Add a review Your Rating: Your Comment:. Dow by David R. Hot 3-D Negotiation by David A. Lax by David A. Coe by David B. Free World by David Bezmozgis. Timing is vital: Decide which stages of the negotiation process should be public, which private, and how much information from one stage you should convey at other stages.
What stands between you and the yes you want? Each dimension is crucial, but many negotiators and much of the negotiation literature fixate on only the first two. For instance, most negotiation books focus on how executives can master tactics—interactions at the bargaining table. So the books offer useful tips on reading body language, adapting your style to the bargaining situation, listening actively, framing your case persuasively, deciding on offers and counteroffers, managing deadlines, countering dirty tricks, avoiding cross-cultural gaffes, and so on.
Does some sort of trade between sides make sense and, if so, on what terms? Should it be a staged agreement, perhaps with contingencies and risk-sharing provisions? A deal with a more creative concept and structure? One that meets ego needs as well as economic ones? Beyond the interpersonal and deal design challenges executives face in 1-D and 2-D negotiations lie the 3-D obstacles—flaws in the negotiating setup itself. Common problems in this often-neglected third dimension include negotiating with the wrong parties or about the wrong set of issues, involving parties in the wrong sequence or at the wrong time, as well as incompatible or unattractive no-deal options.
Acting entrepreneurially, away from the table, they ensure that the right parties are approached in the right order to deal with the right issues, by the right means, at the right time, under the right set of expectations, and facing the right no-deal options. Former U. Many people mistake tactics for the underlying substance and the relentless efforts away from the table that are needed to set up the most promising possible situation once you face your counterpart.
When you know what you need and you have put a broader strategy in place, then negotiating tactics will flow. Even managers who possess superior interpersonal skills in negotiations can fail when the barriers to agreement fall in the 3-D realm.
Chile had what appeared to be a very attractive walkaway option—or in negotiation lingo, a BATNA best alternative to negotiated agreement. By unilateral action, the Chilean government could radically change the financial terms of the deal or even expropriate the mine.
Imagine that Kennecott had adopted a 1-D strategy focusing primarily on interpersonal actions at the bargaining table. It would try to be culturally sensitive, and it might choose elegant restaurants in which to meet.
Fortunately for Kennecott, its negotiators adopted a 3-D strategy and set up the impending talks most favorably. The team took six steps and changed the playing field altogether. Second, to sweeten that offer, the company proposed using the proceeds from the sale of equity, along with money from an Export-Import Bank loan, to finance a large expansion of the mine. Third, it induced the Chilean government to guarantee this loan and make the guarantee subject to New York state law.
Fourth, Kennecott insured as much as possible of its assets under a U. And sixth, the collection rights to these contracts were sold to a consortium of European, U. These actions fundamentally changed the negotiations. Instead of facing the original negotiation with Kennecott alone, Chile now effectively faced a multiparty negotiation with players who would have future dealings with that country—not only in the mining sector but also in the financial, industrial, legal, and public sectors.
If an agreement were not reached and Chile acted to expropriate the operation, Kennecott would have a host of parties on its side. It is unlikely that 1-D tactical or interpersonal brilliance at the table—whether in the form of steely gazes, culturally sensitive remarks, or careful and considered listening to all parties—could have saved Kennecott from its fundamentally adverse bargaining position.
Successful 3-D negotiators induce target players to say yes by improving the proposed deal, enhancing their own BATNAs, and worsening those of the other parties. It drives you nuts, trying to juggle them all. But number one, it will change the perception on the other side of the table.
And number two, it will change your self-perception. It will come across with a whole other level of conviction. While negotiators should generally try to improve their BATNAs, they should also be aware that some of the moves they make might inadvertently worsen their walkaway options. For instance, several years ago, we worked with a U. The company had already researched possible cultural barriers and ranked its three potential partners according to the competencies it found most desirable in those companies.
After approaching the negotiations in a culturally sensitive spirit, and in what had seemed a very logical sequence, the U. The team abandoned those talks and was now deep into the process with the second most desirable candidate—and again, things were going badly.
Imagine subsequent negotiations with the third, barely acceptable, partner if the second set of talks had also foundered—in an industry where all would quickly know the results of earlier negotiations. As each set of negotiations failed, the U. Fortunately, the U.
This helped the U. The U. In short, doing so would have created the equivalent of a simultaneous four-party negotiation structured as one U. This more promising 3-D setup would have greatly enhanced whatever 1-D cultural insight and tactical ingenuity the U.
Swiss banking executives saw no reason to be forthcoming with Bronfman; they believed they were on strong legal ground because the restitution issue had been settled years ago. But after eight months of lobbying by Bronfman, the World Jewish Congress, and others, the negotiations were dramatically expanded—to the detriment of the Swiss.
