BA225

1. Because learning changes everything.®
Essentials of
Negotiation
Part 04: Summary and Best
Practices
Chapter 12: Best Practices in
Negotiation
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Ten Best Practices for Negotiators
1. Be prepared.
2. Diagnose the fundamental
structure of the negotiation.
3. Identify and work the BATNA.
4. Be willing to walk away.
5. Master the key paradoxes.
• Claiming vs. creating
value.
• Sticking to your principles
vs. going with the flow.
• Sticking to your strategy
vs. pursuing options.
• Being too honest vs. being
too closed.
• Being too trusting vs. being
too distrusting.
6. Remember the intangibles.
7. Actively manage coalitions
8. Savor and protect your
reputation.
9. Remember that rationality and
fairness are relative.
10. Continue to learn from your
experience.
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Be Prepared
Preparation cannot be overemphasized and leads to several advantages.
• Understanding your own interests and BATNA.
• Analyzing the other party’s offers effectively and efficiently.
• Understanding the nuances of the concession-making process.
• Allowing you the ability to achieve your negotiation goals.
Preparation should occur before the negotiation begins.
• Understand your own goals and interests and articulate them skillfully.
• Understand the other party’s communication and needs.
Good preparation means setting high but achievable outcome aspirations.
• Plan your opening statements and positions carefully.
• Over-planning is not a good use of preparation time.
Prepare by understanding your own strengths and weaknesses, your
needs and interests, the situation, and the other party then adjust
promptly and effectively as the negotiation proceeds.
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Diagnose the Fundamental Structure of the Negotiation
Assess whether you are in a distributive or an integrative negotiation.
• Choose your strategies and tactics accordingly, as using mismatched
strategies and tactics leads to suboptimal outcomes.
• This leaves money and opportunity on the negotiating table.
Remember, negotiations consist of a blend of
integrative and distributive elements and phases.
• Be careful when transitioning between phases
as missteps can lead to confusion or impasse.
At times,
accommodation,
avoidance, and
compromise may
be appropriate
strategies.
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Identify and Work the BATNA
The best alternative to a negotiated agreement (BATNA) is especially
important as this is likely the outcome should agreement not be reached.
• Know what your BATNA is relative to a possible agreement and
consciously work to improve the BATNA, and improve the deal.
• Without a strong BATNA you may find it difficult to achieve a good
agreement.
• The other party may try to push you aggressively, and you may be
forced to accept an unsatisfying agreement.
You need to be aware of the other’s BATNA and identify how it compares
to what you are offering.
• Monitor it to retain your competitive advantage.
• Remind the other negotiator how your offer relates to their BATNA.
• Subtly suggest the other’s BATNA may not be as strong as they think.
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Be Willing to Walk Away
The goal of negotiation is a valued outcome, not just ‘an agreement’
• Strong negotiators are willing to walk away if the following happens.
• No agreement is better than a poor agreement.
• When the process is so offensive that the deal isn’t worth the work.
• When they don’t trust the other party to follow through.
Negotiators can focus on an agreement and lose
sight of the real goal, which is a good outcome.
• Compare progress with targets set in planning.
• Compare with your walkaway point and BATNA.
• Continue to compare progress and be willing to
walk away.
Even without a
good BATNA, you
should have a clear
walkaway point in
mind where you
will halt
negotiations.
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Master the Key Paradoxes of Negotiation
Negotiation embodies a set of paradoxes and strong negotiators strive for
balance when facing these challenges.
• Claiming value versus creating value.
• Sticking by your principles versus being resilient enough to go with the
flow.
• Sticking with your strategy versus opportunistic pursuit of new options.
• Being too honest and open versus being too closed and opaque.
• Being too trusting versus being too distrusting.
There is a natural tension in choosing one of the alternatives in a paradox.
• The best approach is to attempt to strike a balance.
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Claiming Value versus Creating Value
All negotiations have a value-claiming stage, and many also have a
value-creation stage.
• The skills and strategies appropriate to each stage are quite different.
• In general terms, distributive skills are useful in the value-claiming
stage and integrative skills are useful in value creation.
Typically, the value creation stage precedes the
value claiming stage.
• A challenge is to balance emphasis on the two
stages and the transition between them.
• One way to manage the transition is to publicly
label it.
Managing this
paradox will likely
require an
overemphasis on
discussing the
value creation
dynamics early in
the process.
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Sticking by Your Principles versus Being Resilient Enough to
Go with the Flow
Negotiation pace and flow can change, often creating a second paradox.
• Effective negotiation requires flexible thinking.
• On the other hand, you should not easily abandon your core principles.
Effective negotiators are thoughtful about the distinction between:
• Issues of principle where firmness is essential,
• And issues where compromise is a route to an acceptable outcome.
