests of the two children to discover that one child wanted to make orange juice from the fruit, and the other child wanted to use the rind to make a cake. Here on child would get the entire peel and the other child would get the entire fruit, with both children being better off than the standard bargaining and fairness models.
There are hybrid models of course, where one party bargains and the other tries to create value. Most research suggests that when one party sticks to value creating negotiation, the other party can be convinced to do the same. Some authors like Jim Camp, argue that trying to attain a win-win situation brings in too much emotion and allows you to be taken advantage of. If the parties remove irrational emotion from the equation and really focus on what is going on.
Differences in belief, or even different interpretations of a fact make deals possible (eg: buying and selling stocks). To understand these differences pre-negotiation preparation and during-negotiation preparation is a key. Lack of preparation is the biggest problem in negotiating. Having said this, keep in mind that the amount of prep required should be proportional to what is at stake.
Planning Steps
- Know the other group's culture and beliefs
- Determine interests and good outcomes for each party
- Identify differences and opportunities for trade
- Identify each party's best alternative to the negotiation
- improve your best alternative before and during the negotiation
- Negotiate with those who can make the decision
- Be patient
- Acquire external standards for top and alternate possibilities
The Negotiation
- Distinguish personalities from the problem
- Focus on interests
- Explain your interests as they explain theirs
- Generate more options
- Listen carefully, expressing empathy when needed
- If your best alternative is weak, don't divulge it
Tactics
- Recognize malicious tactics and call them out
- Present interests first, then the proposal
- Praise for something still under way makes a person want to keep doing it
- If you think the other party can improve their alternatives, put an expiration on the offer
If Things are not Progressing
Ask "How might the other side be criticized if they made the negotiation?".If Your Ability to Trust is Questioned
Try something like "I don't think it is a question of trust, I think it is a question of making sure we are on the same page".Also, "It is not about trust, it's about everyone feeling like there is a fair deal".
Making it Easy to Say Yes Without Sounding Like a Threat
Attribute the statement to standards or established facts. Be careful of the phrasing and bring up the importance of the relationship between the two parties.You Need More Information
Silence can be powerful and act as a smooth rejection of what was just said. It can also make the other party feel like they need to back up what was just said with more information. Talking specifically to people who have less authority to make decisions and are not as worried about keeping quiet on certain topics can bring you more information.The Negotiation's Initial Direction is a Problem
Statistically, the first offer correlates with the final agreement. Putting the first offer on the table can help drive the whole discussion but you must be able to back it up. If another party makes a proposal first, bring in standards that are in your favor, bring up interests, and then put your offer on the table.Things to Keep in Mind
Along with general negotiating practices and tactics, there are several ideas whose diversity keeps them from being categorized. Even though they may be smaller, individual ideas, they should not be underestimated. For exanple: Don't attack or defend. The more you can remove irrational emotion from the negotiation, the better chance you will have of being able to concentrate on satisfying both parties.Make yourself open to correction. Remember that those with whom you are negotiating are people and have the same basic human needs that you do. People do not like to be threatened, told they are wrong, or insulted. Also, don't assume that your worst nightmare is the other party's top priority. Thinking in this way only allows value to be claimed, not created.
When comparing two options or one option to a standard, it is important to have some value associated with the differences. The benefit of having a defined point at which you will walk away is debatable. Some critics argue that it impedes new option generation, while the other side claims that you leave yourself open to an end result that is less desirable than if you had not negotiated. If you do subscribe to having a reservation price, it can be determined by looking at your best alternative and then adding the value of any extras.
There is a difference in knowing what consessions to make and when to make them. When getting ready to make a consession, make sure it is really worth it. if you are unsure about the concession and it is a big deal, you can always take a break to think. If the other side is making a concession, keep in mind that bigger concessions show that a party is more flexible while smaller concessions show that a party is less flexible.
Overcoming Cultural Differences
Geert Hofstede created five scales that help determine the attributes of a person. Although thoroughly understanding everything about someone's personality is probably not your objective, some important observations can be made (eg: is the person more fact oriented or relationship oriented).The following is a list of the five scales and a brief description of each:
- Power distance: Are all people equal in authority?
- Individualism: The preference of individuals or groups
- Uncertainty avoidance: The resistance to change
- Masculinity: Assertiveness or dependence
- Long term orientation: Long vs short term
Even though you can't give the other side a personality test to fill out, you can identify some of these elements based on geographical averages and organizational culture. By looking at jargon, dress code, rituals, ceremony, layout, and values (Hofstede helps here) you can tell what is important to that person. From this you can get a better picture about what they are willing to do and trade.
Negotiating is a useful art that takes practice to master. Understanding these elements will help guide that mastery as you run into opportunities to practice.
