By Dr. Thomas Frank
Thomas Frank, PhD, is President of Hagen Frank, LLC, a training and development consulting firm. Since 2000, he has taught interest-based negotiation courses at Cornell University. He can be reached at: firstname.lastname@example.org.
Athletic Management, 15.5, August/September 2003, http://www.momentummedia.com/articles/am/am1505/gooddeal.htm
When you hear the word negotiation, what images come to mind? Perhaps you picture heated arguments between adversaries over money and contracts. You may also imagine a winner and a loser at the outcome.
But negotiations don’t have to be adversarial processes, and they don’t always involve money. In reality, you engage in negotiations every workday: when someone outside the department asks to use an athletic facility, when a coach has a conflict with the athletic training staff, when your administrative assistant asks to rearrange his schedule, when your sports information director wants to format a promotional piece differently than you had envisioned.
For some athletic directors, these types of interactions are the most stressful part of the job. For others, they constitute the most interesting part of the day. In either case, though, how an athletic director handles these everyday problems can determine his or her ultimate success.
In this article, I’d like to introduce you to a form of negotiation that can help both new and veteran administrators. Called “interest-based negotiation,” it is based on work by Roger Fisher and William Ury, the founders of the Program on Negotiation at the Harvard Law School and authors of Getting To Yes: Negotiating Agreement Without Giving In. Interest-based negotiation can be used in large-scale negotiations such as coaching contracts, but it can also help you negotiate your way through every meeting, one-on-one conversation, or unexpected e-mail.
HOW TO NEGOTIATE
When faced with a situation that calls for negotiation, most of us automatically do what is called positional bargaining. When we positionally bargain we enter a “zero-sum” game: One side wins (they get what they want) and one side loses (they don’t get what they want). Positional bargaining usually turns into a power struggle, with all the pressure, stress, games, and threats that power struggles entail. And, eventually, one side has to give in.
When negotiation becomes a power struggle, the parties involved operate out of an intense desire to win and an even more intense desire not to lose by giving in. Most of us have been socialized against giving in. When you give in, you lose status. Especially in the sports world, we are socialized to want to win. When these attitudes and values organize a negotiation, the parties become overly focused on holding their positions. Deviating from their position means giving up, there’s no room to move, and positions harden.
In such situations, either one side wins or both sides split the difference. When one side wins, it may seem positive for that side, but not in the long run. If you evaluate the outcome as good because you won and you didn’t lose, you are not evaluating the meaning of the outcome. Maybe you got what you wanted, but you probably did not hear the opposing side’s point of view, and they will be left feeling dissatisfied.
Splitting the difference is also not effective for the long term. If you ask a coach to cut 10 percent out of his budget for next year, and he says it’s impossible for him to cut a dollar, splitting the difference may mean he cuts his budget by five percent. But, neither you nor he will likely be happy with the solution. It may seem fair to split the difference, but both parties usually walk away feeling unsatisfied.
Interest-based negotiation, on the other hand, seeks solutions that are mutually satisfying agreements for the parties involved. It begins with the understanding that two parties have differing interests in an issue and defines success by how well an agreement meets both parties’ interests.
When the parties’ interests are satisfied, the result is a reasonable agreement that will pass a commitment test. In the article, “Turning Negotiation into a Corporate Capability,” published in the Harvard Business Review, Danny Ertel describes passing a commitment test as two parties being able to answer “yes” to the following question: “Have we generated a well-planned, realistic, and workable agreement that all sides understand and are prepared to implement?” The language here is important. With positional bargaining, the language is singular (my position, your position). With an interest-based agreement both parties are saying yes to a shared agreement.
In general, the more the parties are satisfied with the agreement, the greater their commitment to the agreement. The greater the commitment, the greater the likelihood the parties will abide by the negotiated agreement—they will actually do what they have agreed to do.
Another plus of interest-based negotiation is that it produces trusting relationships between negotiators. Because we often negotiate in the future with the same people we have negotiated with in the past, it just makes good sense to create positive relationships in the process.
Interest-based negotiation is a process, and the process is important. It is how negotiators work through issues, positions, and interests that determines the outcome of a negotiation.
Let’s look at a typical example: an employee seeks an increase in salary. Each side comes to the negotiation prepared to discuss salary, each has an idea of what amount will be satisfactory. Each side takes a position on the issue. The employee’s position is to receive an eight percent raise; the employer’s position is to offer five percent, the same amount the employee has received in past years.
If positional bargaining occurs, each will dig in, demanding acceptance for their position. Since most employees aren’t willing to quit over a raise, the employer can rely on a “take it or leave it” offer. But that is hardly a mutually satisfying outcome.
