Prepare to Negotiate

Characteristic	Single-Issue Negotiations	Multiple-Issue Negotiations
Number of issues involved	One	Several
Outcome	Win-lose	Win-win
Motivation	Individual gain	Joint and individual gain
Interests	Opposed	Different value and priority placed on issues
Duration	Short term	Short or long term
Ability to make trade-offs	Not flexible	Flexible
Solution	Not creative	Creative

In real life, most negotiations involve more than one issue. In these cases, both parties can work together to find solutions that benefit both of them. This is different from a win-lose situation, where one party gets what it wants and the other party doesn’t.

In multiple-issue negotiations, it’s important to find a balance between your priorities and the other party’s priorities. You may need to give up some things to get what you want, but the other party may also be willing to give up things to get what they want.

The key to successful multiple-issue negotiations is to be collaborative and to build trust with the other party. Both parties need to understand each other’s needs and goals to find mutually beneficial solutions.

The Negotiator’s Dilemma

Negotiation strategies aren’t always clear-cut and straightforward. In many cases, negotiations blend elements of both competitive tactics, as seen in single-issue negotiations, and cooperative strategies, as seen in multiple-issue negotiations. This interplay between the two approaches gives rise to what is commonly referred to as the negotiator’s dilemma.

Within the framework of the negotiator’s dilemma, four distinct scenarios come into play:

Scenario	Your outcome	Other party’s outcome
You compete and the other party cooperates.	Great	Terrible
You and the other party share information and fully cooperate.	Good	Good
You and the other party compete.	Mediocre	Mediocre
You cooperate and the other party competes.	Terrible	Good

As shown in the table, the most rational choice often is to be competitive, but this can be risky if the other party is also competitive. If both parties are cooperative, then everyone can win. However, it is difficult to know what strategy the other party will use, so it is important to be prepared for anything and to be flexible in your approach.

Determine the scope

Another crucial aspect to take into account when preparing for a negotiation is its scope. The simplest form of negotiation involves two individuals meeting once, with the outcome being either an agreement or both parties walking away. However, within organizational contexts, such straightforward negotiations are uncommon. The majority of negotiations entail more than just two parties and often unfold in multiple phases, with each phase dedicated to distinct issues.

When multiple parties are involved in negotiations, the possibility of coalitions or alliances forming among various groups becomes a noteworthy factor that can influence both the process and the ultimate outcome. These coalitions can manifest in several ways:

1. Natural Coalitions: These alliances naturally emerge between like-minded allies who share common interests. For instance, an environmental agency and a nature conservation group might find themselves aligned in their fundamental objectives. Such groups often collaborate to thwart development initiatives, even in the absence of an explicit agreement.
2. Single-Issue Coalitions: These coalitions materialize when parties with differing positions on other matters unite to support or oppose a particular issue, often driven by distinct motivations. For example, a labor union and a nature conservation group might form a coalition to oppose a developer with anti-union inclinations planning to build a shopping mall in a wooded area. Each group joins the coalition for different reasons.

When confronted with a coalition, it’s essential to contemplate strategies for potentially disbanding it. Breaking apart a natural coalition can prove challenging since the participating parties are closely aligned in their interests. On the other hand, a single-issue coalition tends to be more susceptible because the involved parties have divergent motivations for joining. In such cases, you might be able to address the demands of one party, leaving the other party isolated in its stance.

Number of phases:

Negotiations frequently unfold across multiple phases, with each phase representing a distinct stage in the negotiation process. Once parties successfully navigate one phase and honor their agreements, they proceed to the subsequent phase, gradually advancing toward their final objectives.

To effectively navigate multiphase negotiations, consider the following strategies:

• Understanding Communication and Negotiation Styles: Familiarize yourself with the communication and negotiation styles employed by the other party. This knowledge becomes particularly valuable as negotiations progress to more critical phases.
• Monitoring Agreements and Promises: Vigilantly track the other party’s adherence to agreements and commitments. If your counterparts fail to uphold their end of the bargain during the early phases, contemplate the possibility of walking away. Alternatively, you can explore the implementation of enforcement mechanisms or sanctions for non-performance during later stages.
• Balancing Significance Across Phases: Ensure that the final phase does not carry the most significant financial or operational impact. This precautionary measure helps safeguard against potential breaches of the agreement by the other party and provides added protection throughout the negotiation process.

