A Bare Bones Guide

This short guide to negotiations comprises answers given by Gregory Kersten and Sunil Noronha from InterNeg Group, to questions posed by Sarah Hamid from Bridges Initiatives Inc.

How would you define a "negotiation"?

Negotiations are the processes through which two or more parties try to reduce or remove a conflict between them. A successful negotiation, then, is one that allows these parties to reach a compromise. Since a negotiation implies a lack of brute force, the parties must use concessions, communication, and persuasion to reach this compromise.

Why do people negotiate?

You negotiate because (and only when) your personal goals depend on the cooperation of other people. Thus, you negotiate because it gives you an opportunity to increase your present situation. A trade-union negotiates to improve the working conditions of employees, a country negotiates with another to receive more favourable trade discounts, and a buyer negotiates with a seller to get a cheaper price for the product.

If one side gets what it wanted, then does that not mean that the other side didn't get anything?

The negotiation process is an interdependent performance, since achieving one's own goals is dependent on how successful the other side was in reaching theirs. The goals on a negotiation table, though, are not mutually exclusive of one another. It is usually possible, hence, to achieve your goals without taking away an "arm and a leg" from the other side. Bob, for example, may want more benefits from his employer, Susan. Although Susan may not be able to afford a cash wage-hike, Bob could convince her to increase his coverage under the firm's health benefit. Therefore, through effective negotiation, Bob gets what he needs, and his employer does not lose much.

Isn't it true that only business people negotiate?

Although it is true that businesses and business people negotiate on more important deals, every one negotiates on one issue or another in their daily lives. For example, you may negotiate with a parent to let you come home late after a party, with a professor to give you a higher grade, and with a friend to trade baseball cards, all in one day.

Is there an agenda that I should follow when I am negotiating?

Most negotiations do not follow a set plan of actions or agenda ( although it is a good idea to have one in formal negotiations). The parties, instead, interact, exchange compromise proposals and argument depending on the situation - i.e. actions are more or less spontaneous. For example, at one point during a Union-Management negotiation, union members may realize that they could get more vacation pay benefits from management, and will therefore set aside previous plans and target on that issue.

What are the general steps found in a successful negotiations?

There are three common characteristics to any negotiation:

1. Preparation.
This is perhaps the most important step. However, often people engage in negotiation with little or no preparation. They may know what they want to achieve, but have given no thought about concessions they will have to make or what the other party may want. Typically these people do not achieve what they wanted from the negotiation.

Preparation involves:

• Introspection Decide what issues are really important to you, how much you are willing to give up if you are really pressed to, what is the expected cost (not necessarily monetary) of the negotiation, etc.;
• Extrospection Put yourself into your opponent's shoes to figure out what issues will be important to them, how they might react to your offers, and what are their options if negotiations break down. Moreover, since negotiations are not conducted in a vacuum, the cultural background of your opposition has a strong effect on the way they negotiate. For example, an engineer born and brought up in Rajasthan, India will have a markedly different negotiation style than a farmer from Ontario, Canada;
• Considering your alternatives. The other side rarely agrees to the first option you put on the table, so be ready to have a whole set of alternatives that you can put forth. Also, be prepared to justify your position in a way that will be understandable to your opponents.
  Being prepared may not only help you to achieve a better compromise but convey a message that you treat your opponent seriously; a feeling that is often reciprocated.

2. Conduct of negotiation.
This is the exchange of offers and counter-offers possibly with arguments. This step may take place formally at a bargaining table, informally over a cup of coffee, over the telephone, or by casual e-mail messages. During this process you can verify your assumptions about the opponents, their needs and goals. This step ends when both sides reach a satisfactory compromise.
Sometimes people decide, beforehand, the method on which to conduct the negotiations. This is referred to as negotiation protocols (e.g., one party presents a complete offer, both parties present offers simultaneously, only one issue is discussed at a time, etc.). The choice of a protocol may be a negotiation in itself. The key is that the protocol should be acceptable to both parties and none should be put in a disadvantage.

