PREPARING TO NEGOTIATE CMI / VANTAGE PARTNERS, LLC

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1 PREPARING TO NEGOTIATE CMI / VANTAGE PARTNERS, LLC Much like whe we take a jourey, if we kow where we wat to go, we are better able to prepare, deal effectively with the terrai, ad kow whe we have reached our destiatio. Similarly, a clear defiitio of the elemets of successful egotiatio allows us to better prepare, diagose, coduct, ad review our egotiatios. As we have studied ad participated i egotiatios over the past twety years, we have foud that the followig elemets are preset, i oe form or aother, i ay successful egotiatio. SEVEN ELEMENTS OF NEGOTIATION Iterests are those eeds, aims, hopes, ad cocers that oe seeks to address i the egotiatio. Iterests are ot positios the stated demads, or pre-coceived aswers that people ofte brig ito a egotiatio. Istead, iterests are those thigs that uderlie or shape a positio (i.e., oe s uderlyig eeds, aims, hopes, ad cocers). Optios are the rage of possibilities o which the parties might coceivably reach agreemet. They are the possible solutios that meet at least the mai iterests of the egotiators. Ulike a alterative (see below), somethig is a optio if ad oly if makig it possible would require the agreemet of both egotiators. Legitimacy cosists of those objective criteria or stadards that ca be used to determie the fairess of a possible optio. Exteral stadards of fairess might iclude laws ad regulatios, idustry stadards, past or curret practice, some geeral priciple such as reciprocity or precedet, or some kid of objective process such as appealig to the judgmet of a impartial third party. Commitmet is the optio, or package of optios, upo which the egotiators ultimately agree. They are the oral or writte statemets about what each party will or will ot do, how, by whe, etc.. Note that there are times whe a commitmet should ot be reached, sice there are times that the egotiators caot develop a mutually agreeable solutio that is better tha what oe or both could do away from the table, without each other. Alteratives are those thigs that each egotiator ca do, without the other party, to meet his or her iterests. Alteratives are ot arbitrarily established bottom-lies, but real walk-away possibilities. They may be thigs the egotiator ca do o their ow or thigs they ca do by egotiatig with a party other tha the oe curretly at the table. Each egotiator will have a rage of alteratives (icludig doig othig, waitig, egotiatig with someoe else); some may be more realistic tha others, ad some may better meet oe s iterests tha others. Noetheless, oe of the alteratives will meet the egotiator s iterest better tha the rest this oe is the egotiator s BATNA (Best Alterative To a Negotiated Agreemet with the party with whom you are curretly egotiatig). Note that a egotiator should ot commit to a agreemet that does ot satisfy his or her iterests better tha their BATNA. CMI / Vatage Parters LLC 1030 Massachusetts Aveue Cambridge, MA Tel: Fax: CMI / Vatage Parters LLP. All rights reserved.

2 Commuicatio relates to how the two egotiators talk with oe aother. This elemet, ad the ext, relate to the process (rather tha the substace) of how the egotiatio is coducted. Commuicatio i a egotiatio ivolves the effectiveess of iquiry, advocacy, testig assumptios, buildig uderstadig, structurig the flow of coversatios, etc.. Relatioship relates to how the egotiators work ad deal with oe aother. A good workig relatioship ivolves, ad is built by, developig trust, egagig i joit problem-solvig, dealig well with differeces, etc.. DEFINING SUCCESS IN NEGOTIATIONS The Seve Elemets ca be used as a measure of a successful egotiatio. A clear defiitio of success is especially importat whe we are egaged i complex iteractios that may ivolve multiple parties, umerous issues, log-term relatioships, ad may other factors both tagible ad itagible. I these kids of egotiatios, we defie (ad measure) a good outcome as oe where we have either appropriately resorted to our BATNA, or our agreemet: [ is better (meets our iterests better) tha our best alterative (our BATNA) [ satisfies our iterests very well, ad theirs at least acceptably [ is value-maximizig, made up of the best of may optios iveted [ is legitimate, defesible i referece to objective criteria [ cosists of a commitmet that is clear, operatioal ad durable [ arose out of a process where commuicatio was clear ad efficiet [ arose out a process that helped to build a good log-term workig relatioship PREPARING TO NEGOTIATE Each elemet ad each of the above statemets of success will bear a differet amout of weight (have a differet degree of importace) i each egotiatio. Noetheless, each should be cosidered. If we choose to use these elemets to measure success, they lead us to some atural coclusios about how to prepare. For example, if we wat to satisfy our ad the other party s iterests, we would be wise to cosider what those iterests might be, before we go ito egotiatios. If we wat to create a agreemet that is made up of the best of may optios, it would be useful, prior to the egotiatio, to braistorm may possible optios. If we wat to esure tha our fial agreemet is legitimate, we should, ad so o. With this i mid, the Quick Prep tool o the followig page lays out a set of questios you might ru through to effectively prepare for egotiatios. Eve if you just have a few miutes, cosiderig the aswers to these questios will help you CMI / Vatage Parters LLP. All rights reserved. 2

