Getting to Win-Win

Week7 Mar 3-7 2008: On Wednesday 5th we had an all day workshop on negotiation skills hosted by the Harvard School of Engineering and Applied Sciences. The workshop was given by Melissa Manwaring, Director of Curriculum Development for the Program on Negotiation at Harvard Law School. Melissa has taught negotiation theory and skills to thousands of clients around the world, including executives, attorneys, public servants, educators and students.

Melissa introduced us to a framework of negotiation called The Seven Elements, which consists of 7 independent, non-sequential, dynamic elements, as shown in the diagram. The framework can be used at any stage during a negotiation including as part of preparation prior to the negotiation, in analysing/diagnosing issues occurring during a negotiation, after the negotiation to evaluate aspects of it. The framework itself is the result of research carried out by Bruce Patton and his colleagues at Harvard Law School. You can read about it in chapter 18 (‘Negotiation’ by Bruce Patton) of ‘The Handbook of Dispute Resolution’. If you’re interested the best selling negotiation book in history would be worth reading also: ‘Getting to yes: Negotiating Agreement Without Giving In’ (Google Books, Amazon, WiKi).

It’d be impossible to detail everything we learned throughout this workshop but I’ll detail some of the main lessons and take-aways which I think will prove useful to others during negotiations. My favourite part of the was learning about how people perceive concessions and compromises during negotiations, as discussed below under the 4th element – Legitimacy. Check out the small graphic which represents in a very simple way how I perceive this process (of particular interest to me is where you place the ‘pseudo bottom line’ and the difference between that and your real bottom line).

Alternatives are considered away from the table and don’t require the other party’s agreement. You need to determine your BATNA (Best Alternative To a Negotiated Agreement) and try to discover the BATNA of others in a negotiation. Try to improve your own BATNA and worsen others (in appearance or in reality)! During negotiation compare any potential agreement to your BATNA and realise that the other party will likely do the same.

Interests define a party’s true needs/desires/concerns. Not always the same as stated positions. Positions = what parties say they want. Interests = why they want it. ID & prioritise your interests and try to ID theirs. To determine their interests (when they’re not stating them): make a proposal; if not accepted deduce their interests from their criticism of this proposal (e.g. ethics, timing, finance, value). Look for areas of potential clash and/or overlap. Distinguish interests from positions. Offer ‘yesable’ proposals that address their interests. Look for ways to trade on differing interests.

Options are the deals on the table which you might make or agree on with parties in the negotiation. Different options may exist for different issues. Before the negotiation: generate options for meeting both parties’ interests. During the negotiation: separate inventing from deciding; & package options on different issues.

Legitimacy is one of the most powerful elements. It describes external criteria, standards & norms that can support the fairness of what you/they are proposing. Can help select among many options – to support a proposal, & also to protect against an unfair proposal. Research these norms in advance, e.g. market price for a specific product.

– During a negotiation when a party is making smaller compromises/concessions => closer to bottom line (real selling price/limit)? As a seller narrow your compromises long before your real bottom line. As a buyer know your market and the standard bottom line or value for the product (e.g. house)! Compromise does not imply value. If SP is fair to start with then deal is fair despite lack of concession. Don’t measure success based on how much you/they concede- measure the deal objectively based on value. Identify the ZOPA – Zone of Possible Agreement. Amount paid has NOTHING to do with budget, only market value.

¦———Starting Selling Price———-¦
¦——————-Ideal SP——————-¦
¦——-{Smaller compromise units}——¦
¦————Pseudo Bottom Line———–¦
¦-{Diff of units enabling effective Neg}-¦
¦————–Real Bottom Line————¦
¦                                                                   ¦
¦—————–Cost Price——————¦

Relationship is the element that defines how a negotiation affects relationships between parties/their agents/their constituencies. Before a negotiation: compare current relationships with preferred relationships; diagnose cause of any existing gaps; ID steps to change the relationship. During the negotiation: consider effect of various moves/options on relationships.

Communication includes all types of verbal & non-verbal information exchanged between parties. Before the negotiation: decide what you want to listen for/ask about, disclose/say; ID possible communication barriers (diff background/language). During the negotiation: test for efficient communication – demo you understanding, and inquire about theirs. Real listening -> responsive to interests & concerns. Don’t prepare response when should be listening. Internal voice distracting as result of lack of prep and being nervous, both of which can be combated using 7 elements.

Commitment is all about the agreement. Before negotiation: confirm levels of authority (Have authority to agree/commit? Require input from BoD or business partner?); ID your preferred level of commitment. During negotiation: ensure any commitment are operational and durable (if desired); consider building incentives/penalties into commitment to ensure agreements are met, and in timely manner; determine how to confirm the agreement – writing/handshake/etc.

Having studied the seven element framework for negotiation we put our new found haggling abilities to the test. Half of the 20 person group took one side of a sales negotiation and the other half took the other side. The case study for this involved a corporate drinks company negotiating a deal with a distributor in the Middle Eastern country. This exercise was a great testbed for our understanding of the 7 element. It proved difficult to employ all the new techniques simultaneously during a heated negotiation but a lot was learnt regardless.

Melissa discussed lots of other topics during the day including Anchoring. This is the theory that the first figure on the table during a negotiation has a disproportionate affect on the final agreed figure! However this first figure must obviously be well researched & justifiable, presumably based on market value; similar to when buying a house. Determine if it’s a buyer’s/seller’s market. What alternatives exist for each party? Who’s in the dominant position?

Some difficult tactics during negotiation include:
– Ultimatums – “take it or leave it!”
– Say nothing – “make me an offer”
– Demanding advance commitment
Responses to these tactics should be purposive, not just reactive. Don’t react without careful consideration. Some possible responses include:
– Surrender/quit/play the game…
– Change the game by reframing interests (ask for reasoning), options (incentives) and criteria (justification).
– Change the game by naming & engaging: describe my experience of the dynamic; inquire about their experience/purposes; joint problem solve for new approach
– Change the game by changing the players: add/subtract/change parties


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