September 6, 2018

Become an expert at high-stakes negotiations

How well do you prepare for negotiation?

If you’re like most people, the answer is “not very well at all,” according to Harvard Law lecturer Douglas Stone.  He says most people avoid difficult emotions and challenging problems until they are forced to face them.  The result?  They walk into negotiations fully unprepared to get what they want or need.

A better strategy is to consider your personality, perspective and needs, the other party’s personality, perspective and needs, and how you will address their alignment … or resolve any misalignment.

Whether you’re trying to get a “win” or simply navigate a challenge, Stone says negotiators should prepare by reviewing these components:

  • interests (what each party wants, and why);
  • options (creative ways for meeting interests on both sides);
  • fairness (standards that would help both parties identify a fair deal);
  • and the best alternative to a negotiated agreement, often referred to as your “BATNA” (useful for deciding whether to say yes to an agreement, or to walk away).

To fully explore these ideas, check out a 32-item checklist from Harvard Law.

I like a lot of these ideas, especially those that underscore the importance of understanding the other party’s perspective and interests.  Here are some other negotiating tactics I urge clients to bring to the table.

SPIN Selling

Designed around sales, the SPIN idea is broadly applicable for many types of negotiation.  The idea is to ask questions that allow the other party to outline the problem, then guide them to a logical and beneficial solution (yours).  Questions should be formulated around each of the following:

  • Situation
  • Problem
  • Implication
  • Need-payoff

Imagine that your boss has asked you to take over a big and complicated project because the team managing it seems to be in disarray, with many deadlines having been missed.  You are good at this sort of thing, but have a number of other large projects on your plate and want to negotiate with your boss about what might come off your plate if you take on this messy project.

The idea is to start out by outlining how things work now (the situation).  Situation questions like this get at a description of the status quo, or current state of the problem. In this example, you might ask the boss, “what is the current workflow and management structure for the team leading this project?”

Problem questions follow up by asking the other party to state why this situation isn’t working.  A relevant question to the negotiation above might be, “what do you think is not working well for this team?  Is there something specific that has contributed to the current disarray?”

Implication questions highlight how serious the problem could be if it isn’t addressed.  In our example negotiation, you might ask, “what is the outcome to our company if this project isn’t done well?  And what are the implications to my other work if I take this project on right now?  Are there potential downstream effects on that other work that would be harmful to the company?”

And, asked in the right way, need-payoff questions essentially make your pitch for you: “If I take on the project in disarray, what could we do to offload some of the other tasks I have so we don’t face an equally negative problem with one of the other tasks on my plate?”

This approach is useful for guiding the other party to a solution that constitutes a “win” for you and for them.  Done right, it highlights your solution as a mutually beneficial resolution.

Expanding the pie

SPIN isn’t practical for all scenarios.  More often, negotiation requires a little give and take on both sides.  One way to get there while building good will between you and the other party is integrative bargaining.  You might think that when negotiating you need to hold your cards close to your chest, but integrative bargaining relies on the idea of openness at the beginning of a negotiation.  You share your interests, and the other party shares his or hers.

Again, experts from Harvard law explain:

Situations that initially look like win-lose negotiations can often be turned into opportunities for mutual gain and value creation.

This approach is outlined in the excellent book Getting to Yes, and it forms the basis of the expanding the pie idea.  If you think of negotiation as slicing and distributing a pie, wherein the less you get the more your adversary gets, it’s hard to negotiate from any position but one of hostility — or at least self interest.  If you can instead think of expanding the pie so each party gets more value than simply slicing the pie would allow, everybody has something to gain from the negotiation.

Get in the ZOPA

A final thought as you prepare for negotiation.  You need to go in knowing what you can — and can’t — agree to.  And you need to have some idea of what the other party can and can’t agree to.  The crossover in what you’re willing to accept is the ZOPA, or zone of possible agreement.  If there’s no ZOPA, you may be better off walking away rather than simply striking an agreement to resolve the negotiation.  If there is a ZOPA, it’s worth the time and effort to reach an agreement that works for both parties and maybe even expands the pie — adding value for everyone.

Even for the most comfortable negotiators, time and thoughtful preparation are key to ensuring a good outcome.

You need to go into a negotiation knowing what you want, where you’re willing to give ground, and how you might be able to address the other party’s interests to add value for everyone.

How do you prepare for negotiations?

Please share what works for you in the comments!

Last updated September 6, 2018

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