3 QUICK PREP TOOL Iterests What are my eeds, aims, ad cocers? Why? How do I prioritize my eeds, aims, ad cocers? What do I thik are their eeds, aims, ad cocers? Why? What do I thik are ay key third parties eeds, aims, ad cocers? Why? Optios What possible solutios, or pieces of a solutio, might address my ad their iterests? Are there other solutios? Are there ways I ca make the oes I have iveted eve better? Goig back to the list of my, their, ad thirdparty iterests, are there ay others (eve if they are just small pieces of a overall solutio)? Legitimacy What stadards or criteria might I use with them to determie which optios are most defesible? Are there ay fair processes we might use to judge the appropriateess of certai optios? Are there ay stadards, criteria, processes, etc. that would be particularly useful to apply to particular optios I have just braistormed? To particularly cotroversial issues i the egotiatio? Commitmet What level of authority do I have to reach a commitmet? What level of authority do I thik they have? What level of commitmet do I thik we should strive for i the upcomig meetig (i.e., reach a fial commitmet, a joit recommedatio, a list of optios we will each cosider more fully before our ext meetig, etc.)? Alteratives What are my alteratives? Of these, which is my best (BATNA)? What do I thik their alteratives are? Of these, which do I thik is their best (BATNA)? How might I be able to improve mie (i.e., make it more attractive to me ad/or more possible for me to resort to)? How might I be able to weake theirs (i.e., make it less attractive to them ad/or harder for them to resort to)? Commuicatio What do I wat to lear from them? What questios should I ask? What messages do I wat to covey to them? Whe ad how should I sed the messages to esure they are uderstood i the way I ited them? What might be a useful ageda for the upcomig meetig? Have we had commuicatio breakdows i the past? If so, why? Based o this, what might I do i the upcomig meetig to (begi to) fix ad/or avoid past commuicatio problems? Relatioship What kid of workig relatioship would I like to (cotiue) to build with them (i.e., what would be the attributes of such a relatioship for example, mutual respect, well fouded trust, cosistet joit problem-solvig)? Based o my goal, what kid of thigs should I do, ad what kids of thigs should I make sure to ot do, i the upcomig meetig? To the extet we have had relatioship problems i the past, what has caused them? Based o these causes, what might I do i the upcomig meetig to (begi to) fix ad/or avoid these past problems? Other Based o my aswers to the above, where do I eed to do more thikig or homework? Is there ay iteral egotiatig, ivestigatig, or clarifyig I eed to do before goig to egotiate? Are there ay pre-discussios I wat to have with the other party before we begi egotiatios (e.g., about how we should coduct the egotiatios, how ad/or what we might each prepare ahead of time, etc.)? 1998 CMI / Vatage Parters LLP. All rights reserved. 3

