Whether negotiating with your boss, your children, your partner or your customers, negotiation touches our lives every day – sometimes without us even knowing…
The act or process of negotiating: successful negotiation of a contract / a discussion intended to produce an agreement
A little over a year ago, I was boarding a flight from New Orleans to Dallas/Fort Worth when a couple began to occupy the two adjacent seats. The wife got into her seat, but her husband, Bill (who looked as if he was held together by the medical equivalent of baling wire), couldn’t manage to sit. It was obvious he was in serious pain.
Sometimes you want to negotiate when you don’t feel as if you’re in a position of power. In this situation, I was a lowly airline passenger on a short flight. I derived power, however, from the fact that there was nothing to lose and everything to gain. It was in Bill’s interest to sit in a roomier, more comfortable seat. The flight attendant had an interest, as well; unless she could get Bill in a seat, the plane could not take off. It took a little work, but I was able to convince the flight attendant to move Bill to the only empty seat in first class. No one lost face, everyone’s interest had been considered, and the negotiation worked well for all. As a provider of negotiation training for corporate clients, I felt pleased to see benefits resulting from some of the techniques I teach.
Resolving, managing and preventing conflicts
Whether the predicament is commercial lenders who are stressed out by the instruction to “never lose a deal because of the rate,” department chiefs contending over budget issues, or human resources directors wrestling with issues of diversity – the use of good negotiation skills can resolve, manage, and, most importantly, prevent conflicts. According to the Rolling Stones, “You can’t always get what you want.” The question now becomes, “How many of the stakeholders can get what is in their interests?” If a business is to succeed in today’s climate, everyone must be prepared to negotiate to arrive at favourable results.
For many decision-makers, annual obligations like business plan reviews and budget approvals tend to coincide with increased levels of stress and anxiety. We are well-prepared for the substance to be decided; it’s the process that is so unsettling. It can be troublesome if the short-term objective of minimizing conflict gets in the way of developing and achieving long-range goals. Interest-based negotiation techniques can help us focus our energy on the process and guide that process towards yielding a satisfactory result.
Doing your homework, researching your options, and exploring your personal and professional goals will help you to regain a sense of having some say in your destiny.
A key to negotiation is knowing the other side’s primary and secondary needs – and using the latter as bargaining chips. One way to nail down those needs? Create an ‘Interest Map™’ – a list of the opposing stakeholders, their interests in the outcome, and the reasons behind them.
An Interest Map™ lays everything out in black and white and helps you to plan a strategy. Interest maps force you to focus on the information you’ll need, the assumptions you’ll have to question, and areas of common ground in a negotiation.
Some tips for mapping your opposing team’s goals:
Before creating the map, define who the stakeholders are. They could range from a small management team to suppliers, customers, and a leadership pool that spreads across several company divisions. When thinking about the possible stakeholders, it’s better to start with a long list than to discover too late you left out a person who could help shape your agreement.
Chart the map
List the stakeholders horizontally across a large sheet of paper or flipchart, and group them by their relationship to each other. Below each stakeholder, list his interests in order of importance.
Design the map so it’s easy to draw lines connecting the common interests of different people and then list the reasons behind those interests. Going through stakeholders’ needs step by step sharpens your instincts and can help forge effective counteroffers.
When listing interests, be open-minded. You may hit on a need that’s not readily apparent.
List hot-button issues
Certain ones are so emotionally charged, they should be avoided. Others need to be confronted and defused. The map should define both.
Do a reality check
When you’ve done your first draft, narrow the list of stakeholders by getting input from co-workers and your side’s negotiating team. This will test your accuracy, prompt new insights and promote team unity.
Unless people feel they have ownership in the negotiation, they won’t feel a strong commitment to fulfil the terms of whatever final agreement you reach. Make sure that people buy into the process early on, and see that stakeholders on your side stay comfortable with the way things are going.
Don’t go into the negotiation thinking you have all the answers. An Interest Map™ outlines your best take on stakeholders’ needs. To ensure you’re not going in with false assumptions, ask questions to draw out the other side. Providing you’ve done your homework in charting the map, you will know exactly which questions to ask.
Most negotiations are repeat performances. We tend to deal with the same bankers, suppliers, clients, directors, managers, etc., for a long time. It is important to recognize and give proper weight to the context in which a negotiation is taking place; if it is within an on-going relationship, the significance of that relationship must be considered.
We can take positive steps to prepare for the decision-making process and we can monitor our own behaviour – and that of other participants — as the process goes forward. By following a few common sense rules we can reduce conflict and turn it into cooperation and reach solutions that really work for all the participants.
Control your emotions rather than letting them control you
Religion teaches us to hate the sin not the sinner. If we view the problem as that which needs to be resolved rather than viewing someone holding a contrary viewpoint as a person to be defeated, the odds of a successful collaboration increase.
One specific technique that can work is to change the shape of the table rather than sitting opposite your ‘opponents’, arrange the seating so that all the parties are sitting together facing a flip chart or blackboard where the problem is presented. That makes it clear that all the participants are facing the problem together, that instead of it being ‘us’ against ‘them’, it is a case of ‘all of us’ against ‘it’.
