NCM/U5 Topic 6 Best Practices in Negotiations
- Analyze and cultivate your BATNA
In both integrative negotiation and adversarial bargaining, your best source of power is your ability and willingness to walk away and take another deal. Before arriving at the bargaining table, wise negotiators spend significant time identifying their best alternative to a negotiated agreement, or BATNA, and taking steps to improve it.
- Negotiate the process
Don’t assume you’re both on the same page when it comes to determining when to meet, who should be present, what your agenda will be, and so on. Instead, carefully negotiate how you will negotiate in advance. Discussing such procedural issues will clear the way for much more focused talks.
- Build Rapport
Although it’s not always feasible to engage in small talk at the start of a negotiation (particularly if you’re on a tight deadline), doing so can bring real benefits, research shows. You and your counterpart may be more collaborative and likely to reach an agreement if you spend even just a few minutes trying to get to know each other. If you’re negotiating over email, even a brief introductory phone call may make a difference. This is one of the most valuable negotiation skills to master.
- Listen Actively
Once you start discussing substance, resist the common urge to think about what you’re going to say next while your counterpart is talking. Instead, listen carefully to her arguments, then paraphrase what you believe she said to check your understanding. Acknowledge any difficult feelings, like frustration, behind the message. Not only are you likely to acquire valuable information, but the other party may mimic your exemplary listening skills.
- Ask Good Questions
You can gain more in integrative negotiation by asking lots of questions—ones that are likely to get helpful answers. Avoid asking “yes or no” questions and leading questions, such as “Don’t you think that’s a great idea?” Instead, craft neutral questions that encourage detailed responses, such as “Can you tell me about the challenges you’re facing this quarter?”
- Search for smart tradeoffs
In a distributive negotiation, parties are often stuck making concessions and demands on a single issue, such as price. In integrative negotiation, you can capitalize on the presence of multiple issues to get both sides more of what they want. Specifically, try to identify issues that your counterpart cares deeply about that you value less. Then propose making a concession on that issue in exchange for a concession from her on an issue you value highly.
- Be aware of the anchoring bias
Ample research shows that the first number mentioned in a negotiation, however arbitrary, exerts a powerful influence on the negotiation that follows. You can avoid being the next victim of the anchoring bias by making the first offer (or offers) and trying to anchor talks in your preferred direction. If the other side does anchor first, keep your aspirations and BATNA at the forefront of your mind, pausing to revisit them as needed.
- Present multiple equivalent offers simultaneously (MESOs)
Rather than making one offer at a time, consider presenting several offers at once. If your counterpart rejects all of them, ask him to tell you which one he liked best and why. Then work on your own to improve the offer, or try to brainstorm with the other party an option that pleases you both. This strategy of presenting multiple offers simultaneously decreases the odds of impasse and can promote more creative solutions.
- Try a contingent contract
Negotiators often get stuck because they disagree about how a certain scenario will play out over time. In such cases, try proposing a contingent contract—in essence, a bet about how future events will unfold. For example, if you doubt a contractor’s claims that he can finish your home renovation project in three months, propose a contingent contract that will penalize him for late completion and/or reward him for early completion. If he truly believes his claims, he should have no problem accepting such terms.
- Plan for the implementation stage
Another way to improve the long-term durability of your contract is to place milestones and deadlines in your contract to ensure that commitments are being met. You might also agree, in writing, to meet at regular intervals throughout the life of the contract to check in and, if necessary, renegotiate. In addition, adding a dispute-resolution clause that calls for the use of mediation or arbitration if a conflict arises can be a wise move.