Monday, March 30, 2009

Negotiating So Both Sides Win

It doesn’t matter whether you are negotiating a pay rise with your boss, negotiating with a seller or buyer or sorting out who has the kids and when with your ex-partner, there are rules you need to follow to get the most out of a negotiation.

The aim of win-win negotiation is to find a solution that is acceptable to both parties, and leaves both parties feeling that they've won, in some way, after the event.

Here’s how it’s done:

Make sure you know what you want and what the other side wants.
This might seem obvious, but most of the time people don’t know what they want. Often in a dispute both parties are so angry that they haven’t even asked themselves how the issue can be resolved. If they don’t know what they want, how can they begin to set about getting it?

Depending on how complex the situation is, you should take the time to make a detailed plan of exactly what you want. It’s useful to ask the following questions:
What are my objectives? What does the other party want? What information could influence the outcome? How am I going to achieve my objectives?
Incidentally, you also need to decide what concessions you can make - in other words what you are willing to give up in order to get what you want. You can usually get what you want if you are willing to pay the price for it. Don’t ever begin a negotiation without knowing exactly what you want.

If The Other Side Is More Powerful Than You - Always Have a Plan B.
This is known as a BATNA (Best Alternative to a Negotiated Agreement) It is a really important strategy to always have a backup plan. It’s a good idea to ask yourself questions that start with “how” or “what if?” - What if the other party likes this? What if they reject this? How can I sweeten the deal? How can I close the deal? Try to come up with some alternatives that will help seal the deal. Having a Plan B gets easier the more you negotiate. It becomes a way to be flexible and react to what the other side wants and think fast on your feet. The person with the most flexibility in a situation will always prevail.

Separate People from the Problem
It’s critical to address problems, not personalities and avoid the tendency to attack the other side personally; if the other person feels threatened, he defends his self-esteem and makes attacking the real issue more difficult. Both parties must acknowledge the fact that certain emotions are present, even when they don't see those feelings as reasonable. Dismissing another's feelings as unreasonable is likely to provoke an even more intense emotional response. Allow the other side to express their emotions without reacting emotionally to outbursts. Symbolic gestures such as apologies or an expression of sympathy can help to defuse strong emotions. Make sure you send signals that you know the conflict is about the issues at hand and not personal. This will help to prevent the other side from getting defensive.
Focus on interests not positions

Here’s an example:

There were two men in an office arguing about how wide a window should be opened. There was no solution until the manager asked the first man “ Why do you want it open? “
He answered “For fresh air”. She asked the second man “Why do you want it closed? “
He answered “To avoid a draught”.
Her solution was to open the window in the next room wide open. This allowed the influx of fresh air without a draught. Both party’s interests were satisfied without losing out to the other.

Use an Objective Standard if possible
How do you convince someone that your proposal is ‘fair’? Fairness is a subjective concept and people have different ideas of fairness. Just because you think something is fair doesn’t mean the other person will think it’s fair. One suggestion is to look to comparables or objective criteria, because people are more persuaded by an objective standard than by you saying that you think something is fair. Objective standards are criteria that are outside the specific negotiation; something both sides can look at and agree is fair. For example, if you’re buying or selling a house, you would want to know what similar houses have sold for recently. ‘Objective criteria’ needs to be independent of each side's will.

Invent options for mutual gain.
A good negotiator is creative. It’s important to broaden the options on the table rather than look for a single answer. One idea is to have a brainstorming session in your negotiation where all involved try to come up with creative ideas. It’s important to set two ground rules: first, no criticism is allowed of the options that are being generated;
second, no commitment to the options – they are options, not offers.

If we free ourselves from having to worry about whether an option is a good one, we’re more likely to come up with creative options.

Remember the men in the office? The only option they saw was opening or closing the window in the room they were both sitting in. In fact, there are many options: borrow a sweater, open a window in another room, move to a different spot, etc.

Search for mutual gain. In a negotiation, both sides can be worse off and both sides can gain. Remember, this is not about "I win" and "you lose".

Invent ways of making the other party's decisions easy.
Since a successful negotiation requires both parties to agree, make it easy for the other side to choose. This is where putting yourself in the other person's shoes can be very valuable. What might prevent "Jim" from agreeing? Can you do anything to change those things?

Finally,

There are the three words we want to hear even more than “I Love you”. We love to hear those magic words, “You are right”. For some people, this is even harder to say than “I love you”. When someone says, “It is the principle that counts” or “It is not the money, it’s the principle!” the negotiation is in trouble. That is because the party is making a decision that it is more important to be a martyr than settle the dispute. When someone is obsessed with the principle of a situation, they are still emotionally vested in their feelings. Unless you can get beyond those emotions, the dispute is not likely to be resolved. The most important thing to remember in negotiation is that You don’t have to be right to settle.

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