Feb 24, 2016
The Negotiation Process
“Winning is not a sometime thing. You don’t do things right once in a while…you do them right all of the time”. This is a great quote from the famous American football coach Vince Lombardi and we can apply this idea directly to negotiations. Any business undertaking does better when there is a structure, a process that is capable of creating consistent outcomes. As negotiators, if we don’t manage the process, we risk becoming passive, reactive spectators to events as they unfold. Purposeful behavior is the key to influencing win-win outcomes.
There are four stages of the negotiation we should prepare for:
Analysis
We need to identify possible alternatives available to us in reaching an agreement. There are many levers we can pull in negotiating an agreement and finding added value through those levers requires clarity around the full picture of what we are trying to achieve.
We need to see the negotiation from the point of view of our counterparty. For this we need information and perspective before we even get to the negotiating table. What position are they likely to take, what interests do they have, what forces are impacting them at the moment or will in the near future.?
We need to reframe the conversation to avoid confrontation. This means we are looking for words and deeds that speak to a win-win outcome.
Presentation
We should rehearse the other side’s presentation, as well as our own. By actually doing a dry run of their presentation, as we imagine it, we throw up insights and ideas which are very helpful for ourselves.
For our presentation, we should frame it in the language of the interests and needs of the counterparty. Talking about what we want doesn’t move us toward an agreement. Speaking their language, contemplating solutions to their issues positions us all on the same side of the negotiating table and leads to better outcomes, much faster than otherwise.
When we present we should be looking for areas where we can provide added value to the other party, through our suggested solutions. This makes it much easier for them to agree, because the take out is better or larger than they had considered.
Bargaining
We must clearly fix our BATNA (best alternative to a negotiated agreement) at the start. This is our fall back or even walk away position. It should be realistic and as close to the ideal outcome as we can manage. If we feel negotiating “tactics” are being used on us, we can just respond by suggesting an alternative solution rather than getting emotional and reacting. In our presentation we have tried to make it easy to agree to our proposal and hard to disagree. We shouldn’t make the other party work hard to reach an agreement. By being flexible we can smooth their path to acceptance.
Agreement
We should make certain we specify all point that are agreed. Things which need to be fixed, should not be left floating around. This is the time to fix them. So that there are no disputes later, we need to get the detail down in writing. Each side needs to be comfortable with the document and clear about what is covered and not covered.
There will be milestones for execution of the agreement and these need to be specified. There will be a schedule for fulfillment of the agreement and this needs to be detailed in scope. The execution piece is usually when problems arise, as more parties who are affected by the agreement become aware of the ramifications of what was agreed and may resist the agreement being completed.
We do better when we have a framework to guide us and this simple four step process will assist us in preparing for the discussion with the counterparty. We don’t need to complicate things but we do need to have a structure to help us break down the complication into bite size pieces we can tackle when they arise.