The bankers faced a de facto coalition of interests that credibly threatened the lucrative Swiss share of the public finance business in states such as California and New York. They faced the divestiture by huge U.
It was, however, an almost unimaginable outcome at the beginning of the small, initially private game in which the Swiss seemed to hold all the cards.
Another way for negotiators to claim value is to shift the issues under discussion and the interests at stake. Lost your password? Create a new password of your choice. All rights reserved. Leave a Reply Cancel reply Your email address will not be published.
Stay Connected to PON. Preparing for Negotiation. Resources Podcasts Videos Webcasts. What process will result in agreement? Research all the parties and the situation, first by using publicly available resources, then by engaging sources within the organizations. Ask questions about other parties interests and listen actively to the answers. Dont presume that the value to be divided in the negotiation is fixed. Everyone at the table is there to create more value.
You may not have to make a deal, of course, and sometimes walking away is better. Before entering a negotiation, know your zone of possible agreement ZOPA and its outer limits.
Actively consider alternatives to the deals you are pursuing. You will give yourself greater latitude and you may put more pressure on the other party. Recognize each partys no-deal option the consequences they would face for walking away and its value relative to the deal you want. In rare instances, you may purposely want to elect a no-deal option more drastic than the other partys, as military commanders do when they burn the fleets behind their men, so that they have to win.
Sequence and basic process choices complete the deal-setup process. Sequence refers to the best order of doing things. To begin your prenegotiation sequence, scan the overall context of the negotiation, and map the parties involved and their relationships. Then look at the desired outcome and work backward. Examine existing relationships and their history to determine whos most critical to the deal.
Work from those essentials to continue your sequence, then identify the party who will be hardest to persuade. Ask yourself what youll have to do to produce an agreement. Think about each party you need as an ally.
What challenges block such alliances? Keep working backward until you establish a chain of supportive parties that lead you to a deal. The next step is to develop your process, a precise plan for dealing with each specific challenge you anticipate, right up to achieving the result that you want.
Planning and preparing a fair deal will help you move smoothly through the negotiation. One-dimensional bargainers believe that negotiation is mainly about what happens at the table. To them, preparation and execution are mainly about process and tactics. Perhaps the simplest, and the most often neglected, technique to set up an effective negotiation is to simply ask the other side a series of interest-related questions and then listen actively to the responses.
In a nutshell, here is what we mean by setup: Negotiation involves moves away from the table to set up the most promising situation once youre at the table. If you dont like the way the table is set, reset it by attacking the scope and sequence of the negotiations. More accurately, win-win deals create so much mutual value that the parties can hardly believe their good fortune. Try moving northeast. If one side wants to go east and the other north, both may win by going northeast.
An example of this might be a deal between a computer company that has surplus inventory, lacks cash and needs media exposure, and a radio station that also lacks cash and needs new computers. In a barter transaction, the radio station could give the company advertising time in exchange for new computers.
This shows how to dovetail differences. Also try to expand the entire pie being divided, not out of the goodness of your heart but to create more value to be split. As you align the gaps between parties through negotiation, youll discover various categories of differences. In negotiating the sale of a company, for example, the parties may disagree about future business trends and their likely impact on the companys value.
Contingency agreements offer one approach to reaching a resolution. Such an agreement may require the buyer of a company, for example, to make additional payments to the seller based on the companys future performance. Differences in risk tolerance frequently are important in bringing deals to fruition.
Rather than merely tolerating risk, some parties actually can influence the amount of risk in a deal. This power can come from an official position, such as having a particular license, or simply from being more knowledgeable or persuasive in a given field.
Under some circumstances, you have the option of calling in a third-party mediator. Whenever you design a deal, prepare to do much more than just getting the contract signed. If you want a deal to endure over time, plan for predictable change.
If one party eventually may want to exit an agreement, or acquire the other party, perhaps the deals design should accommodate such possibilities. What happens when the interests of the parties diverge over time? Sometimes you can plan for change by designing multiparty deals, so youre not vulnerable to one partys shift in attitude. Or, you could design a deal that covers multiple issues so the entire agreement doesnt rest on just one factor. In business buyouts, pursue flexible terms that take future uncertainties into account.
Such deals are more likely to endure if they are written in anticipation of business downturns. Bonds for performance and other mechanisms that link payouts to outside parties can help. In general, look at the structure of the situation and ask: What will produce change or insecurity? Plan for those elements after you have identified them.
Another important way to ensure that deals endure is to negotiate the spirit of the deal. Think of all deals as designed within the context of the larger social contract among the parties.
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