Negotiation

"Getting to Yes" Getting to yes is a guide to negotiating using a method developed at the Harvard Negotiation Project called principled negotiations. The principled negotiations method can be used in virtually any negotiation. Issues are decided upon by their merits and the goal is a win-win for both sides. Below is a summary of some of the key concepts from the book.The four steps of a principled negotiation are: 1. Separate the people from the problem 2. Focus on interests, not positions 3. Invent options for mutual gain 4. Insist on using objective criteria In principled negotiations, take the view that you and all the other participants are problem solvers rather than adversaries. The authors recommend that you think of your goal as being to reach an outcome "efficiently and amicably."Let's look at each step in more detail. Step 1: Separate the people from the problem All negotiations involve people and people are not perfect. We have emotions, our own interests and goals and we tend to see the world from our point of view. We also are not always the best communicators; many of us are not good listeners. Getting to Yes outlines a number of tools for dealing with the all too human problems of perception, emotion and communication. However, the authors stress that preventing people problems is the best option. The keys to prevention are: "building a working relationship" and "facing the problem, not the people." Think of the people you negotiate with on a regular basis. Generally, the better we know someone, the easier it is to face a negotiation together. We tend to view people we don't know with more suspicion: just what is "Bob" up to' Take time to get to know the other party before the negotiation begins. Think of the negotiation as a means to solving a problem and the people on the other side as partners helping to find a solution. Ideally both parties will come out of a negotiation feeling they have a fair agreement from which both sides can benefit. If the negotiation feels like a situation of “you versus them”, the authors suggest a couple of options: 1. Raise the issue with [the other side] explicitly…'Let's look together at the problem of how to satisfy our collective interests'. 2. Sit on the same side of the table….Try to structure the negotiation as a side-by-side activity in which the two of you – with your different interests and perceptions, and your emotional involvement – jointly face a common task. Step 2: Focus on Interests, Not Positions The authors use a simple example to explain the difference between interests and positions: "Two men [are] quarrelling in a library. One wants the window open and the other wants it closed. …. Enter the librarian. She asks one why he wants the window open: 'To get some fresh air [his interest]'. She asks the other why he wants it closed: 'To avoid a draft' [his interest]. After thinking a moment, she opens wide a window in the next room, bringing in fresh air without a draft." The interests of the two men are the desire for fresh air and the desire to avoid a draft. The men's positions are to have the window opened or closed. The authors say we need to focus, not on whether the window in their room is opened or closed, but on how we can meet both the need for fresh air and the need to avoid a draft. More often than not, by focusing on interests, a creative solution can be found. In this little example, each man has one interest but in most negotiations, each party will have many interests and these interests will likely be different than yours. It's important to communicate your interests to the other party. Don't assume they have the same interests as you or that they know what your interests are. Don't assume you know what interests the other party has. Discussion to identify and understand all the interests is a critical step in the process. Step 3: Invent Options for Mutual Gain The authors feel that a common problem with many negotiations is there are too few options to choose from. Little or no time is spent creating options. This, they feel, is a mistake. There are four steps to generating options: 1. Separate inventing from deciding. Like in any brainstorming session, don't judge the ideas people bring forward, just get them on the board. 2. Broaden the options on the table rather than look for a single answer. Remember the men at the library' The only option they saw was opening or closing the window in the room they were both sitting in. In fact, there are many options: borrow a sweater, open a window in another room, move to a different spot, etc. 3. Search for mutual gain. In a negotiation, both sides can be worse off and both sides can gain. Principled negotiations are not about "I win" and "you lose". 4. Invent ways of making the other party's decisions easy. Since a successful negotiation requires both parties to agree, make it easy for the other side to choose. This is where putting you in the other person's shoes can be very valuable. What might prevent "Bob" from agreeing' Can you do anything to change those things' Step 4: Insist on Using Objective Criteria Principled negotiations are not battles of will. There is no winner and you don't need to push your position until the other backs down. The goal is to "produce wise agreements amicably and efficiently". Use of objective criteria helps remove the emotion from the discussion and allows both parties to use reason and logic. You may have to develop objective criteria and there are a number of ways that can be done, from “traditional practices”, to “market value” to “what a court would decide”. Objective criteria "need[s] to be independent of each side's will." Once objective criteria have been developed, they need to be discussed with the other side. The authors provide some guidelines: 1. Frame each issue as a joint search for objective criteria. 2. "[Use] reason and be open to reason" as to which standards are most appropriate and how they should be applied. 