Set goals

Before stepping into a negotiation, it’s essential to establish clear objectives. While many may initially assume that the primary aim is to secure the best price or the most favorable terms, it’s important to recognize that negotiations often encompass broader, loftier goals. These might include forging a solid business relationship or attaining the status of a preferred vendor.

Setting specific goals can serve several vital purposes:

1. Defining Your Desired Outcomes: Goals help you articulate precisely what you aim to achieve through the negotiation.
2. Providing Motivation: They serve as a source of motivation, driving you to work diligently toward your desired results.
3. Measuring Success: Goals offer a tangible means of measuring the success of the negotiation process.

However, the effectiveness of your goals is contingent on your commitment to them. To solidify your dedication to these objectives, consider the following steps:

• Document Your Goals: Write down your goals, ensuring they are clear and well-defined.
• Seek Input: Discuss your goals with others, as their perspectives and insights can enhance your goal-setting process.
• Bring Your Goals: Carry your written goals with you to the negotiation. They will serve as a valuable reference point, helping you maintain focus on your priorities, particularly during moments when emotions run high or the urge to win purely for the sake of winning arises.

Establish your position

Before beginning any negotiation, you need to have a solid understanding of your limits and options. Your success depends on your knowledge of four concepts:

Concept	Definition
Best alternative to a negotiated agreement (BATNA)	Your option if you fail to reach agreement during a negotiation
Walk-away position	The least favorable point at which you’ll accept a negotiated deal; otherwise, you walk away
Zone of possible agreement (ZOPA)	The range in which a potential deal can take place, defined by the overlap between your walk-away position and the other party’s walk-away position
Value creation through trades	The trading of goods or services that have only modest value to their holders, but exceptional value to the other party (this primarily applies to multiple-issue negotiations)

Analyze and improve your BATNA

BATNA stands for Best Alternative to a Negotiated Agreement. It is a crucial concept in negotiations, representing the most advantageous course of action for a party if an agreement cannot be reached. Understanding one’s BATNA is essential for determining the viability of a potential deal and setting realistic expectations during negotiations.

Significance of BATNA in Political Negotiations

1. Determining Negotiating Power: A strong BATNA enhances a party’s negotiating power by providing a viable alternative to reaching an agreement. This knowledge empowers them to take a more assertive stance and negotiate from a position of strength.
2. Assessing Deal Viability: BATNA serves as a benchmark against which potential agreements can be evaluated. If the terms of a proposed deal fail to surpass or even match the party’s BATNA, it signals that the deal is not worth pursuing.

Determine your walk-away position

Your walk-away position, often referred to as the reservation price, signifies the absolute minimum point at which you would be willing to accept a proposed deal. Should your counterpart’s ultimate offer fail to meet or surpass your walk-away position, it prompts the conclusion of the negotiation without an agreement being reached.

It’s important to note that while your walk-away position is influenced by your BATNA (Best Alternative to a Negotiated Agreement), the two are not necessarily identical. Your walk-way position should ideally reflect a slight enhancement over your BATNA. This ensures that you are not merely settling for what you can already achieve outside of the negotiation but rather seeking an improved outcome through the negotiation process.

Know your authority

When gearing up for negotiations on behalf of your organization or a third party, it’s paramount to possess a clear understanding of the type of deal you have the authority to craft. Before embarking on negotiations, ensure that you can confidently address these critical questions:

1. Negotiation Objectives: What are the primary objectives driving this negotiation? What are the desired outcomes?
2. Deal Authorization: Is there a singular deal that has been sanctioned and authorized for you to negotiate, or do you have some latitude in structuring the deal creatively?
3. Structural Flexibility: To what extent do you possess the freedom to determine the structural components of the deal, beyond financial considerations?
4. Deal Variables: Apart from monetary aspects, what other factors are within your purview to include in the negotiation? How flexible are you in accommodating these variables?
5. Signing Authority: Are you empowered to unilaterally approve and sign off on the deal, or is there a formal process in place that necessitates review and approval of the deal’s terms by higher authorities?
6. Information Sharing: Do you have the authorization to disclose information regarding your organization’s needs, interests, and preferences, especially if the other party engages in a good-faith, reciprocal exchange of information?

