Now What…..

1. Now What….. • I want the last remaining orange and so do you

2. Focus on interests, not positions: • How do interests differ from positions? • Behind opposed positions lie shared and/or compatible interests • Each side likely has multiple interests that may be valued differently by each party • Find these compatible interests and then make trade-offs • Complete satisfaction for both parties

3. Mythical Fixed-Pie: Piece 1 • Assume there can only be one winner and one loser (distributive bargaining approach) • Fail to find mutually agreeable trade-offs • However, only a small percentage of organizational negotiations are purely distributive, involving just one resource or just one issue • Consider: • Price, delivery date, financing, service, relationships

4. Mythical Fixed-Pie: Piece 2 • The interests of the other party conflict with ours • “What’s good for them must be bad for us” • Our theories and assumptions about negotiation and conflict strongly impact our approaches and behaviors

5. SALT (U.S. & Russia) • “I have had a philosophy for some time in regard to SALT, and it goes like this: the Russians will not accept a SALT treaty that is not in their best interest, and it seems to me that if it is in their best interest, it can’t be in our best interest” • Floyd Spence, U.S. Congress

6. Who Proposed This? • The samearms reduction proposal was reviewed by two groups of people in the U.S.A. • Group 1: The arms reduction proposal was offered by Russian President Gorbachev • How favorable was it to Russia, the U.S.? • 56% said it strongly favored Russia • 16% said it favored the U.S. • 28% said it favored both sides equally

7. Who Proposed This? • Group 2: The arms reduction proposal was offered by U.S. President Reagan • 27% said it favored the USSR. • 27% said it favored the US • 46% said it favored both sides equally

8. Finding Compatible Interests • Pairs were presented with a negotiation involving multiple issues. On two of these issues, the opposing sides had completely compatible interests (similar to an interest in the orange peel versus an interest in the fruit) • What percentage of the time did the negotiators make the trade-offs? • 50% • Instead of realizing the gains, the other 50% typically compromised on each one

9. Finding Compatible Interests • Two students in a library, one wants the window open, the other wants it closed. A loud argument breaks out. • How might this be resolved? • Fixed-pie assumptions • Anger closes our minds to alternative solutions • Not wanting to “give in” • There may be just ONE way to satisfy a position, but there are MULTIPLE ways to satisfy interests. • Inventing options for mutual gain

10. Dots • Attempt to draw four (and only four) straight lines that connect all nine dots without lifting your pen from the paper

11. Theories and mindsets • The assumptions we place on a problem, frame the problem and to a large part determine our behaviors and approach to solving the problem

12. Negotiation & Conflict-handling Styles High Competition Collaboration Compromising Desire to achieve OWN goals Avoidance Accommodation Low Low High Willingness to help the other party to achieve its goals

13. Common Negotiation Styles • Competing (distributive mind-set) • Your gain is my loss • Compromising (the middle ground) • “Let’s split the difference” • Seems like a good strategy: Isn’t it better than no deal at all? • However, the middle ground results in incomplete satisfaction for both parties • “Leaving money on the table”

14. Negotiation Mindsets Distributive Integrative Characteristics Bargaining Bargaining Available resources: Primary MINDSET: Primary interests: View of relationships: Fixed amount of resources to be divided I win, you lose Opposed to each other Short term Variable amount of resources to be divided I win, you win Convergent with each other Long term

15. The Negotiation Process and Preparation • BATNA • Interests • Sitting down at the negotiation table • Convey your interests effectively • Emotional Strategy • Where do you start? • Defusing the “Company Policy” argument

16. Preparation for Negotiation • BATNA • Best alternative to a negotiated agreement • Develop alternatives so you know at what point to stop negotiating • Prevents you from entering an agreement you may regret • The lowest acceptable value to an individual for a negotiated agreement • If we cannot receive an offer of X-amount for the house, then what will you do? • Rent it out?

17. Focus on interests, not positions • Do you know your interests? • Identify and value your interests • Ranking process is one way to start • Consult with team to help valuation process

18. Sitting down at the table • Perceive yourself working side by side with the other party to resolve the issue • Separate the people from the problem • Resist the temptation to “attack” people • Where do you sit? • Sit on the same side of the table • Together we can attack this problem

19. Presentation Approaches • Option 1: “I want that orange because I am interested in baking an orange cake and I need the peel” • Option 2: “I am interested in baking an orange cake and I need the peel, that’s why I want that orange” • How are these options the same? • Different? • Is one approach better than another? Why? Why not?

20. Find out the other party’s interests and preferences • Ask questions • Listen to the response!

21. Concessions • Find an issue of lower value to you and offer a concession on that issue • Other party will typically reciprocate • Contingent concessions • I can give here if you can give on that issue

22. Make multiple offers simultaneously • Each is different, yet results in the same level of profitability for you

23. Where do we start? A. Start with the easy issues first! B. Start with the most difficult ones first! C. Either A or B: It depends D. Start with all of the issues at once

24. Emotional Strategy • Benefits of a good mood • More creative, more ideas • Found most trade-offs for joint gain • Highest level of value • Detriments of anger • Found fewest trade-offs • Least value

25. Expressing positive emotion • “Put on a happy face” • Your smile is often reciprocated by the other side in terms of: • Positive feelings and behaviors • Finding trade-offs • Offering concessions

26. Policy • “It’s company policy – there is nothing I can do” • Two volunteers to read an example?

27. Insist on objective criteria • Search for a standard such as market value, expert opinion, law • This way, neither party is “giving in” to the other and a fair agreement is possible • We are asking for $200,000 in fees • How did you arrive at that figure?

28. Conclusions • Most negotiations don’t fully maximize value • Fixed-pie assumptions are prevalent • Assume it is all or nothing • Assume our interests conflict with the other side • Too quick to compromise

29. Reaching agreement without giving in • To maximize value for you and the other party adopt an integrative mindset • Interests, not positions • Develop your BATNA • Adopt a problem-solving approach

30. Short & Long Term Benefits • A collaborative approach may seem counter-intuitive, but it is often more effective • Consider joint gains and positive word of mouth • Better over the long run