Distinguish between interests and positions
The classic story to illustrate this describes two sisters fighting over the only orange in the family larder. Each sister must have the entire orange for herself, anything less is unacceptable. A wise parent asks each of the girls (in private) why she wants the orange. One explains she wants to drink the juice; the other wants to use the rind to cook a pudding. What each sister wants (the orange) is her position, why she wants it (juice / rind) is her interest. In this case, the simple solution is to give the cook the rind after the juice has been squeezed for the thirsty sister – thus meeting the interests of both.
When preparing for a negotiation, or after it has begun, don’t just ask “What do they want?” It is also important to ask, “Why do they want it?” It is equally important – and often more difficult – to ask the same questions about your own views. Many successful negotiators find they will be more successful if they focus on understanding their interests as they enter discussions. If they haven’t started out with a perfect package, the ideas of others may actually improve their final result.
Negotiators who arrive with a complete package can create real problems. Modifications to their ideas might be taken personally, they may be stubborn, and reaching a satisfactory resolution is made more difficult so keep an open mind.
Consider your BATNA (Best Alternative To a Negotiated Agreement)
If you do not reach an agreement with the other, does that really make things worse for you? When you’re selling an antique Rolls Royce and have received an offer of $43,250, you know what another potential buyer has to do to get you interested. Of course, the first offerer may plan to use the car for chauffeuring wedding parties while a second offerer collects and restores antique cars and preserves them indoors. In determining your BATNA, a straightforward review of your interest will give you the clearest picture.
There’s an old American country & western song about playing poker that summarizes the concept of BATNA: “You have to know when to hold and know when to fold.” If you accept your BATNA, you know when you can simply turn your back on the negotiations. But it is important not to ignore the other party’s BATNA. The relative strength of each party’s BATNA will determine the balance of power each can exercise.
Silence is golden
This is true for two reasons: If one party is highly opinionated or emotional, if their approach is threatening or extremely demanding, keeping quiet after they finish speaking can be quite unsettling to them. It is like jujitsu; you allow them to be tripped up by their own forcefulness. Most people are troubled by silence in the midst of heated discussion. Sometimes silence is viewed as disapproval — but since no specific disapproval has been voiced, it cannot be treated as an attack. It has happened on many occasions that, when met with silence, people have modified their previous statements to make them more palatable.
Silence is an important element in the crucial tool known as ‘active listening’. The job of a good negotiator is to listen to, and understand what others are saying. After all, you can’t make an intelligent response to an opinion you do not understand. The discipline of active listening requires that you focus on what another person is saying; don’t spend your time shaping a stinging response that will put them in their place.
Active listening has some interesting consequences: The listener may actually be able to get a clearer picture of the other party’s ideas. And when the listener’s response shows just how good a job he or she has done listening, it can shock the other party: “Good grief, they actually paid attention to me!”
One other terrific result of active listening is that the discipline of focusing on other opinions can also give the listener the chance to reflect on the process and strategy. Stepping aside and taking a dispassionate view of the goings-on can make one a far more effective negotiator.
If all the participants view the process as fair, they are more likely to take it seriously and buy into its result. Moreover, the focus on fairness can have an important impact on the substantive result. If the parties to a negotiation can agree on standards against which elements of the agreement can be measured, it can give each a face-saving reason for agreeing. Referral to the base rate of the other major lending institutions, an industry standard of marketability, or other common measures, can validate the agreement the parties reach.
To be considered successful, an agreement must be durable. Parties who walk away from the table grumbling may regret their commitment and only honour it grudgingly. If they end up looking for excuses to get out from under an unwanted result, the gains achieved by the other side may prove to be short-term indeed.
Only one person can get angry at a time
This is yet another means to help individuals keep a cool head and pay attention to the process and the strategy, as well as the substance of the negotiation. If it’s not your ‘turn’ to be angry, the exercise of restraint can be turned into a positive opportunity to observe what is going on with a clear eye. No less important, yelling at each other is not negotiation; it is confrontation. In those situations there may possibly be a ‘winner'; but it is even more likely there will be a ‘loser’.
In times past, when two property owners had a disagreement, they would hire knights and wage war to reach a conclusion. Then somebody invented lawyers, and the problem-solving process became one of waging law. Our society has reached a level of sophistication in which we recognize that the costs of waging war – or waging law – are terribly high. With the use of good negotiation skills, we have the capacity to reach conclusions in a more satisfactory manner: we can wage PEACE.
Enhancing negotiation skills
Enhancing your negotiating skills is an important element of personal development. Helping your colleagues and staff to negotiate better will save time, reduce stress, and increase productivity. The changing cast of stakeholders means that successfully negotiating the minefields in the business world can be crucial to your own health and success.
As you consider the brief lessons contained herein, it makes sense to remember the old story about the New York tourist. She asked a passerby, “How do I get to Carnegie Hall?” The response: “Practice, Practice, Practice.”
Steven P. Cohen is a Beverly, Massachusetts-based executive coach with clients on both sides of the Atlantic and is President of The Negotiation Skills Company, Inc.