Interest-based negotiation argues that negotiators should focus on the interests in the positions each side has taken. Through a discussion of interests, it turns out that the employee desires the eight percent raise because he has a new responsibility: daycare for his youngest child. The employer reveals her interest in fiscal responsibility, expressed through budgets and compensation policies.
From there, the discussion can focus on satisfying the interests that underlie the original positions. The employee needs pay for a babysitter from 3:00-5:30 in the afternoons, and the amount needed is about three percent of salary. Once that is determined, it doesn’t take long to create a solution of a five percent raise and a more flexible work schedule that allows the employee to care for the child and the employer to meet her fiscal responsibilities. Such an agreement easily passes the commitment test. Both sides are satisfied with the outcome.
Although the actual practice of a given negotiation may be quite complex, the basic method of interest-based negotiation is straightforward. The following seven steps provide a general framework that anyone can use with virtually any negotiation.
Step 1: Recognize that a situation can be a negotiation.
Negotiators understand that not all problems can or should be negotiated. Negotiating properly takes time, and if you can quickly give a definitive yes or no to a proposition, there’s no need to turn to the negotiating process.
However, if a colleague comes to you and demands a solution to a budgetary item, your best bet is not to come up with a solution right then and there. It’s much better to say, “Okay, I agree that we need to solve this, but let’s set up a time to discuss it. Will tomorrow at 10 work for you?” This allows you time to prepare for the actual negotiation and to get in the right frame of mind.
Step 2: Describe the situation.
We can prepare for a negotiation based only on what we understand the negotiation to be about. And we can understand that only through the description we have of the problem to be negotiated. But problems can and will be described differently by the parties involved. Furthermore, how we describe things reflects our interests and values, those things that matter to us.
Because we want to negotiate on the basis of interests, descriptions are important. Through them we can identify not only our own interests, but also those of the opposing parties. A simple question of “How do you see the situation?” will most often provide such a description. The more complete the description, the better the preparation, and the better the negotiation will be.
A key concept related to description is framing. Framing refers to the cluster of mental attitudes, beliefs, values, and images that we select (consciously or not) to deal with our worlds. Everyone uses framing to emphasize elements of a situation. Negotiators need to understand their own frames and how they shape the situation being negotiated. They also need to understand how someone with whom they are negotiating frames the situation. To some degree, a negotiated agreement is like saying, “We’re all on the same page” (which is a framing metaphor).
Step 3: Analyze the description.
The third step covers the first part of preparing for a negotiation. Analysis is necessary to determine the issues and interests of all parties involved. The time needed to analyze depends on the complexity of the negotiation and what is necessary to create an adequate negotiating strategy. The kinds of information you will need include:
• The parties who are negotiating
• The history of the negotiation (such as previous agreements or contracts)
• The central problem or problems that need resolution
• Who will be affected by the negotiated agreement
• The interests of all the parties
• What kind of outcomes are possible
• The relationships among the negotiators
• The time frames involved
• What the financials are (if the negotiation involves economic issues)
There will invariably be information that you will not be able to obtain at this step. Such desired information should be noted and become part of your negotiating strategy—you need to plan how you might get important information from the other parties as you negotiate.
In addition to the above kinds of information, there are three additional items to work through before creating a negotiating strategy: BATNA, options, and objective criteria. BATNA stands for Best Alternative To a Negotiated Agreement. Sometimes referred to as “red line,” a BATNA is a baseline that needs to be met or exceeded—it is a negotiator’s “walk away point.” If a party’s BATNA’s cannot be reached, the party will seek an alternative to negotiating further.
It’s important that your BATNA is realistic and that it directly serves your interests. If it doesn’t, agreements made relative to it will not meet the commitment test. Negotiators also try to estimate what the opposing parties’ BATNAs might be. It is much easier to craft solutions if the BATNAs are known. Coming to final agreement is relatively easy if no one’s BATNA is threatened.
The use of BATNA means that there will be more than one outcome that will be satisfactory. Therefore, as part of your analysis, it is best to create a list of options of different solutions to the problem that will meet your BATNA. In creating such a list you should try to create options that will also meet the other parties’ interests and their BATNA.
However, keep in mind that creating options and discussing options with the other parties doesn’t mean that you are agreeing to them. Many negotiators use their list of options as a means to kick off a brainstorming session with the other party to create more refined options. Out of this jointly produced list of options, an agreement can be drafted.
Since you will be working with several options you should understand how to rank them: Which one is the best option for you? Why? Although any of the options will meet your BATNA, some options will be better than others.
Preparing for a negotiation also means coming up with objective criteria. Depending on the negotiation, there is a range of sources of objective criteria. A common example of objective criteria is the Blue Book that the automobile and insurance industries use to determine the objective value of used cars. Using the Blue Book values provides buyers and sellers an objective source to determine the worth of a car being sold.
