For the ten years I taught Negotiation at UC Hastings College of the Law and UC Berkeley Law, I assigned my students the task of submitting a planning memo before each simulated negotiation exercise. I will level with you: they considered it tedious “busy work,” to which I would say, “you’re welcome.”
Entering into a negotiation without preparation or a plan is like walking into a casino with an open wallet. Even when I could discern from the contents of my students’ memos that they approached it as a “check the box” exercise, they were still developing an important habit. Generally, I recommended that they use the Appendix B planning guide that G. Richard Shell offers in his book “Bargaining For Advantage,” which was also an assigned text (and an excellent primer on negotiation). This issue of the Pactum Factum newsletter will discuss some of the aspects of that planning guide, supplemented by my own notes and strategies from experience over the years.
Simply reading through the steps isn’t adequate; you need to actually hunker down and do the work of fleshing out each step, in writing:
STEP 1: Context, Players, Problem Statement / Issue Identification
Consider the context of this negotiation. Is it “high stakes?” Is preserving the relationship important? Is it purely transactional? Is it a hybrid of transactional and relational? Which conflict “mode” would be most effective for the context (see February 2017 blog issue on the TKI Conflict Mode Instrument). This first step should also include an effort to define the problem(s) / issue(s) at stake and creating a list of issues or agenda for the negotiation. It’s easy to lose track of issues once you’re in the thick of it. Think about comparing your problem statement with the other side in advance of the negotiation and setting an agenda of the issues all parties wish to cover. This can save time at the outset of bargaining, and minimize frustrations from cropping up right out of the gate.
This step should include any research you can reasonable conduct on the people who you will be negotiating with. Find out who will be present at the bargaining table and conduct some internet sleuthing. Where are they from? What is their background and education? What makes them tick? Do you both like dogs? What other commonalities or potential obstacles can you discover?
STEP TWO: Interests
Develop different types: concrete, psychological and procedural. And consider whether they may be shared interests with the other side, conflicting or ancillary.
Mine
Theirs (known or guesses)
STEP THREE: Specific Goals
Too many people approach a negotiation with a goal of “doing the best I can.” Vague and unprincipled goals lead to lackluster results. G. Richard Shell teaches us that negotiators who develop high, specific, justifiable goals accomplish approximately 40% better results than negotiators with amorphous goals. Let’s break this down:
“High” means a starting point that you can communicate with a straight face, but one that you don’t realistically expect to achieve. Leave yourself room to make concessions and show the other side that you have been willing to come their direction. People like to feel that the outcome of a negotiation was “hard won.”
“Specific” means crunching numbers for a precise calculation, as well as any other attributes needed to make your goal durable and practical (who, what, when, where, how).
“Justifiable” means that when you are asked how you arrived at that demand, you can refer to objective standards and metrics to back it up (see step four). This works both ways: when the other side presents their offer, you should always ask, “How did you calculate that?”
You also need to know what your Reservation Point (aka “Bottom Line”) is – that is, the point at which you walk away from the bargaining table because no deal is better than a “bad” deal. This includes what Roger Fisher and William Ury have famously coined as BATNA – understanding what your Best Alternative To a Negotiated Agreement is (i.e. if you can’t get a deal, what’s your best backup plan. You should also consider your WATNA – Worst Alternative . . . and MLATNA . . . Most Likely Alternative).
STEP FOUR: Authoritative Standards & Norms
Be specific about standards or objective criteria that will favor you, standards you believe they will use, and think about how to work with their standards or convince them that yours are more relevant or appropriate. Objective standards & norms means those that neither party can manipulate.
Mine
Theirs
My Counterarguments
STEP FIVE: Leverage
Assess who you think has leverage going into the negotiation (bearing in mind that leverage is dynamic and can shift through the course of a negotiation and the process of gathering information, not to mention external factors). Be sure to evaluate positive, negative and normative leverage
Mine
Theirs
If no deal, their alternative is:
STEP SIX: Third Parties
Are any third parties a factor; or can a third party be used as an audience / excuse / justification? Though don’t make the mistake of omitting necessary decision-makers from the bargaining table. One of the basic requirements of each party in a mediation with me is that any necessary decision-makers must be present. If you’ve been negotiating over the course of hours, days or weeks without a final decision-maker participating in that journey, it can all fall apart.
STEP SEVEN: Possible Creative Ideas/Proposals
Although true brainstorming is time-consuming and best accomplished together with the other parties, it’s worthwhile to start this in the planning stage. How can you build on shared interests, Bridge conflicting interests, create options? Be creative at this stage without “culling” your ideas too much. The culling comes later when you gauge if the other side is open to the idea, and then you start to test practicality and durability of creative options.
STEP EIGHT: Plan for Use of Information
Do not skip over this step! “Give/Get/Guard” means considering what information you are willing to give (or want to make certain they hear); what information you need to try to get from the other side; and what information you need to guard from the other side discovering (and consider ways to do so: answering a question with a question; answering a different question from the one they asked; being transparent and communicating clearly that you cannot divulge such-and-such information, etc.)
STEP NINE: Concession Plan
Related to step three: map out the concessions you are willing to make during the course of bargaining. Think through all the possible ways you can build concessions into the negotiation to show the other side you are “giving up” something(s). Concessions can be monetary or otherwise; tangible or intangible items. Smart negotiators even plan for “false concessions,” – that is, the appearance of giving up something that does not, in reality, matter much to you (and be aware that the other side may be doing the same thing).
STEP TEN: Personal Reflection
Think about ideas for increasing your effectiveness and managing your own emotions, reactions, and personal goals in this particular negotiation. Take a few moments to consider what could trigger you emotionally and strategies for handling yourself if that happens. If you are negotiating in a team or with your attorney, is there a code word you can agree upon in advance that lets the other person know it’s time for a break or that you are becoming upset? Note that this requires true presence of mind in the negotiation. When I was a fledgling attorney, I would hold a small smooth stone in my hand; it was cool to the touch and helped me remain calm and grounded. Did I still get overwhelmed or feel out of my depth? Yes. But the key was that I didn’t yield to false pressure tactics and knew enough to adjourn and reconvene after I’d had time to think or consult a more senior colleague for advice. If you feel like the other side is applying pressure for you to respond to one of their proposed options or demands immediately, this is a flag; ask yourself how likely it is that the pressure is “real” versus manufactured by them – and what that might signify. Absent true time pressure by an authoritative an objective source, don’t allow yourself to be rushed.
Lucia Kanter St. Amour, Pactum Factum Principal