Series: Negotiation Strategies: Tips for Establishing Connection and Optimizing Results
We all do it every day: with our spouses and significant others, with our children, co-workers and counterparties, with people getting on and off of an elevator, and even while jockeying with other cars in traffic. The “it” is negotiation: exchanging verbal or non-verbal messages with a person or persons, trying to conclude an agreement on mutually acceptable terms (that’s my ‘back-of-the-envelope’ quick definition). And while the scope of the activity is universal, skills for pursuing it are, generally, unknown.
In 1982, I faced this same dilemma. I started my first (and only) law firm job as a litigation associate, handling civil cases that were predominantly settled, with no understanding and little experience in effective ways to settle them. Fortunately, my weekly review of trade journals (no internet back then) led me to the Harvard Negotiation Project (“HNP”) (https://www.pon.harvard.edu.), created at Harvard University to address key issues in negotiations and conflict resolution. The HNP’s mission is as follows:
[T]o improve the theory and practice of conflict resolution and negotiation by working on real world conflict intervention, theory building, education and training, and writing and disseminating new ideas. *
*Harvard University – Law School. harvard negotiation project. published by The President and Fellows of Harvard College. Retrieved 2015-06-30.
More importantly, this discovery led me to the seminal book on modern negotiation by two founding members of the HNP, Roger Fisher and William Ury, entitled Getting to Yes: Negotiating Agreement Without Giving In (Fisher and Ury, 1981). Reading this book provided me with objective and effective strategies for conducting negotiations. It also launched my life-long career in negotiation and alternative dispute resolution, and quest to read other books on conflict resolution and negotiation (14 at last count), in search of ways to establish/maintain connections and to identify/achieve optimum results. Despite access to all of these additional materials over the years, I consistently referred back to Getting to Yes for assistance throughout my career as in-house lawyer, executive and arbitrator/mediator.
In this article, I will discuss the key elements of Fisher and Ury’s observations and findings.
The founding premise of Getting to Yes is to identify and apply strategies designed to reach agreements without damaging business/personal relationships: essentially “separating the people from the problem.” We all understand this idea in principle, but occasionally have trouble applying it in practice. Often, we identify too personally with the strength of our positions and interpret a counterparty’s criticism of our arguments as a personal attack. Remember “be hard on the issues, not the person.” We need to step back and understand that we are people first, with varying levels of emotions, intentions and communication skills. If your counterparty seems overly emotional, you should first think “why is s/he so upset?” and respond with genuine, non-confrontational curiosity. To ensure they feel safe enough to “tell it all,” allow counterparties to fully explain their position and reasons for anger (before you respond), occasionally paraphrasing back what you’ve heard so they know you are listening. Most importantly, strive to establish a personal connection with your counterparty and build on that connection to create a level of trust. The more mutual trust you each have “in the account,” the more you can “draw on that trust” when negotiations get complex and contentious. Fisher and Ury view these topics through the three lenses of perception, emotion and communication.
Focus on Interests, Not Positions
The second, foundational premise in the book is to look behind your counterparty’s specific positions to determine their more general, motivating interests. Or, to state it simply, to answer the question, “why?”. Why is your counterparty suddenly refusing to pay the type of claim it readily processed and paid last year? What more basic corporate or personal needs are driving their positions in the negotiations? Is the person new to the job/role and trying to let their superior know that they are diligent and tough on the issues? Is the company under such mounting financial stress that it cannot afford to make one large payment now, but might prefer a payment plan? And this disclosure should not be one-sided. Each party should create an atmosphere of trust and be comfortable candidly sharing their interests.
Create Options for Mutual Gain
This point logically flows from the parties’ complete disclosure of interests. Think of the parties’ specific positions as floating in small circles next to but not touching each other. They do not overlap and appear diametrically opposed. Now imagine that the discussion of interests increases the size of each circle (since foundational motivations are typically broader than specific positions) until, like a Venn diagram, the circles overlap. This is the place where parties can identify options for mutual gain. It goes without saying that negotiating parties would prefer to settle on terms that benefit each side. The more your interests overlap, the easier it will be to develop solutions that satisfy both sides’ needs.
Here’s a quick example: Party A has been trying to collect a multimillion-dollar balance from Party B for months. Every time Party A answers a query from Party B, Party B comes up with another one, and so on. The end of the calendar year is approaching. Party A’s management wants some movement from Party B, or they will be forced to commence possibly protracted and expensive collection proceedings. Although Party A’s query responses have eliminated issues related to about 40% of the balance, Party B’s management continues to challenge the bulk of the claim, and is especially concerned about paying such a large, questionable balance close to year end.
On its face, the parties’ specific positions seem diametrically opposed. Party A wants the entire claim paid now and Party B wants answers to more queries before it pays. But what about the parties’ respective interests? Party A is under pressure to collect money at year end and its management wants some movement from Party B or they will reluctantly commence proceedings. Party B has no further issues with about 40% of the claim but doesn’t wish to concede on 100% of the claim until it has the answers it needs. These interests have expanded the circles which, like the classic Venn diagram, overlap on the following positions: Party A can get some movement from Party B if the latter pays the 40% uncontested portion of the balance (still over $1M dollars). Party B could pay 40% since it has no further question related to that percentage of the balance, while not feeling forced to pay 60% of what it considers to be the remaining, questionable amount (retaining well over $1M, more than it pays Party A). Thus, options for mutual gain are identified through a discussion of interests.
Know Your BATNA
Finally, Fisher and Ury discuss the impact of BATNA, the “Best Alternative to a Negotiated Agreement.” When preparing for any negotiation, it’s obvious that each participant should first identify where it might wind up if discussions fail to result in an agreement. Which party would be in a better position, i.e., have more leverage going into negotiations, if they have no deal coming out? The better your BATNA in relation to your counterparty’s, the more leverage you have to push or hold out for more. A good BATNA prevents you from conceding or compromising key points in fear that your opponent might walk away. Conversely, a bad BATNA permits you to go into discussions with a realistic bottom-line list of “must have” items. Note that you can take steps before or during negotiations to improve your BATNA, thus increasing your leverage. For example, if you’re chasing a balance for which a statute of limitations is about to run, and your BATNA would be to file a collection action, you can improve your BATNA by negotiating a tolling agreement with your counterparty.
This is a summary of key points from Fisher and Ury’s Getting to Yes. If you haven’t done so already, and especially if you are new to the negotiating game, I highly recommend the book, which develops these and other important points in greater detail. In future articles in this series, I will cover specific negotiation tips from Getting to Yes, other sources and my own experiences.
Peter Scarpato is an arbitrator, mediator, founding member and past board member of AIRROC, former Chair of the Publication Committee (now Digital Content Committee) and Editor-in-Chief of AIRROC Matters Magazine, and recently retired from a long and successful insurance-industry career, most recently with Chubb. He welcomes comments, questions and suggestions for new negotiation topics to address at firstname.lastname@example.org.