This is common sense, but often common sense is tossed aside when negative emotions begin to surface. To assist you with this topic you will see a link to an article that will elaborate on this topic from the Program on Negotiation at the Harvard Law School. That article emphasizes additional points and provides additional commentary on this topic as well.
What is a great agreement? Is that one when you win as much as you can? It can be argued that instead, a great agreement is when both parties mutually create a much better agreement than either would have crafted by themselves.
Think about having a larger pie may be the better outcome for you and the other party than simply having a larger piece or even the entire smaller pie.
This concept has been proven time and time again to be the best approach to a truly great agreement.
For those that believe winning all and crushing the other party is the only way to go, this article is not for you. In business as in life, finding workable solutions tends to work best. There will always be bullies and those that don’t play fair and instead impose hard negotiation practices. To learn how to address these types of bullies see chapter 7, The Art of Negotiation, in Peaceful Resolutions. The principled negotiator can often beat the hard negotiator at his own game by applying tactics that can overcome the bullying techniques of the hard negotiator.
For a truly great agreement, when both parties are oriented towards having a better outcome by working together, each needs to come with an attitude to create an even better agreement than their initial estimates may indicate. If the other party does not what to work with you, what should you do?
Before ever initiating the negotiations take the time as much as possible to develop connecting relationships and truly listen to the other party.
If you cannot do this ahead of time, do your best to do this at the start of the negotiation.
It is true that sometimes the only issue is price, However, in most situations there are a host of other issues including timing, service, financing, incentives, quality, short term interests, long term interests, other party’s perceptions, image, and many other elements. Look to the complexities as additional opportunities.
The article recommends three initiatives to consider. These are:
1. Share information
Understanding key concerns is the cornerstone to a great agreement. Know how to share information. Most negotiators tend to think knowledge is power. In reality there is some truth to that, but
identifying interests goes a long way towards addressing issues.
Share what you can, but be smart about it. Know when it is not a good idea to share certain information as indicated in this article, but otherwise consider being as transparent as possible to reach a mutually acceptable agreement.
2. Ask questions
The only way to really understand interests is to ask questions. Listen closely and dig deeper. Try to determine the underlying interests and be there to help the other party with their concerns as much as possible.
Build trust. Be creative.
Explore various alternatives that could work for both parties.
3. Make multiple simultaneous offers.
Explore solutions that consider various variables. For example: quicker supply, with greater service but at higher cost; compared with timely supply, greater service with lessor cost; compared with timely supply, normal service, and least cost. Simply, modifying three variables with two alternatives provided these options.
Consider what other variables may be in play and how they could impact decision making.
Even if all three alternatives were rejected it may be possible through discussion to develop a hybrid that may be superior from simply having made these suggestions.
The key to developing a great agreement is collaboration. Collaboration is simply the action of working together to produce or create something. The key is working together. If you make that a hall mark of how you approach negotiations rather than to get as much as possible, you may be surprised how well this works in the long run. For those that don’t want to play fair, you will want to learn this sooner than later and walk away. For those that do, you can develop relationships that can last a life time.
A real-world example:
From a December mediation between two parties that I conducted as a mediator I want to share some insights with you. Party A was the landlord. Party B was the tenant. Party A was owed back rent for November and for the current month of December. Party A came with their attorney and wanted January’s rent to be paid on time, and the back rent to be paid by the end of January with the tenant moving out by the end of January. The lease ran through April. Party B was prepared to pay most of the back rent today, pay the rent for January timely, offer a payment plan to pay the rest of the back rent, but was unsure of how much could be paid by when. Party B also agreed to move out by the end of January.
As the mediation proceeded a number of issues were raised by the tenant regarding items where the landlord had not met code. These had been outstanding and were a major irritant to the tenant. The tenant had financial difficulties in his business, and shared the situation openly with the landlord. After spending some time trying to put together a plan with the tenant leaving by the end of January, the landlord asked the tenant if the tenant wanted to stay through April when the lease expired. The tenant agree that was his interest. That changed the entire mediation. The previous tentative agreement they had been working on was tossed aside and a new agreement was initiated with a payment plan through the middle of February that was workable for both sides. The new agreement focused on the tenant staying through the end of April.
What changed during the mediation?
Both parties were open and honest with each other.
Questions were asked by each party and the mediator that helped clarify underlying assumptions and interests.
The offer to close everything out by the end of January was not workable. Both parties realized this, but it took some time to reach that conclusion. However, when the landlord realized that the tenant also wanted to get the situation back to normal as soon as possible too, both parties really started listening to each other and the timeliest payment plan that was economically feasible was prepared. The landlord also agreed to a time table to address the tenant’s code violation concerns.
This could have gone to court. Significant time and money could have spent on attorneys, court costs and lost opportunity costs by both parties should an agreement not have been obtained. Additional toil, mental and physical anguish was avoided. In the end by sharing information, asking questions and considering multiple payment plan options, the parties were able to reach an agreement.
If you like to read more on this topic from the staff from the Program on Negotiation at the Harvard Law School see this article.