Now What…..

Now What….. I want the last remaining orange

and so do you

Focus on interests, not positions: How do interests differ from positions?

Behind opposed positions lie shared and/or compatible interests

Each side likely has multiple interests that may be valued differently by each party Find these compatible interests and then make

trade-offs Complete satisfaction for both

parties

Mythical Fixed-Pie: Piece 1 Assume there can only be one winner and

one loser (distributive bargaining approach) Fail to find mutually agreeable trade-offs

However, only a small percentage of organizational negotiations are purely distributive, involving just one resource or just one issue

Consider: Price, delivery date, financing, service,

relationships

Mythical Fixed-Pie: Piece 2 The interests of the other party

conflict with ours “What’s good for them must be

bad for us” Our theories and assumptions

about negotiation and conflict strongly impact our approaches and behaviors

SALT (U.S. & Russia) “I have had a philosophy for some

time in regard to SALT, and it goes like this: the Russians will not accept a SALT treaty that is not in their best interest, and it seems to me that if it is in their best interest, it can’t be in our best interest” Floyd Spence, U.S. Congress

Who Proposed This? The same arms reduction proposal

was reviewed by two groups of people in the U.S.A. Group 1: The arms reduction proposal

was offered by Russian President Gorbachev

How favorable was it to Russia, the U.S.? 56% said it strongly favored Russia 16% said it favored the U.S. 28% said it favored both sides equally

Who Proposed This? Group 2: The arms reduction proposal

was offered by U.S. President Reagan 27% said it favored the USSR. 27% said it favored the US 46% said it favored both sides equally

Finding Compatible Interests Pairs were presented with a negotiation

involving multiple issues. On two of these issues, the opposing sides had completely compatible interests (similar to an interest in the orange peel versus an interest in the fruit) What percentage of the time did the

negotiators make the trade-offs? 50%

Instead of realizing the gains, the other 50% typically compromised on each one

Finding Compatible Interests Two students in a library, one wants the

window open, the other wants it closed. A loud argument breaks out.

How might this be resolved? Fixed-pie assumptions Anger closes our minds to alternative solutions

Not wanting to “give in” There may be just ONE way to satisfy a

position, but there are MULTIPLE ways to satisfy interests. Inventing options for mutual gain

Dots Attempt to draw four (and only

four) straight lines that connect all nine dots without lifting your pen from the paper

Theories and mindsets The assumptions we place on a

problem, frame the problem and to a large part determine our behaviors and approach to solving the problem

Willingness to help the other party to achieve its goals

Desire to achieve O

WN

goals

Compromising

Negotiation & Conflict-handling Styles

CollaborationCompetition

AccommodationAvoidance

LowLow

High

High

Common Negotiation Styles Competing (distributive mind-set)

Your gain is my loss Compromising (the middle ground)

“Let’s split the difference” Seems like a good strategy: Isn’t it better

than no deal at all? However, the middle ground results in

incomplete satisfaction for both parties

“Leaving money on the table”

Negotiation Mindsets

Distributive IntegrativeIntegrativeCharacteristics Bargaining Bargaining

Available resources:

Primary MINDSET:

Primary interests:

View of relationships:

Fixed amount ofresources to be divided

I win, you lose

Opposed to each other

Short term

Variable amount ofresources to be divided

I win, you win

Convergentwith each other

Long term

The Negotiation Process and Preparation BATNA Interests Sitting down at the negotiation table

Convey your interests effectively Emotional Strategy

Where do you start? Defusing the “Company Policy”

argument

Preparation for Negotiation BATNA

Best alternative to a negotiated agreement Develop alternatives so you know at what

point to stop negotiating Prevents you from entering an agreement you

may regret The lowest acceptable value to an individual for a

negotiated agreement If we cannot receive an offer of X-amount for the

house, then what will you do? Rent it out?

Focus on interests, not positions Do you know your interests?

Identify and value your interests

Ranking process is one way to start Consult with team to help valuation

process

Sitting down at the table Perceive yourself working side by side

with the other party to resolve the issue Separate the people from the problem

Resist the temptation to “attack” people Where do you sit? Sit on the same side of the table

Together we can attack this problem

Presentation Approaches Option 1: “I want that orange because I

am interested in baking an orange cake and I need the peel”

Option 2: “I am interested in baking an orange cake and I need the peel, that’s why I want that orange” How are these options the same? Different? Is one approach better than another?

Why? Why not?

Find out the other party’s interests and preferences Ask questions

Listen to the response!

Concessions Find an issue of lower value to you

and offer a concession on that issue Other party will typically reciprocate

Contingent concessions I can give here if you can give on that

issue

Make multiple offers simultaneously Each is different, yet results in the

same level of profitability for you

Where do we start?A. Start with the easy issues first!B. Start with the most difficult ones

first!C. Either A or B: It dependsD. Start with all of the issues at once

Emotional Strategy Benefits of a good mood

More creative, more ideas Found most trade-offs for joint

gain Highest level of value

Detriments of anger Found fewest trade-offs Least value

Expressing positive emotion “Put on a happy face” Your smile is often reciprocated

by the other side in terms of: Positive feelings and behaviors

Finding trade-offs Offering concessions

Policy “It’s company policy – there is

nothing I can do” Two volunteers to read an

example?

Insist on objective criteria Search for a standard such as

market value, expert opinion, law This way, neither party is “giving

in” to the other and a fair agreement is possible

We are asking for $200,000 in fees How did you arrive at that figure?

Conclusions Most negotiations don’t fully

maximize value Fixed-pie assumptions are

prevalent Assume it is all or nothing Assume our interests conflict with the

other side Too quick to compromise

Reaching agreement without giving in To maximize value for you and the

other party adopt an integrative mindset Interests, not positions Develop your BATNA Adopt a problem-solving approach

Short & Long Term Benefits A collaborative approach may

seem counter-intuitive, but it is often more effective

Consider joint gains and positive word of mouth

Better over the long run