NEGOTIATION: HOW TO CREATE AGREEMENT

 

INTRODUCTION:  WHAT IS “NEGOTIATION”

Negotiation is a creative endeavor to produce a mutually acceptable outcome. The key words in this statement are a) creative; b) endeavor; c) acceptable and d) outcome.  A skilled negotiator sees the creative options to reach a specifically desired outcome, but she also knows that it will take research, planning, and sustained, patient effort.

CREATIVE NEGOTIATION

Agreement does not exist, and it cannot be “found.” It must be created. What are the raw materials of agreement? I have something, and you want it. You have something, and I want it. My want has to be equal to your price. My price has to be equal to your want.

THE NEGOTIATION CLAY NEEDED TO SCULPTURE A DEAL

Here are some of the “raw materials” that creative negotiators use to produce a different and better outcome:

1. Power: measured by my resources (1) available to obtain what I want and (2) available to sustain me if we don’t reach a deal.
2. Want: measured by desire and price, with price being defined as what a party is willing to pay. The “price” may be in any “unit” of value, not limited to money. For example, price can be the emotional price of the transaction.
3. Trust: measured by my willingness to depend on you to keep an interim commitment made during the conversation; or measured by how consistently your statements to me prove to be true and accurate during the negotiation.
4. Transparency: measured by how early, clearly and directly you state your expectations and needs.
5. Humor: measured by the ability of the parties to laugh together at matters unrelated to the sensitive issues of the negotiation.
6. Civility: measured by the ability to state a want or expectation without attacking the character, morals, personality, beliefs, or intelligence of the other party.
7. Detachment or “Objectivity:” measured by the ability to be in the role of the other party, and to sense the emotions of that party given their different perceptions and experiences in the transaction.
8. Fairness: measured by acknowledging the valid points of the other party, and creating the mutual perception that the parties are both striving toward a shared standard of reasonable, principled resolution.
9. Accountability: measured by the surcharge or penalty for bad behavior, such as loss of reputation, lack of trust and cooperation in subsequent dealings, or even monetary and property losses in later transactions.
10. Risk Assessment: usually measured by how a party will weigh the opportunity for immediate certain gain against the hope for a greater gain in the face of uncertainty.
11. Tactical Competence: measured by the accuracy of predictions that certain actions will produce certain outcomes, usually stated as how an offer will be received, or how effective an argument will be in moving the conversation in a favorable direction.
12. Extraneous Factors: such as economic or physical health, political risk, shame, embarrassment, or ego driven needs to be “right” or vindicated.

WORKING WITH THE RAW MATERIALS OF NEGOTIATION

Negotiation is not “one size fits all.” A husband and wife have an emotional stake in preserving the relationship, while litigants who may never see one another again see continuing the relationship as less important. In business, vendors, manufacturers, distributors and retailers may have long standing relationships that may result in short term concessions to preserve long term rewards.

But every negotiation starts with the same raw materials, and every negotiation is bounded by restrictions of time, energy and money. Structure however enhances rather than restricts creativity.

NEGOTIATION GUIDELINES

1. Get the facts. This means listen to your sources, even those that are contentious or opposing. “Facts” in this instance can include more than just “what happened” to include how the other party feels and perceives about what happened.

2. Don’t fall in love with your own story. We all have a tendency to spin the facts to fit our desire to “look good” or to be right. Once we tell a story based on this premise, we become closed to seeing that another story may also have weight and persuasion. Bottom line: be open.

3. Know your weaknesses as well as your strengths. See how pressing your story to the limit could result in a day of reckoning: the judge finds insufficient evidence; the child is so hurt by your angry response that she feels it is unsafe to share with a parent; the funds are not available to support your venture; the witnesses, partners or associates you thought would come to your aid are unwilling to help. Perhaps the law, ethics, company policies, or standards of civil conduct do not support your position. More often than not, uncertainty of how strong or weak your position, argument, or evidence might be is what drives both parties to reach a compromise. The point is that it is as important to weigh the weaknesses of your case as much as it is to advance its strengths.

4. Listen and listen first. That means stepping out of your fixed position, and entering into the interests and feelings that the other party brings to the discussion. Avoid repeated and early threats. Threats raise adrenaline and resistance, and foreclose listening or understanding.

6. Help the other party know you’ve listened by being able to state their case as succinctly and accurately as they can.

7. Require the other party to listen to your interests and position, and then state that position with as little threat and acrimony as possible. Stick with facts, and avoid personal attacks.

8. Be clear in your own mind going into the discussion what you want, and want you’re willing to concede to get what you want. If there is a negotiation team, everyone needs to be on the same page from the beginning with the goal and the basic tactical approach.

9. Be prepared. Do the necessary investigation and research to know both the facts and personalities. Go beyond the limited scope of the particular controversy to see what impact an outcome might have on the family, company, or institution.

10. Be civil. This is old fashioned politeness and courtesy. If you don’t have it, it may be too late.

11. Be patient. There are two reasons for this: first, the party in a hurry shows weakness caused by some undisclosed urgency; and second, patience often leads to clarity as questions may take time to answer.

12. Find as many opportunities as possible for appropriate humor or wit. This relieves tension, and builds good feeling.

13. Build trust. State the facts correctly and fully. Make reasonable arguments. Emphasize the desire for exploring a “fair” outcome based on principle and decency. Keep your word. For example, if you say you’ll share a piece of information useful to the discussion, deliver it on time. One of the paradoxes of negotiation is that you build trust in an inherently distrusting process. See the next point.

14. Understand the rules of the game. No one states his bottom line, and bluffing carries a high risk of backfiring if it’s exposed. Negotiation is unusual in the world of ethics in the same way that bidding is “unusual” in the world of poker. The other players don’t expect you to reveal your secrets, especially your secret hopes and fears. Don’t say everything you know or disclose everything you’re willing to forego to make a deal. You want the best deal, and the other party expects you to “lie,” that is, overstate your case, to get it. And you expect them to do the same. So it is that the text is driven by the “subtext” of the discussions.

CONCLUSION

Negotiation is critical to living in a society. We all need one another, and we all also serve our own best interests. As a result, we must learn how to enter “win-win” transactions. Highly successful businesses and individuals find innovative ways to both give and receive so that needs are met.