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Sticking with Your Strategy versus Opportunistically
Pursuing New Options
New information frequently comes to light during a negotiation.
• Manage the paradox between sticking with your prepared strategy and
pursuing a new opportunity that arises during the process.
• This is a challenging paradox because new “opportunities” may be
Trojan horses harboring unpleasant surprises.
• The challenge for negotiators is to distinguish phantom opportunities
from real ones—it comes with experience.
Strong preparation is critical to being able to manage the “stay-with-the-
current-strategy versus opportunism paradox.
• Well prepared negotiators who understand the circumstances are well
positioned to make this judgment and listen to your intuition.
• If a deal doesn’t feel right, it is probably not a viable option.
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Being Too Honest and Open versus Being Too Closed and
Opaque
The dilemma of honesty: How open and honest should I be?
• Negotiators who are completely open risk being taken advantage of.
• Negotiators who are closed gain a negative reputation using an
ineffective strategy.
The challenge is deciding how much information to reveal or conceal.
• Remember that negotiation is an ongoing process.
• Positive progress builds trust and comfort revealing information.
• Remember, some information that should probably not be revealed.
• Such as your bottom line in a distributive negotiation.
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Being Too Trusting versus Being Too Distrusting
The dilemma of trust: How much can I trust what the other party tells me?
• If you believe everything the other party tells you, you are vulnerable.
• On the other hand, if you believe nothing, there is no agreement.
Remember that negotiation is a process that evolves over time.
• Build trust by being honest and sharing information with the other side.
• This may lead to reciprocal trust and credible disclosure by the other.
Moreover, there are individual differences in trust.
• Some negotiators are more trusting than others.
There is no right or wrong approach to managing this dilemma.
• Strong negotiators are aware and consciously monitor how they are
managing this challenge.
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Remember the Intangibles
Intangibles frequently affect negotiation in a negative way, and often
operate outside of awareness.
• The best way to identify the existence of intangible factors is to try to
see what is not transparently there.
• Often negotiators do not learn what intangible factors are influencing
the other negotiator unless the other chooses to disclose them.
There are at least two more ways to discover
intangibles that might be affecting the other.
• One way is to ask questions.
• A second way is to take an observer or listener
with you to the negotiation.
Remember that
intangibles
influence your own
behavior.
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Actively Manage Coalitions--Those against You, for You, and
Unknown
Strong negotiators work to capture a strong, supportive coalition.
• If this is not possible, negotiators need to work to prevent the other
party from capturing a loose coalition for their own purposes.
Recognize when coalitions are aligned against you and work consciously
to counter their influence.
• This may involve a divide-and-conquer strategy.
Coalitions occur in many formal negotiations, but also have a strong
influence in less formal settings.
• Managing coalitions is especially important when negotiators need to
rely on other people to implement an agreement.
Strong negotiators need to monitor and manage coalitions proactively.
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Savor and Protect Your Reputation
Starting negotiations with a positive reputation is essential, and
negotiators should be vigilant in protecting their reputations.
• Consider these contrasting reputations: tough but fair versus tough
and devious.
• Negotiators prepare differently for each of these contrasting
reputations.
You can work to shape and enhance your reputation by acting in a
consistent and fair manner.
• Consistency gives the other party a clear set of expectations about
how you will behave, leading to a stable reputation.
• Fairness sends the message that you are principled and reasonable.
Strong negotiators seek feedback about the way they are perceived and
use that information to strengthen their credibility and trustworthiness.
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Remember That Rationality and Fairness Are Relative
People tend to view the world in a self-serving manner and define the
“rational” thing to do or a “fair” outcome in a way that benefits themselves.
• Be aware of this tendency in both themselves and the other party and
do three things to manage these perceptions proactively.
• Question your perceptions and ground them in clear principles.
• Find external benchmarks and examples that suggest fair outcomes.
• Illuminate definitions of fairness and reach consensus on which
standards of fairness apply in a given situation.
Reasonable people can disagree, the outcome negotiators can achieve is:
• A common, agreed-upon perspective.
• Definition of the facts.
• Agreement on the right way to see a problem.
• A standard for determining what is a fair outcome or process.
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Continue to Learn from Your Experience
The best negotiators continue to learn from the experience because no
two negotiations are identical.
• A “master negotiator” is a person who has a blend of intelligence,
attitudes, and skills.
In addition, the best negotiators analyze each negotiation after it has
concluded, to review what happened and what they learned.
• Plan a personal reflection time after each negotiation.
• Periodically “take a lesson” from a trainer or coach.
• Keep track of strengths and weaknesses, and work on weaknesses.
• If you often negotiate against the same person, record their evolution.
Analysis should focus on what, why, and how questions.
• What happened during this negotiation?
• Why did it occur?
• How can I learn from this experience?
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© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.