Seven Strategies for Better Negotiation & Better Results Michael T. Colatrella, J.D., LL.M Director Center for Dispute Resolution & Conflict Management.

Seven Strategies for Better Negotiation & Better Results

Michael T. Colatrella, J.D., LL.MMichael T. Colatrella, J.D., LL.MDirectorDirector

Center for Dispute Resolution & Conflict Center for Dispute Resolution & Conflict Management at Southern Methodist UniversityManagement at Southern Methodist University

©2008©2008

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Common Negotiating Mistakes Leaving value on the tableLeaving value on the table: Failing to recognize : Failing to recognize

value creating trade-offsvalue creating trade-offs

Settling for too littleSettling for too little: Making unnecessary or : Making unnecessary or inappropriately large concessionsinappropriately large concessions

Walking away from the tableWalking away from the table: Rejecting an offer : Rejecting an offer betterbetter than their alternative than their alternative

Settling for terms worse than their alternativeSettling for terms worse than their alternative: : Accepting terms Accepting terms lessless favorable than alternative favorable than alternative

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PreparationPreparation The Parties’ InterestsThe Parties’ Interests Identifying Your Goals Identifying Your Goals LeverageLeverage AlternativesAlternatives ReciprocityReciprocity Manage the Pattern of ConcessionsManage the Pattern of Concessions

The 7 Foundations of Effective Negotiating

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1. PREPARATION

Preparation is the most important part of the Preparation is the most important part of the negotiation process.negotiation process.

More than anything else it will determine your More than anything else it will determine your success as a negotiator.success as a negotiator.

Prepare! Prepare! Prepare!Prepare! Prepare! Prepare!

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Preparation: Your preparation should be:

SimpleSimple—so you can remember it—so you can remember it

SpecificSpecific—because it’s more likely to be —because it’s more likely to be attainedattained

FlexibleFlexible—to adapt to new information—to adapt to new information

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Preparation Process

You prepare for a negotiation by You prepare for a negotiation by considering each of the other considering each of the other foundations of effective negotiation.foundations of effective negotiation.

You should view the first part of a You should view the first part of a negotiation meeting as a continuation of negotiation meeting as a continuation of the preparation process.the preparation process.

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2. IDENTIFYING THE PARTIES’ INTERESTS

Interests define the negotiation:Interests define the negotiation: PositionsPositions are are whatwhat you want. you want. InterestsInterests are are whywhy you want it. you want it.

What are your interests?What are your interests?

What are the other party’s interests?What are the other party’s interests?

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Identifying Interests: Qualities of Effective Negotiators: They develop an ability to see the They develop an ability to see the

world from the other side’s world from the other side’s perspective.perspective.

They ask twice as many questions They ask twice as many questions as an average negotiator.as an average negotiator.

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3. IDENTIFYING YOUR GOALS

Set an optimistic, but justifiable, Set an optimistic, but justifiable, goals.goals.

Be specific.Be specific.

Carry a summary of your goals and Carry a summary of your goals and expectations into the negotiation.expectations into the negotiation.

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4. LEVERAGE

““You can get much further with a kind You can get much further with a kind word and a gun than you can with a word and a gun than you can with a kind word alone.”kind word alone.”

--Attributed to American gangster Al Capone--Attributed to American gangster Al Capone

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Leverage is your power to reach an Leverage is your power to reach an agreement agreement on your termson your terms. .

Donald Trump says, “Leverage is Donald Trump says, “Leverage is having something the other guy wants. having something the other guy wants. Or better yet needs. Or best of all, Or better yet needs. Or best of all, simply cannot do without.”simply cannot do without.”

Leverage Defined

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Types of Leverage

Positive LeveragePositive Leverage: Having something the other : Having something the other side wants or needs.side wants or needs.

Normative LeverageNormative Leverage: Objective sources that : Objective sources that legitimize your position. (precedent, market value, legitimize your position. (precedent, market value, professional standards, expert opinion, etc.)professional standards, expert opinion, etc.)

Negative LeverageNegative Leverage: Having the power to take : Having the power to take something away from the other side that they something away from the other side that they already posses.already posses.

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““Best Alternative to a Negotiated Agreement Best Alternative to a Negotiated Agreement (BATNA)”(BATNA)”

BATNA refers to how you will satisfy your needs BATNA refers to how you will satisfy your needs if no deal is reached with this party.if no deal is reached with this party.

““The better your BATNA, the greater your The better your BATNA, the greater your power.”power.”

(*From the book “Getting To Yes” by Roger Fisher, William Ury and Bruce Patton)(*From the book “Getting To Yes” by Roger Fisher, William Ury and Bruce Patton)

5. ALTERNATIVES IF NO DEAL IS REACHED

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Alternatives: Improve Them

Explore and invent as many alternatives Explore and invent as many alternatives as possible.as possible.

Improve them, if possible.Improve them, if possible.

Consider what the other side’s BATNA Consider what the other side’s BATNA may be.may be.

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6. RULE OF RECIPROCITY

““I am obligated to give back to you the I am obligated to give back to you the form of behavior you give to me.”form of behavior you give to me.”

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RECIPROCITY: You Can’t Beat Mother Nature

Reciprocity is found in every human Reciprocity is found in every human society because those early human society because those early human cultures that followed the “norm of cultures that followed the “norm of reciprocity” obtained an enormous reciprocity” obtained an enormous advantage.advantage.

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Reciprocity: The Secret of its Success When you operate under a system of When you operate under a system of

reciprocity, you feel free to provide reciprocity, you feel free to provide others with time, energy and resources others with time, energy and resources because because you don’t give it awayyou don’t give it away..

Instead, Instead, you get it as credityou get it as credit..

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Reciprocity: The Power of Obligation You create an obligationYou create an obligation

The obligated party will not just want to The obligated party will not just want to help, but will be waiting to helphelp, but will be waiting to help

The obligation lasts until fulfilled The obligation lasts until fulfilled

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7. Managing the Pattern of Concessions The “pattern of concessions” refers to The “pattern of concessions” refers to

the incremental, and often alternating, the incremental, and often alternating, concessions parties make in some concessions parties make in some mediations to reach agreementmediations to reach agreement

Parties often fail to reach agreement Parties often fail to reach agreement because they mismanage the because they mismanage the concession-making processconcession-making process

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Concessions are Communication The nature of concessions says The nature of concessions says

something about a party’s future ability something about a party’s future ability and willingness to concede: and willingness to concede:

Magnitude of concessionsMagnitude of concessions

Timing of concessionsTiming of concessions

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Three Rules to Remember in Managing Pattern of Concessions

Make opening offers that leave room for Make opening offers that leave room for concessions.concessions.

Explain the reasons for concessions. Explain the reasons for concessions.

Reciprocate concessions.Reciprocate concessions.

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Capitalizing on “No’s”

““If someone says “no” to you and you If someone says “no” to you and you retreat retreat fromfrom the situation you lose, but if the situation you lose, but if you retreat you retreat inin the situation you win.” the situation you win.”

~Robert Cialdini, Ph.D~Robert Cialdini, Ph.D

InfluenceInfluence