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Designing and Improving Negotiation Strategies

January 19, 2017

For our inaugural piece, we’re focusing on the single most important tool in negotiation—one that almost all negotiators agree is crucial, but that relatively few use effectively. In fact, failing to create and stick to a strong strategy is one of the most common problems negotiators have. It’s also one of the most common problems we’re asked to fix for our clients. Let’s explore some of the solutions we recommend for improving negotiation strategies.

 

 

The first is simply going beyond the obvious. Many negotiation strategies are based on the familiar. Negotiators will fall back on simple, obvious approaches like leveraging a strong BATNA or just trading concessions back and forth until each side can live with the deal. But the best negotiations are based in creative, non-obvious solutions that challenge the expectations of one or all parties. Creating those solutions starts with the negotiation strategy: does it require you to explore possible new solutions internally, within your own team? Does it give the other side of the table a chance to suggest their own ideas, and a reason to participate in a more creative style of negotiation? There many techniques for supporting this kind of negotiation, but the most important is to design a negotiation strategy that explicitly calls for both sides to work towards more creative deals.

 

A similar approach is to question the assumptions underlying the strategy. Unchallenged assumptions are deadly to negotiation. For example, it’s very common for negotiators to simply assume that they’re working on a zero-sum deal. In other words, that the negotiation can be won or lost and that the only way to win is to make the other side lose. Imagine a simple price negotiation, for example, where it’s natural to assume that the seller just wants a higher price and the buyer only cares about a lower one. If those things are true, that’s going to be a relatively tough, inflexible negotiation. But it might just be down to the assumptions of the parties: the seller assumes the buyer is focused on price, perhaps, when in fact the purchaser would pay more for greater quality. That’s a very simple example. In practice, even in hindsight it can be hard to determine when assumptions have limited the negotiation. The easiest solution to this is to identify the assumptions underlying the negotiation in advance, and create a plan for challenging them. Every negotiator should spend at least a little time asking, “What assumptions have I made this time?” And every negotiator should know what questions they’ll ask their counterparts, and what research needs to be done, to test those assumptions.

 

Third, many negotiators design strong strategies but fail to stick to them. Many negotiators spend significant time preparing for a meeting but seem to forget about that preparation once the conversation starts. People are inherently reactive, and often prefer to respond to what their counterpart does rather than following a more deliberate strategy. And that’s not always a mistake—after all, no strategy is perfect and it’s rare that there’s no room for improvement or improvisation on the scene. But because improvisation is tempting and easy, it’s often hard to tell in the moment whether it’s the right approach. Is it actually time to abandon the strategy, or is that just the easiest thing to do? Negotiators have to learn to be self-aware and realize when they’re failing to apply their prepared strategies. When they know that they’re extemporizing, then they can ask whether there’s really a good reason for doing so. Abandoning the negotiation strategy should be a conscious decision based on an analysis of the costs and benefits, not a casual or reflexive move.

 

The best negotiators are very aware of the benefits of that kind of self-awareness and self-assessment. One last piece of advice for creating and using effective negotiation strategies is to test them after the fact. Did the strategy work? Did you accurately predict how the other side of the table would behave? What information would have helped you make a better strategy, and how could you have gotten it? Most importantly, what will you do differently next time? Negotiation is a skill that can be improved, but not one that gets better automatically. Looking back over past negotiations and understanding the reasons behind successes and failures is the best way to improve, to replicate those successes, and to prevent future failures.

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