Negotiation: Preparation is (At Least) Half the Battle

 

August 2007

Harvard business professor Michael Watkins, in his outstanding work on negotiations entitled Breakthrough Business Negotiation, puts forth the following principles that are of critical importance to understanding the negotiation process:

All Negotiations Have Structure – You can master any negotiation by breaking it down into its most important components, i.e., the parties involved, the issues that are in play, and the interests that are underlying and driving the issues. Even so-called complex negotiations are only a system of simpler, but interlinked, negotiation structures between subgroups involved in the process.

The Structure of the Negotiation Shapes the Strategy– Every negotiation is unique because the parties, interests and issues– along with the complexity involved – is unique for every situation. For this reason, it is not wise– or even possible– to overlay a standard template onto your negotiation situation and create a default strategy that will prove successful every time. Like a work of art, you have to start from scratch with every new negotiation and develop a style, strategy and tactics that take into consideration every possible configuration of the structure that might come into play.

The Structure of the Negotiation Can Be Changed– Because a negotiation is based on the needs and interests of the people who are– or who could be– at the table, an effective negotiator will always be prepared for the possibility that people will change their minds as their needs and interests change. When this happens, the structure automatically changes, causing a need to adjust strategy and tactics. Indeed, a practiced negotiator will sometimes look for ways to change the structure himself– for instance, by inviting in additional parties – when such changes allow him to implement effective new strategies and tactics.

In light of the principles outlined above, there is one more important principle to address.

Thorough, Detailed Planning and Preparation is the Key to Controlling the Flow of a Negotiation – In order to be able to interact effectively with the structure of the negotiation, including developing and altering strategy and tactics as the negotiation unfolds, the effective negotiator will research, plan, prepare and even rehearse for every possible contingency that might come into play that might impact the structure of the negotiation.

Avoid "Killer" Assumptions

Will Rogers once said, "It is not what I don’t know that hurts me, it is what I do know that just ain’t so!" This is another way of saying that relying on incorrect assumptions can kill us!

Like many military conflicts, a great many negotiations are "lost" because those in charge of the strategy made one or more "killer" assumptions (i.e., assumptions that turn out to be completely wrong and end up killing their opportunity to achieve success). Too often, the assumption may be as simple as believing that the other party will choose what we would choose, or value what we would value, if we were in their situation. No matter what assumptions you might use to formulate your negotiation strategy, the riskiest assumption of all is to believe that your assumptions are adequate to prepare you for the situation.

Learn EVERYTHING

So it is said that if you know your enemies and know yourself, you will win one hundred times in one hundred battles. If you only know yourself, but not your opponent, you win one and lose the next. If you do not know yourself or your enemy, you will always lose.

Sun Tzu, The Art of War

Carefully consider the above statement. This means that if you expect to succeed at negotiation, you must learn EVERYTHING you can about your situation, and EVERYTHING you can about the party or parties facing you across the other side of the table, and then prepare for EVERY possible change in structure or strategy. Ultimately, this means you must test all of your assumptions for flaws and weak points, and develop multiple back up strategies based on alternate theories and assumptions, if you want to maximize your competitive advantage as the negotiation unfolds.

You can break this process down into three simple questions:

• What do I know right now about the negotiation I am preparing for?
• What is it that I know I don’t know yet, and how can I get that information?
• What do I need to know that I don’t know I need to know, and how can I discover that information?

The negotiation will not be automatically successful just because you have a "system," or because you hold the advantage in power or leverage, or because you have boatloads of charm, bluster or experience. Day in and day out, the most successful negotiators are those who out think, out plan, out research, out practice and out prepare the other side based on the fundamental components that make up any negotiation, large or small.

 

 

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August Negotiation Quick Tip of the Month – Take an Interest in Their Interests

A negotiation is driven by three key factors: Interests (the need each is seeking to satisfy), Issues (the items that are being discussed or traded) and Positions (the demand or demands – relative to one or more of the issues -- made by each side because they believe that winning this demand will best satisfy their Interests). Of these three factors, Interests are by far the most powerful influencers, but each side’s interests are often ignored or misunderstood by the other side. It is not enough to know what the other side wants; you must also thoroughly understand WHY the other side wants it. Once you understand the need the other side is trying to satisfy, it will be easier to find alternative solutions or concessions to trade that will help them get what they want while also helping you to get what you want.