Five Stages of a Negotiation
|Stage 1: Prepare||Identify potential value
Begin to understand interests
|Stage 2: Information Exchange and Validation||Discovering and creating value
Build rapport and trust
|Stage 3: Bargain||Create and distribute value
Make and manage concessions
|Stage 4: Conclude||Capture value
Confirm interests have been met
|Stage 5: Execute||Expand value
Addressing changing interests
Stage 1: Prepare
There is no good short cut to Preparation. It is the first stage of any negotiation, though people often don’t give it the time it warrants. They often charge into the Information Exchange Stage, or even directly to Bargaining.
Preparation starts with determining if this is a potential collaborative situation so that you can select the better strategy. Next you spend time researching information, analyzing data and leverage, and identifying interests and positions. Finally, you have to consider the relationship you want to build.
Stage 2: Information Exchange
The Information Exchange Stage occurs when you begin to engage the other side, share information and explore options that address interests – what you each need, as opposed to positions – what you each ask for later in the Bargaining Stage. We will discuss the difference between interests and positions and how critical they are to successful negotiations in depth later, but here is a brief example:
- Employee’s position: she has asked to be assigned to Project Beta.
- Employee’s interest: to get promoted, she needs to succeed on a project of high visibility.
It is critical here to focus on building rapport and trust, without which neither party will feel comfortable sharing interests. One way to build the relationship is to do your “social homework” in this stage by finding out and showing interest in the other party’s business culture, personality, outside interests and values.
Stage 3: Bargain
Bargaining is where the “give-and-take” happens. If you think success means all take and no give, you won’t capture real value. You make and manage your concessions in bargaining. When you give and take that which satisfies both parties’ interests, you will build a lasting relationship and a fruitful outcome. During the Bargaining Stage, you continue to create value, and with trades, finally capture value.
There are two tools you will need from your negotiator’s toolbox in the Bargaining Stage, the Probe and Creativity.
Bargaining is your “face-time” with the other person, even when you are not face-to-face.
Like all interpersonal relations, emotions can help or hinder progress. Specific negotiator’s tools and behavioral skills matter greatly here. Finely tuned communication skills are critical at this juncture as you explore options to create value and execute trades to capture value. You will be most successful when solutions satisfy everyone’s needs.
Stage 4: Conclude
Stage 4 is the point in the process when you reach agreement. It is important to find out if the other side has the capacity to follow through with the things they said they would do. This is the time to put down in writing the common interests and produce a comprehensive summary of the agreement. Sometimes you have to consider strategies here to lock-in a commitment. Be sure to agree on next steps as well. And never forget to thank the other party for their willingness to negotiate – even when no agreement is reached.
Stage 5: Execute
Stage 5 is implementation of the agreement. This stage may also be viewed as preparation for the next negotiation opportunity. You must ensure that you follow through on promises made in order to strengthen the relationship and to build trust. You will learn more in this stage about the other side. This will lead to easier negotiations next time around. And remember that during execution you are likely to apply the total negotiation process and BNPs to unexpected events, failures in performance and the inevitable changes.