Negotiation

by Bob MacKenzie

Preparing for negotiations (before)

Key tip

The secret to successful negotiation is preparation.

Successful negotiation is:

Before

The ‘before’ stage of negotiations has three essential elements:

  1. Deciding
  2. Thinking and feeling
  3. Planning.
Exercise

Think about the details of a particular set of negotiations in which you’re currently, or about to be, involved. Then work your way systematically through the following checklist of questions about each of the three elements mentioned above.

1. Deciding

Me

  1. Do I need to negotiate? (BATNA and WATNA)
  2. What are my goals and objectives?

    • What is my best outcome? (What would I most like to gain from these negotiations?)
    • What is an acceptable outcome for me?
  3. What am I prepared to give or trade to achieve my objectives? (The give-get principle)
  4. What is my bottom line? (What is the very least that I would like to come away with, below or above which I am not prepared to go in any circumstances?)

    • What is the least acceptable outcome for me?
    • What am I not prepared to give up?
    • What is the most I can afford to give for it?
    • Can I afford not to negotiate? (see BATNA and WATNA)

They

  1. What are the objectives of the other party?
  2. What might they give or trade in order to achieve their objectives? (The give-get principle)
  3. Can they afford not to negotiate? (see BATNA and WATNA)

We

  1. What have we got to offer each other that each of us might value differently? (What are the bargaining counters?)
  2. How will we each manage the negotiation?
  3. What is the nature of the relationship we wish to establish with each other?
  4. What impression do we each want to create?
  5. How will we each create that impression?

2. Thinking and feeling

  1. What are my feelings about these negotiations?
  2. What are their feelings about these negotiations?
  3. What common ground is there between us?
  4. What are the likely areas of conflict?
  5. What are likely to be their answers to the questions in the ‘Deciding’ section above?
  6. What tactics might they use? (Don’t get paranoid!)

3. Planning

  1. Who will lead the discussions on our side?
  2. Who will lead the discussions on their side?
  3. How will we try to gain their confidence and trust?
  4. What should we begin by discussing?
  5. What tactics might be useful?
  6. What are some possible ‘If you... ’ and/or ‘I would be prepared to...’ opening gambits?

 

What negotiating tactics will you use?

A great deal has been written about negotiating tactics that are designed to get the better of the other party. Here, we discuss three tactical issues that arise from seeking a win-win outcome. They are

  • Determining your BATNA
  • Deciding whether to put your cards on the table
  • Agreeing ground rules.

How can you determine your BATNA?

There are four simple steps for determining BATNAs:

  1. List all the possible actions you think you might be able to take if no agreement is reached
  2. Seek to improve some of the better ideas, and then convert them into more practical options
  3. Carry out a cost-benefit analysis of this short-list and of all possible negotiated outcomes that you can predict; if you cannot do this yourself, you can ask a third party to do so on your behalf or to facilitate your decision-making
  4. Carry out an option analysis and select the most promising option for further development and action.

Should you put all your cards on the table?

A negotiated outcome is only finally achieved when all parties have come to the conclusion that their respective BATNAs are not sufficiently robust options. So is it possible for both parties to arrive at sufficiently similar and accurate perceptions of each others’ BATNAs to allow for a negotiated agreement without either or both necessarily showing their entire hand?

The decision as to whether or not to be fully transparent and open can be a tricky one to take. The choice becomes easier to make once you have built up a relationship of trust with the other party, which may happen either before or during the negotiations.

Exercise

Identifying your BATNA when looking for a job

Imagine you are still waiting to hear from a prospective employer in London about a very attractive job offer. How would you work out your BATNA if you don’t hear from them as soon as you would like? Which of the following options would seem most attractive to you? Should you:

  1. Accept the initial terms and conditions from London immediately they arrive?
  2. Seek to improve upon their initial offer?
  3. Be prepared to accept a different job in the same company?
  4. Apply for a similar job in Dubai?
  5. Start looking for a different job somewhere else?
  6. Decide to study for a further management qualification?
  7. Use the job offer from Dubai – should it come – to reappraise the attractiveness of the offer from London, should it come?
  • Are there any other options that you might identify?
  • What is your BATNA?
  • How robust do you think it is?

What negotiating ground rules will you agree?

Ground rules are a set of basic procedures of conduct. The term originally came from baseball, where ground rules are used to specify the exact nature and dimensions of the ballpark. In the early 20th century, it began to be applied more generally to the basic or governing principles of conduct in any situation or enterprise. Initial ground rules are usually agreed at the early stages of a negotiation, and can be amended subsequently by common agreement.

Many of the ground rules you agree are likely to be similar to those that you might use in a typical business meeting. One very common ground rule covers how confidentiality will be observed by the parties concerned. In addition to this, I’d suggest strongly that you include two others that are essential for successful negotiations:

  • Clarify procedures for ventilating feelings
  • Clarify procedures for requesting Time out.

Ventilating strong feelings safely and constructively

It often helps openly to acknowledge positive or negative feelings. This can be cathartic, and it can either get negotiations off to a good start or unblock negotiations that have become grounded. But this needs to be handled skilfully, and it may be best to bring in an experienced third party, such as a facilitator.