Seven elements for successful negotiations
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Sunday MBA provides ideas on running better businesses and succeeding in the modern workplace, this week from the HBR Guide to Negotiating by Jeff Weiss, a founding partner at Vantage Partners, a management consulting firm.
How you define success in a negotiation will influence how you prepare and negotiate. But beware. There are a lot of common measures that are limiting and even dangerous. Some professionals think they've negotiated well when they've extracted more concessions than they gave up or pushed their counterparts past their bottom lines. Others believe that success means they avoided confrontation. Still others are happy if they simply reached any agreement at all.
These measures focus on the wrong things, and they can undermine your effectiveness. Instead, use a more robust definition of success, one that includes seven elements. A successful negotiation:
Satisﬁes everyone’s core interests
By interests, we do not mean the preconceived demands that you or the other party might have, but rather the underlying needs, aims, fears, and concerns that shape what you want.
For example, when negotiating a job offer, you might say that you want no less than $75,000 and a 15 percent bonus. But why do you want that? Do you want that money to pay off short-term debt, cover increased living expenses, create long-term security, or something else? These are your motivating interests. They're important to identify because you might be able to satisfy them in other ways, some of which might be even more valuable to you than the $75,000 plus 15 percent.
Aim for an outcome that satisfies your and your counterpart's full range of interests; this will go a long way toward ensuring that your agreement sticks.
Is the best of many options
Your final agreement should be the best of those many options. A good negotiator leaves the discussion thinking that she and her counterpart created real value; if the outcome feels like it was the only solution possible, it's probably not a good one.
Meets legitimate, fair standards
In research we conducted with close to 1,000 negotiators all over the world, we found that what the vast majority of people wanted most from a negotiation was to leave feeling that they were fairly treated and they could defend the outcome to stakeholders and critics. Most reported this as more important than thinking they got a "great deal."
Is better than your alternatives
A "bottom line" might be your desired threshold, but it's often arbitrary. Instead, consider alternatives. What would you do if you were unable to reach an agreement with your counterpart? Would you find another vendor? Could your company make the part? Or would you stop manufacturing the product altogether?
Once you've identified alternatives, consider which is best. Any outcome you agree to needs to be better than what you would do if you walked away.
Comprises clear, realistic commitments
Promises to provide a service, pay a fee, deliver a product, or provide resources need to be operational, detailed, and realistic. For an agreement to be successful, it must be clear that each side can hold up its end of the bargain. It might feel good to think you "got them," but when the agreement unravels a month later because your supplier can't produce the parts you desperately need, you will probably wish you had never agreed to those terms in the first place.
Is the result of effective communication
The language you use and the way that you build understanding, solve problems, and determine the process with your counterpart make your negotiations more efficient, yield clear agreements that each party understands, and help you build better relationships. Open lines of communication make it easier to negotiate with this party the next time as well.
Helps build the kind of relationship you want
Another critical factor in the success of a negotiation is how you manage your relationship with your counterpart. You want to build a strong working relationship built on mutual respect, well-established trust, and a side-by-side problem-solving approach.
Using all seven elements
Some elements have more to do with the process, or the "how" of negotiation. Some are more relevant to the substance, or the "what." Together, the seven elements provide a framework to help you measure success.
Reprinted with permission of Harvard Business Review.