3. Implementation
During the implementation step both sides keep the promises they made to reach a compromise. However, the negotiators may realize that both parties can jointly gain and do better if they cooperate whole-heartedly, so there is sometimes a fourth step:

4. Re-negotiation
Both parties exchange new offers until they reach a better compromise. In fact, in some cultures (e.g., the Japanese), reaching a compromise is less important than developing a good long-term relationship. As a consequence, they ( Japanese negotiators ) expect to frequently revise the compromise, which is less common in Western countries where it is more important to reach and honor a formal agreement.

Are there any tactics, strategies, reminders about what I should do during the negotiation process?

Negotiation is a process that requires your full effort. You can hardly be successful if you don't seriously consider your goals, the ways and means to reach them, and your alternatives, including what you expect to do if no agreement is reached. The time and effort you invest, however, should be in relation to the expected outcomes. Do not spend days preparing to negotiate over an issue that is worth pennies - in this case it would be wiser just to spend the money.

Understand yourself but also make best efforts to understand your opponents. Sun Tzu said 2,400 years ago: "If you know yourself you win 50 battles out of a hundred. If you know your enemy you win 50. But if you know yourself and your enemy you win hundred battles out of a hundred."

Do not, however, treat your opponent as an enemy! Remember that your opponents have memory and you may work with them in future. Even if not, others see how you negotiate and may be reluctant to cooperate with you in future.

Concentrate on the issues and not personalities. Even if you know what you opponents want (or especially then) do not tell them what they want; rather use this knowledge as your "trump card" to get what you want from the negotiation.

Be prepared to make concessions and require that others make them too. Have a plan of making concessions at the outset but do not be afraid to update it when the situation changes. Remember, negotiations are a dynamic process and nothing need be written in stone. So if you feel that by introducing a particular issue out of place will throw your opponent out of balance and win you some points, go ahead and do it!

Some tips:

• Try to find out your opponent's true needs before the negotiation. They won't tell you after you start bargaining.
• Poor concessions are often made only when the deadline looms. So find out your opponent's deadline, and conceal yours.
• Persistence pays. Stick at it beyond the point of boredom.
• Power is based on perception. If your opponent thinks you are more powerful, you are. So act as though you are.
• In spite of the above, be ready to ask for help. Your opponent will usually respond favorably, and it will make the atmosphere more friendly.
• Be creative about introducing new issues into the negotiation: find new things that will benefit both sides. It can turn a competitive situation into a "win-win" situation. That is, think about broadening the pie, it is very rare that the pie which is to be divided cannot be made bigger so that all the parties get a good piece of it.
• Negotiations are never cost-free; be prepared to invest your time and effort.

What should I NOT do ? Are there any common mistakes/pitfalls/traps that I should look out for in my own approach and behavior?

• Never make threats, unless you are truly prepared to back them up.
• Never negotiate or make your opponent take a position publicly; they will resist moving from it.
• Don't get trapped into making concessions because you have already invested a lot of time and effort in a negotiation. Always consider your original goals and be prepared to back out and break of negotiations.
• Beware of your need to impress others; instead, focus on the goals you initially identified (during the preparation step).
• Do not assume that your opponent thinks exactly like you, and at the same time do not think they are your complete opposite. The truth lies somewhere in the middle.
• Do not reply in a haste. Patience pays off.
• If a negotiation is complex, do not rely on your memory. Make notes.
• Try to use objective criteria to evaluate offers. Consider communicating these criteria to your opponents; this may help them to understand your perspective better.
• Any advice or wisdom to offer about other factors that can affect negotiations?

Lots of conventional wisdom applies:

• it's wiser to keep a cool head (although it can pay to act highly emotional); if one can't help getting emotional it is useful to consult a neutral third party;
• listen and require to be listened to;
• be extra careful when dealing with somebody from another culture because unintentional misunderstandings become very common;
• if you are under time pressure you typically give away larger concessions, so watch your deadlines carefully (and conversely use them to pressure your opponent).

Very readable books:

Roger Fisher and William Yry, Getting to Yes. Negotiating Agreement Without Giving In, Penguin New York, 1984.
Roy J. Lewicki and Joseph A. Litterer, Negotiation: Readings, Exercises and Cases, Irwin, Homewood, Illinois, 1985.
William Ury, Getting Past No, Bantam Books, New York, 1993.