Having clarity on these aspects ensures that you enter negotiations well-prepared and equipped with the necessary authority to navigate the deal effectively.

Assess the other party’s position

Enhancing your knowledge about the organization and individuals you are engaging with in negotiations significantly bolsters your position throughout the negotiation journey. To bolster your understanding of the other party, adopt a proactive approach that involves inquiring, consulting with individuals familiar with the other party, and conducting thorough research on pertinent sources such as websites, annual reports, and marketing materials.

Ideally, your quest for information should aim to uncover:

Information about your counterparts	Information about the organization
Who you’ll be negotiating with and their formal titles and areas of responsibility	How the organization is structured and decisions are made
Their personalities, styles, backgrounds, and interests	Its culture, goals, and values
How long they have been with the organization and their relevant experience	Its business circumstances, including the strength of its financial performance, its strategy, its key corporate initiatives, and the competitive pressures it faces
How they are viewed within their organization	The value the deal has to the other side and the objectives the other party is trying to meet by making this deal
How they have performed in previous negotiations	How easy it would be for the other party to make an alternative deal with someone else
	The terms that would satisfy the other side

Estimate the other party’s BATNA and walk-away position

Efforts to uncover your counterpart’s BATNA (Best Alternative to a Negotiated Agreement) and walk-away position can be instrumental in refining your negotiation strategy, pinpointing valuable factors, and forecasting the negotiation’s trajectory.

It’s worth noting that your opposing negotiators are often reluctant to openly disclose this critical information and may even resort to bluffing. Nevertheless, there are several proactive measures you can take to unearth it:

1. Leverage industry contacts: Tap into your network and industry contacts for insights.
2. Consult Business Publications: Peruse relevant business publications that might provide clues.
3. Analyze Annual Reports and Public Filings: Scrutinize annual reports or public filings, where valuable information may be buried.
4. Leverage internal sources: Gather intelligence from individuals within your organization who may have insights into the other party.

Based on the data you gather, it’s advisable to contemplate potential alternatives your counterparts might be exploring. Put yourself in their shoes and envision the actions you would take to establish and fortify your BATNA. Additionally, anticipate and prepare responses for any objections your counterpart might raise against your proposals. This comprehensive approach equips you with a more strategic and informed stance during negotiations.

Determine who has the authority

The most effective approach is to engage directly with an individual vested with decision-making authority. This practice serves a dual purpose: it shields you from embarking on a path leading to unrealistic outcomes and mitigates the potential for misinterpretations. Therefore, it is imperative, prior to initiating negotiations, to ascertain both the identity of the decision-maker and the inner workings of the decision-making process within the other organization.

In cases where direct negotiation with the ultimate decision-maker is unfeasible, it becomes essential to ascertain the extent of authority possessed by the negotiator you will be dealing with, enabling you to adapt your strategy accordingly. It is worth noting that negotiating with individuals who lack full decision-making authority can present advantages. They may enjoy greater flexibility to delve into their organization’s interests and explore inventive avenues for reaching mutually beneficial agreements.

Evaluate the zone of possible agreement

Once you’ve gained insight into the other party’s BATNA and walk-away position, you’re poised to gauge the Zone of Possible Agreement, abbreviated as ZOPA. The ZOPA delineates the span within which a mutually acceptable deal can be reached. It is delineated by your walk-away position, anchoring one end, and the other party’s walk-away position, anchoring the opposite end. The existence of a ZOPA hinges on the overlap between these two walk-away positions. Depending on the breadth of this overlapping region, numerous potential agreements may emerge, capable of meeting the satisfaction of both negotiating parties.