4 GETTING READY Whether you have five miutes or a couple of hours, we fid that it always helps to prepare by ruig through the Quick Prep list of questios. If you oly have time to go through them i your mid, that is fie. Of course, it is eve better if you ca write your aswers dow, so that you ca refer to them as you move from questio to questio (e.g., look at the listed iterests as you ivet possible optios). As you aswer the questios, try to braistorm ivet without assessig your aswers. You ca later decide, after ivetig as may possibilities as you ca, which you thik actually make sese, ad which you might share withi the egotiatio. Also keep i mid that while it is crucial that you thik about their iterests ad possible alteratives, you are oly goig to be able to make your best guess at what those iterests ad alteratives actually are. These hypotheses, at least about their iterests, will eed to be tested i the egotiatio. Ay amout of time you sped cosiderig these preparatio questios will icrease your chaces of coductig a successful egotiatio. However, whe you fid yourself faced with a more difficult or complicated egotiatio, ad you have more time to prepare, cosider usig the attached preparatio sheet, aloe or with a small group, i advace of the egotiatio. The attached Seve Elemet Preparatio Tool is a simple ad straightforward way to structure ad capture your thoughts, ad guide you through a systematic ad effective preparatio sessio. As you cosider the elemets ad these preparatio tools, please ote that they are applicable to preparig for more tha just formal egotiatios over such thigs as terms ad coditios, scopes ad schedules, ad the like. They are, i fact, just as applicable to preparig for situatios where you must persuade or ifluece aother perso to do such thigs as cosider a ew idea, a differet focus, or a alterative way of doig somethig. Furthermore, they are just as applicable to iteral situatios with peers, maagers, ad reports, as they are to exteral oes with customers, suppliers, ad parters. The purpose of this memo has bee to offer you some advice about, ad guidace o, more effectively preparig for egotiatios. Of course, othig ca guaratee success i every egotiatio. Nor should ay guidelie be applied blidly i every cotext. Noetheless, we believe, every egotiator, o matter what style or strategy he or she might choose for coductig ay give egotiatio, ca strogly beefit from preparatio that covers the groud of the Seve Elemets CMI / Vatage Parters LLP. All rights reserved. 4

5 CMI Seve Elemet Preparatio Tool Parties Ad Issues The Parties (You may wat to draw a diagram) Iterests (List both idividual ad orgaizatioal iterests, eeds, cocers, hopes ad fears) Ours Theirs Importat Issues (Subjects that eed to be dealt with) Others Coflict Maagemet, Ic. All rights reserved. SEVEN ELEMENT PREP TOOL - 2

6 CMI Seve Elemet Preparatio Tool Optios Legitimacy (List possible optios for each issue or major iterest) Issue #1 (Idetify objective stadards relevat to ay issues or optios you have idetified) Issue #1 Issue #2 Issue #2 Issue #3 Issue # Coflict Maagemet, Ic. All rights reserved. SEVEN ELEMENT PREP TOOL - 3

7 CMI Seve Elemet Preparatio Tool Alteratives Commitmet Your Alteratives (circle your BATNA) Elemets of a framework agreemet at the ed of a egotiatio Ways to improve What authority do you have? Their Alteratives (circle your estimate of their BATNA) What authority does the other party have? Ways to test or, if appropriate, worse 1997 Coflict Maagemet, Ic. All rights reserved. What level of commitmet do you wat? This Next Ed Meetig Meetig(s) Expressig Views? Geeratig Optios? Joit Recommedatios? Tetative Agreemet? Firm, Siged Deal? SEVEN ELEMENT PREP TOOL - 4

8 CMI Seve Elemet Preparatio Tool Relatioships Commuicatio Curretly Preferred Pla the Meetig Meetig purpose Products or outputs People Process Opeig Ageda Roles of team members Groudrules Pla the Dialogue Liste for/questios to ask Talk about/iformatio to disclose Possible commuicatio problems/possible steps to avoid problems or improve commuicatio Assumptios to test If gap exists, diagose possible causes. I light of these causes, what specific steps might you take to chage the curret relatioship to the preferred oe? 1997 Coflict Maagemet, Ic. All rights reserved. SEVEN ELEMENT PREP TOOL - 5

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