Negotiation Strategy Starts with a Concept of Agreement
October 10th, 2013
The current U.S. government shutdown and debate over the Affordable Care Act reminds us that to succeed in negotiating, we must determine a feasible Concept of Agreement.
Successful negotiations require serious preparation. Many negotiators focus their research efforts on details like statistics to “use” on their negotiating partner to bully them to capitulate to their demands. They focus on posturing strength irrespective of reality. They say things like “everything is a negotiation.” This approach constitutes a philosophy of negotiations that usually will not succeed in closing an agreement.
I have found that if participants are labeling a discussion a “negotiation,” they have placed themselves at a disadvantage and will probably not achieve optimum results. The rationale is simple: they have notified the negotiating partner they cannot be trusted, and put that partner on guard: he or she is now expecting a context where “winning” is a higher priority than finding a mutually beneficial arrangement where it is less important who gets “more.”
Instead, when preparing, first the understand the basis for negotiating, that is, a mutually beneficial outcome to all parties. That outcome might be the dissolution of assets, ending an armed conflict, or agreeing a budget to keep the government operating. If one party does not share this outcome as an interest, there is no point in negotiating: they are better off trying to take what they want by force. Absent a feasible and mutual Concept of Agreement, one of the parties will not be negotiating in good faith.
Second, effective negotiators understand their goals, that is, if they reach a point where they have achieved what they came for at the right cost, they are prepared to follow through and agree. If the goal is reached before the “bottom line,” it should not matter if the partner may be gaining more benefits than originally anticipated. Otherwise, the goal posts must be shifted and it quickly becomes apparent it is only a battle of wills and egos and should be treated as such. By approaching the discussions with a mutually beneficial end state and clear goals, then creativity can arise to find solutions that were not anticipated prior to discussions, and consequently more benefits for both parties.
Moving the goal posts can be embarrassing. Think of two parties negotiating the price of a house, a buyer and a seller. There is feasible Concept of Agreement: the house is saleable and both parties presumably want the property to be sold. The buyer might offer the asking price or even more money and favorable conditions: the buyer knows what they want and what they are willing to pay. Absent other offers, the presumption is that the seller will proceed with the sale. Only now, the seller sees an offer in hand and his/her perspective changes…maybe they can get more money! Maybe the seller is thinking the buyer bid very quickly and plans to rent the house for more than the mortgage will cost. Should the seller renege on his asking price, the housing market and the seller’s trustworthiness and reputation will suffer.
Obviously the housing market would not operate smoothly without standards of contract ethics. The same goes for running the U.S. government or closing business deals. Before negotiating, know what agreement you are trying to achieve and what your goals are.