NCM/U5 Topic 4 Seven pillars to Negotiational wisdom
No two negotiations are the same. The parties, the issues and the stakes involved vary, and each deal must be approached uniquely. To help you organize your thinking about a negotiation, Steven P. Cohen of the Negotiation Skills Company, author of Negotiating Skills for Managers has identified the Seven Pillars of Negotiational Wisdom. Each time you negotiate, says Cohen, consider how each of these elements affects the process and how each is prioritized.
You may find yourself negotiating with the same individuals over and over. As a result, it’s important to take a wider view of each negotiation and see how it plays into the long-term relationship. It may be worth losing the battle to win the war. “Treat each negotiation as an episode in an ongoing relationship,” suggests Cohen.
You need to understand your own interests so your decisions don’t undercut them, but you also need to understand as much as you can about the other parties’ interests. By doing so you can increase your ability to influence those parties by showing them how you’ve incorporated their interests in your proposals.
Best Alternative to a Negotiated Agreement (BATNA)
The BATNA is the balance of power between the negotiating parties, says Cohen. If you have a strong BATNA, you have greater power to influence the outcome of the negotiation. If you understand the relative BATNAs, you’ll understand whether negotiation is a good way to resolve the issues you face. You also will know what choices you can make when determining negotiation partners and what information might trigger you to walk away from an unpromising negotiation, explains Cohen.
If your negotiating partner has a limited scope and can’t see alternatives to his or her initial proposal, creativity may become the top priority in the negotiation process.
How other negotiating partners perceive your behavior and what they believe about the fairness of the process can determine whether they’re committed to the end results.
No matter how favorable an outcome may seem, a negotiation is only successful when it yields an agreement to which all parties are committed.
“Information is the fundamental asset in negotiation. Communication is how information moves from one party to others. Paying attention to other parties shows not only respect, but also can yield information crucial to your decision making,”
The Seven Pillars of Negotiation wisdom will help you to organize your thinking whilst preparing for and during negotiations.
Be conscious of the difference between positions and interests. If you can figure out why you want something, and why others want their outcome, then you are in a much stronger position.
Be creative. Ask lots of effective questions to uncover the other party’s needs and emotional wants; listen to the sometimes outlandish statements and be open to unanticipated possibilities. These often will lead you to unexpected agreement opportunities. If you respond with new ideas and do the unexpected, you can open doors to far greater things than when you behave predictably. Creativity can make everyone look good.
Be fair. If people feel a process is fair, they are more likely to make real commitments and less likely to walk away planning ways to wriggle out of the agreement.
Be prepared to commit. You shouldn’t make a commitment unless you can fulfill it. Your commitment isn’t worth much unless the parties to the negotiation are the decision makers. Moreover, commitment is not likely to result unless all parties feel the process has been fair. Remember that there may well be different definitions of the word ‘fair’. Your job as a Trusted Advisor is to find out what their definition is and make sure that you have fulfilled the requirements under their definition (within the boundaries of reasonableness).
Be an active listener. Focus on what others say, both on their words and their underlying meaning.
Be Conscious of the importance of the relationship. Most of your negotiation is with prospective clients or existing clients negotiating future business. It is therefore, important to remember to protect the rapport without compromising on the need to ask tough questions.
Be prepared. In order to negotiate effectively, efficiently and wisely, it is crucial to prepare. Your job is not to outline a perfect, total solution. Preparation means studying the interests of every possible party. It means understanding the short and the long-‐term consequences you use and the substantive results you pursue. Doing your homework can save a lot of time.