Let’s say you hired a new football coach a year ago and promised to build a new weightroom as a means of getting him on board. Now, a year later, you are having more trouble than you anticipated in obtaining funds for the project. As you sit down to discuss the new facility with the coach, you should have some objective criteria as to what a new weightroom at your level of play contains.
It is important to be prepared to use criteria that the parties can agree on. As with options, more than one source of criteria will usually be available. But from a negotiation standpoint, it is the agreement to use a standard that is important, not necessarily the standard that is used.
Step 4: Plan for the negotiation.
Once you have analyzed the negotiation about to take place, you can develop your negotiating gameplan (the second part of your overall preparation). To create a good strategy, you will need to answer questions such as:
• How are you going to proceed?
• How will the room be set up? Where are you going to sit? Where will the other party sit?
• How long will the negotiation last?
• What can realistically be accomplished in the time allowed?
• Do you need an agenda? If so, what should it be?
• What is your communication strategy? What kind of language will you employ?
• What will be your first question?
• How will you determine their interests? Their BATNA?
• How will you handle “no’s,” hostility, emotionality?
• How will you deal with the history of the negotiation (if there is any)?
The list of questions that you can think of will be relative to the negotiation and the analysis you have conducted. But it’s crucial that you have a clear sense of how you want the negotiation to proceed, and a backup plan if your strategy doesn’t work as well as you had hoped.
Step 5: Negotiate.
Negotiators who prepare adequately have a much better chance of actually negotiating what they have planned. However, negotiation is an exceptionally dynamic process, one that can change at any minute. Negotiators develop an ability to monitor themselves relative to their strategy as they negotiate, and thus remain flexible enough to change if necessary, as the negotiation proceeds. Because a BATNA provides a baseline, how the negotiation unfolds doesn’t really matter—what matters is that the parties involved genuinely feel like they are working together to produce a mutually satisfying outcome that will pass the commitment test.
In general, seek to clarify statements (e.g., “If I understand you correctly, what you’ve agreed to is…”) and remain flexible. For complex and lengthy negotiations, it is best to take notes. Several general tactics are worth noting here:
• Plan to discuss early the time frame and agenda. Be realistic, even conservative. Don’t try to accomplish more than can be done in the time allowed for a negotiating session.
• Take time to jointly decide and agree upon what the problems are to be negotiated, all their components, and the order in which you will discuss them.
• Utilize all your effective listening skills.
• Work from interests to positions—that is, begin with a conversation about the reasons and interests in the problem before you state any position on any of the issues.
• Always remember, you are trying to jointly solve the problem.
Step 6: Review steps 1-5.
Improving your negotiating skills is not unlike studying game films to prepare for the next contest. In Step 6, regardless of the outcome of the negotiation, the goal is to honestly assess all the steps taken to learn what worked, what was effective, and what was counterproductive.
Step 7: Apply to future situations.
The final step happens during your next negotiation. Take the lessons learned from Step 6 and apply those to your next negotiation process. The combination of steps 6 and 7 make this a cyclical relationship among the preparation, actual negotiation, and post-negotiation review. Each negotiation benefits from the rigorous analysis of the previous one, and the goal is to prepare thoroughly and to review as thoroughly.
A SOLID SYSTEM
One of the attractions of athletics is that they are defined by rules. With a set of rules, problems are reduced, and so are conflicts. In everyday life, we often find ourselves trying to solve problems where there are no rules to govern the process. We find that we are constantly negotiating without any guidance, but rather with a commitment to a particular outcome or position. Such outcomes are often unproductive and inefficient as well as counterproductive for the parties involved. It makes sense, then, to have a systematic approach to negotiating that can handle any situation where a negotiated outcome is called for.
Interest-based negotiation provides a system that can guide you to efficient outcomes. In addition, the process of analysis and preparation that accompanies interest-based negotiation provides improved communications skills, a greater understanding of the power, influence, and importance of relationships, and a better appreciation for the role that framing plays in our everyday lives. Learning how to negotiate, and perfecting the process, is a great way to further your leadership skills.
Sidebar: To Learn More
There are many resources available to help you further your interest-based negotiation skills. Here’s a sampling:
Books & Articles:
“Turning Negotiation into a Corporate Capability,” by Danny Ertel, Harvard Business Review, May-June, 1999: 55-70.
Getting to Yes. 2nd Edition. By Roger Fisher, William Ury, and Bruce Patton. Penguin Books, 1991.
Decision Traps: The Ten Barriers to Brilliant Decision-Making and How to Overcome Them. By J. Edward Russo and Paul J.H. Schoemaker. Fireside Books, 1989.
Getting Past No. By William Ury. Bantam Books, 1993.
Program on Negotiation at Harvard Law School
Society for Human Resource Management
Conflict Resolution Information Source