3. "Never yield to pressure", only to principle. Common Challenges Following these steps should lead you to a successful outcome, but it isn't always that easy. The authors then go on to address three types of common challenges negotiators face. Sometimes the other party is more powerful than you: "The most any method of negotiation can do is to meet two objectives: first, to protect you against making an agreement you should reject and second, to help you make the most of the assets you do have so that any agreement you reach will satisfy your interests as well as possible." To protect yourself, develop and know your BATNA: Best Alternative to a Negotiated Agreement. "The reason you negotiate is to produce something better than the results you can obtain without negotiating." The result you can obtain without negotiating is your BATNA. "The better your BATNA, the greater your power" so it's essential to know your BATNA and take time to make sure it's as strong as it could be. The same will hold true for the other party. There are three steps to developing your BATNA: 1. Invent a list of actions you might take if no agreement is reached" 2. Improve some of the more promising ideas and convert them into practical alternatives 3. Select, tentatively, the one alternative that seems best Sometimes the other party just won't play: In a principled negotiation, you don't want to play games with the other party and you don't want them playing games with you. The authors advocate three approaches to getting things back on track in this situation: 1. Concentrate on the merits: talk about interests, options and criteria 2. Focus on what the other party may do: try and identify the other party's interests and the principles underlying their position 3. Focus on what a third party can do: bring in a third party to assist if steps 1 and 2 aren't successful Sometimes the other party uses dirty tricks: You may encounter a party who won't shy away from using dirty tricks. The process for dealing with this type of tactic is to follow the process for principled negotiations: 1. Separate the people from the problem 2. Focus on interests not positions 3. Invent options for mutual gain 4. Insist on using objective criteria 5. If all else fails, "turn to your BATNA and walk out" The authors close with three points: 1. "You knew it all the time." Much of what goes into a principled negotiation is common sense. The authors have developed an understandable framework to share the approach with others. 2. "Learn from doing." You won't become a better negotiator unless you get out there and practise. 3. Winning: "The first thing you are trying to win is a better way to negotiate – a way that avoids your having to choose between the satisfactions of getting what you deserve and of being decent. You can have both." BATNA This article explains how a negotiator can use their BATNA to achieve a better bottom line instead of settling on a bad agreement. | As most business negotiators are already aware, BATNA is an acronym for (Best Alternative To a Negotiated Agreement). However, it should be made clear at the outset that BATNA is not the so called bottom line that negotiators perceive as the means to guard themselves against reaching agreements where they give too much or receive too little. A bottom line signifies the worst possible outcome that a negotiator might accept. The bottom line is meant to act as the final barrier where a negotiation will not proceed further. It is a means to defend oneself against the pressure and temptation that is often exerted on a negotiator to conclude an agreement that is self defeating. Although bottom lines definitely serve a purpose, they also regrettably foster inflexibility, stifle creativity and innovation, and lessen the incentive to seek tailor-made solutions that resolve differences. In contrast to a bottom line, a BATNA is not interested in the objectives of a negotiation, but rather to determine the course of action if an agreement is not reached within a certain time frame. As a gauge against which an agreement is measured, it prohibits a negotiator from accepting an unfavorable agreement or one that is not in their best interests because it provides a better option outside the negotiation. Since BATNA is the alternative to what a negotiated agreement would be otherwise, it permits far greater flexibility and allows much more room for innovation than a predetermined bottom line. When a negotiator has a strong BATNA, they also have more power because they possess an attractive alternative that they could resort to if an acceptable agreement is not achieved. When creating a BATNA, a negotiator should: * Brainstorm a list of all available alternatives that might be considered should the negotiation fail to render a favorable agreement; * Chose the most promising alternatives and expand them into practical and attainable alternatives; and * Identify the best of the alternatives and keep it in reserve as a fall-back during the negotiation. Although it would be absurd to start a negotiation with a predetermined decision not to find an agreement, a viable BATNA acts as an essential insurance policy. A well conceived and clearly defined BATNA gives a negotiator the advantage to break off the negotiation if it becomes clear that a beneficial outcome is not possible. The negotiator would then know the consequences should the negotiation fail. The 'willingness' of a negotiator to break off a negotiation allows the negotiator to adopt a more firm and forceful stance when proposing ideas and interests as the basis for an agreement. In deciding whether a BATNA should be revealed to the other party/ parties will depend on the strength/attractiveness of the BATNA. If a negotiator has a strong BATNA, it may be beneficial to disclose it, as this would prevent the other party/ parties from acting as if a viable alternative didn't exist. However, if a negotiator has a weak BATNA, it would be better not to disclose the BATNA, especially if the other party indicates they are over-estimating their own BATNA as this would prove to be a bonus that should not be squandered through disclosure. A negotiator who knows more about the alternatives available to the other party/ parties will be more able to prepare for a negotiation. Should a negotiator learn that the other party is over-estimating its BATNA before the start of a negotiation, then they will be able to effectively use this information to lower the negotiation expectations of the other party. In situations where both parties possess a strong BATNA, the negotiation would seem rather fruitless because there would be very little incentive to reach an agreement. In this scenario, both parties would be better off to seek elsewhere to pursue their business. When a negotiator fails to explore its BATNA, they will find themselves in a very shaky situation. They will be exposed to: 1. Strong internal pressure to make an agreement, as they will be unaware of what would happen should the negotiation fail; 2. They will be over optimistic about proposed agreements which can then result in the associated costs not being fully appreciated; 3. They will face the peril of becoming committed to reach an agreement, as they will be unaware of alternatives outside the negotiation. This will foster pessimism about their prospects if the negotiation fails; and 4. They will become beholding to the whims of the law of agreement, which holds that when persons agree to something this is entirely dependent on the attractiveness of the available alternatives