Recently I was involved in a negotiation where I helped two parties through a facilitation process. One party had hired me and as such I had my own bias relative to my client. At the same time, my purpose was to bring my client and the other party together if possible. These are lessons that can you can apply before you enter a negotiation. The facts are changed to protect confidentiality, but the concepts are right on point.
The difference between the two entities on a valuation issues was greater than $300 million and involved 8 separate entities.
One side had 8 individuals including the decision maker and the other side had 9 individuals including the decision maker. There were business appraisers, attorneys, various experts and key personnel with each party. The parties had set up a four-day meeting previously, but that had to be scrapped. On this day there was a two-hour meeting, a one-hour break for lunch and one-and-a-half-hour meeting. This was a virtual meeting over the phone with each group in a separate location. One of the parties did not want to meet in person. There were 8 major issues that both parties had agreed to ahead of time.
To initiate the meeting party A had suggested that they draft the agenda ahead of time and then ask for comments from party B to finalize the agenda.
Both parties had agreed to have a facilitator of the meeting.
It was my pleasure to be the facilitator. Party B set the time frame as the two-hour followed by a one-and-a-half-hour meeting with a one-hour lunch break in between. Party A agreed. Before drafting the agenda, Party A had a nearly full day meeting to discuss a host of items with their team. These were questions asked, that you may want to consider when preparing for a meeting like this, for a negotiation, a mediation or an arbitration.
Questions in preparation
What do I want from this negotiation? Think both short term from this meeting and longer term since a final decision on all of the would not be made on the day of this facilitation.
What are our strengths, weaknesses, opportunities and threats?
What values are we bringing to the table?
What are potential ethical issues that could come up? How might we be willing to address these should they come up?
What do we see as their interests?
What are our interests?
How should we rank these interests on our side and their side?
What objective criteria and data do we have that will support our preferred and alternative positions?
May there be other issues we or they may want to bring up to try to help with the negotiation?
What questions may we want to ask?
What deadlines are we facing? What deadlines are they facing?
Based on what we know about the individuals and previous experience with them, what lessons can we apply?
What can we say about our previous history with the other party? Can we leverage our past relationship?
What do we see as our Best Alternative To a Negotiated Agreement (BATNA) and what do we see as their BATNA?
At what point do we walk away from the negotiation?
At what point do we think they will walk away from the negotiation?
How many alternative computations do we want to make between our starting point and BATNA? That is to have ready to demonstrate how we calculate a number? We had our starting point, BATNA and three computations between those two points for a total of five computations. This was prepared for the first two valuations ahead of time with a template for the other six ready to go.
What research can we do to find out what could be their alternatives to their BATNA and their starting point?
Is there a Zone Of Possible Agreement (ZOPA) between us?
Who is going to bring up what and in what order? Are we flexible?
Who has what influence on their team? How might we work to deflate negative influences and encourage positive influencers?
What impact might our negotiation have on competitors for them or for us? Are there advantages or disadvantages to consider?
Based on the answers to the questions above, who should be on our team? Who is the spokesperson? What responsibilities does each person have?
With a focus on interest based decision making continue to look for ways to create value by focusing on closure, resources, preferences, potential outcomes and risk.
For other questions to ask consider this checklist from the Harvard Program on Negotiation. So back to the agenda.
The team came up with two agendas. One was for the two-hour meeting and the other was for the one-and-a-half-hour meeting. For the two-hour meeting a draft agenda was prepared as follows:
Agenda for two-hour meeting
Facilitation – ground rules, “parking lot or bin for future discussions”, making this a win-win negotiation, maintaining reputations, being fair and equitable, reciprocal integrity, work towards positive closure
Purpose of the call party B, then party A
Party B opening commentary
Party A opening commentary
Common concerns regarding all eight issues by Party A
Historical perspective on working towards an agreement
Break for lunch one hour – regroup working lunch and actions for next meeting
Agenda for one-and-a half-hour meeting
Facilitator welcome back and summarize key points from morning meeting, set the stage for the second meeting
Begin with first issue facilitation and work through issues as time allows
Wrap up and next steps
How did it go?
For the two-hour meeting following introductions, the facilitator thanked the parties for coming to the meeting, presented some ground rules and asked for any additions. A spokesperson for each side presented their interest to make this a win-win negotiation.
Without going into the details, a potentially explosive and negative negotiation did not materialize.
Instead the spokesperson for
each party sought ways to share unexplored information to the other party.
This was done to facilitate a better understanding of the facts. The approach proved to be extremely helpful in the first meeting.
For the one-and-a-half-hour meeting the first issue discussion with additional facts went relatively smoothly. Each agreed that technical personnel would be involved in follow up discussions. Moving into the second issue there were some legal discrepancies that needed further clarification by the attorneys on each side. Rather than move into the third issue it was decided that key players from each party would get together on all eight of the issues to further develop facts and work towards an agreement.
Action follow up
As a result of the discussion
additional information is being gathered for each issue. That information will be provided with a detailed table of contents.
It is suggested that key individuals meet with each other on each issue after the data and table of contents for the data is provide on each issue. The purpose of the discussions will be to see if the technical appraisers and key experts can work towards a mutual understanding on each issue. If they can then work will proceed to work towards an agreement. If not, the issues may need to be elevated to a similar meeting for negotiation. Tremendous progress was made at the two meetings. It would not have happened if Party A had not taken the time to prepare.
Their day of preparation for the three-and-a- half hours of meetings really paid off.
Hopefully you can learn from this too. Prepare, prepare and prepare for hard negotiations, mediations, and/or arbitrations.