Negotiation 103: Step by Step
With Colleen Graffy, former US Deputy Assistant of State for Public Diplomacy for Europe and Eurasia, Law Professor at Pepperdine University Caruso School of Law.
Colleen has taken a 9 month course and condensed it into three 30 minute sessions for our members to study “The Art of Negotiation.” Colleen created the first ever “media hub” for the U.S. government with radio and television broadcasting facilities based in Brussels, established the “Ben Franklin Transatlantic Fellowship,” and was the first U.S government official to use Twitter. In the third and final part of this series, Colleen will breakdown the process of negotiating from beginning, middle -through an impasse- and to the end.
The Beginning
Colleen introduces use to two key terms that will be used throughout this talk: BATNA (best alternative to a negotiated agreement) and WATNA (worst alternative to a negotiated agreement). These are essential, Colleen explains, because preparation is everything.
“A goal without a plan is just a wish.”
Antoine de Saint-Exupéry
Internal preparation of your BATNA, WATNAs and RP (reservation point) is necessary for you to determine what are your substitutes for and opportunity costs for reaching an agreement.
External preparation includes considering an opponent’s alternatives and BATNA. This allows the negotiator to estimate the opponents RP which will help predict the bargaining zone.
“Goals are what gives us direction; but our expectations are what give weight and conviction to our statements when the bargaining”
Colleen adds however to be careful with this reservation point. If you let yourself think about your lower price in a bargain, you will fall back on it rather than achieve your goal.
Initial interactions are important. “How we feel about those with whom we negotiate with is a critical element on whether an agreement will be reached.” You behave differently if it is a friend or if this is a new relationship. Statistics also show that exchanging a handshake at the start, you will more likely come to an agreeable resolution as, Colleen explains, there is a trust factor.
“The best negotiators are the ones that ask the most questions.”
This is because they find out more information and understand what the other side values. Colleen recommends active listening and observing. She also suggests that when considering opening offers, if you do not want to open, then you need more information.
The Middle - Concessions
This segment is the comprises you make after the opening offer to move the negotiation forward. Colleen recognises that “conceding without a plan can be costly.” Prioritise and rank concession beforehand. There is also a value in the small things and recognising what may be low value to you may be high value to them. Colleen includes examples like including a frame, recording the history of the asset or having transport and delivery included. The important thing to remember is:
“You don’t give a concession without getting a concession.”
If there is a negative impasse, this is often because the focus is on money with the exclusion of other interests. Misunderstanding the other sides needs must be addressed to reach an agreement, adding “failing to concede low-priority interests to satisfy high-priority interests” can lead to an impasse.
To avoid impasse, Colleen suggests to realistically reconsider and adjust your BATNAs and WATNAs. There can be another obstacle called “decision fatigue” or “perfection solution fallacy” which is when we are disappointed and holding out for a solution that doesn’t exist.
The End
“The devil is in the detail.”
A competitor when everyone is exhausted might start to nibble - for example asking to throw in the delivery. Whereas before you might have included that in a concession, now you are exhausted and accept it. Another factor can be if your competitor doesn’t admit they don’t have decision authority so this leaves time for further re-negotiations.
Why Women Aren’t Good Negotiators
Colleen admits “when women negotiate for themselves, women don’t do as well” because we tend to empathise with the opposition. There is also a reluctance to appear greedy or grasping. To avoid this, she suggests to pretend you are negotiation for someone else.
Colleen ends the talk with a few example scenarios
With an unexpected negotiation, signpost why you want to start a discussion before having it. If bad news, shape the environment you tell them in and articulate why your decision and the process is fair.
Group negotiations - collect information in advance so when presenting, there are no names attached which could trigger bias towards people they don’t like
Negotiating salary in an interview - while they shouldn’t ask, avoid a lower offer by improving your BATNA.
How to work with your “need to please” instinct - prepare and manage yourself by pretending to negotiate for someone else as it will put you in a different frame of mind. Focus on the process and know your goal.