Post #4: Negotiation Analysis. An Introduction

Negotiation Analysis. An Introduction

“Questions are the gateway to knowledge. To obtain greater insight, ask better questions.” 

(c) Greg Williams, The Master Negotiator & Body Language Expert

Being successful in a negotiation comes from hard and long preparation. So one of the most important things before starting negotiating is to ask right and intelligent questions. In these posts I will talk about some approaches which I personally find important to apply while negotiating.

1. BATNAs: What will the respective parties do if they don’t come to agreement?

As I mentioned in my previous posts, BATNA is the Best Alternative To Negotiate Agreement. In other words, it is a Plan-B when an agreement is not reached. However, it does not mean that it is out the bottom line in which we have no other choice than accept the deal. It means that we have to identify and articulate our best or doable alternatives to a negotiated agreement. We should all foreknow the implication, the consequences, the risks, the time pressure and the costs of our and their BATNA. If we do not want the result to be “zero-sum”or distributive we must lead a deep and careful analysis to improve our BATNA. Moreover, we have to identify the best and worst alternatives open to the other side and to understand how we can make their Batna worse for them. 

2. Interests: What are their fundamental needs and priorities?

Assessing interests is important before and during negotiation and even at the end when agreements are being refined and implemented. Unfortunately, getting an answer to this question isn’t always straightforward, so it’s important to identify potential stakeholders and their needs and motivators. There is not just those sitting at the table, but also parties who are unseen but clearly present. In sum, the more we understand the interests of every party involved, the better the chance we have to help them get what they want, which in turn, can often help us get what we want. 

3. Value: How can value be created—and who is likely to get it? 

After identifying our interests and those of our negotiators, the next question we will ask is how value is created. Value is generated in negotiation by capitalizing on differences, not necessarily by finding common ground. Differences may be in valuation, expectations, discount rates, or attitudes toward risk. Unless they are creatively exploited, the parties will squander opportunities that could benefit them both. 

4. Barriers: What obstacles might prevent agreement (or the maximization of value), and how can they be overcome?

One of the barriers is the high concentration on a strategic behavior and on value-creating opportunities trying to win at all costs. The second one is called a psychological and interpersonal barrier. It is very important to maintain control under emotions and not to judge your opponent according to some social stereotypes during negotiations. Careful negotiation analysis also means recognizing possible barriers to agreement as well as structural elements that might be advantageously rearranged. 

5. Ethics: what is the right thing to do? 

All mentioned tasks reveal important moral and ethical issues. It is something about what is wrong and what is right? Knowing the norms of ethics and negotiation can be useful whether we are negotiating for ourselves or on behalf of someone else. We should ask ourselves the following questions: would I advise anyone else in my situation to act this way? Do I want others to treat me in this way? It plays a lot on the emotional aspects and conscience of each negotiator.

Conclusion: 

This lesson helped me understand that rigorous negotiation analysis is necessary for success. However, it is not sufficient. In my opinion, it is not enough to make good negotiation strategies, a negotiator must have personal qualities and know how to persuade his/her counterparts. We have to listen to them in order to demonstrate to the others that we have heard and understood what they have said. We also must have the creativity ability because sometimes results depend on the counterparts’mood and attitudes with whom we will deal.

Post #3: Roleplay: Salt Harbor

Roleplay (Salt Harbor)

During the second negotiation class we once again played a game. It was as joyful and effective as during the first class except that this time we were all smarter and more analytical in the elaboration of our strategies. We tried to apply the four key concepts of negotiation we learned about last time. Nobody wanted to lose or make a mistake, so we paid very close attention to all details.

Description:

This time I was given the role of the owner of the Easterly, a successful inn, located in the seaside village of Salt Harbor. However, in the midst of my success I faced a challenge—Brims (a regional chain of coffee shops) bought the vacant parcel of land facing the harbor just near to my hotel. They already had a permit to build a one-and-a-half-story structure that would block the view from the best rooms of my hotel. That could have a bad impact on my business and its profit. According to my lawyer, if I went to court, I would have 50% chance of stopping the building of the Brims’ new coffee shop. Moreover, it would probably take many years and cost a lot of money. Thus, the best way to act was to purchase the lot from Brims and to prevent someone else from building on it keeping the value of the inn. 

Negotiations:

My objective was to purchase the land at the best price possible taking into account all details and following all prices mentioned in my role instructions. According to my data, Brims paid $100,000 for the given parcel 3 months ago. Even if an alternative site for Brims would probably cost $200,000 my first price offer was $120,000. I thought that real estate market at the moment of purchase could be higher and I did not want to offer more because it is always better to start with a little amount. Moreover, at my heart I was hoping my opponent would agree. A rough “no” for the last offer brought me back to earth. The first offer of my opponent was $250,000 which was a lot for me even if my reservation price (or walk-away price) was $350,000. Of course, I could agree with the opponent’s first offer because technically it suited me! However, shake hands without even trying to negotiate for a lower price would be a bad idea. Moreover, my assignment was to purchase Brims’ land at the BEST price, so the last one I realistically hope for was $220,000. In this case, my BATNA would be to purchase the Brims’ land for $350,000 if its manager did not agree with my best price. 

Thus, I was quite calm and emotionless during the negotiations. I asked many questions in order to find some arguments and make Brims’ negotiator change her mind and agree with my price offer. At the end of our negotiations I raised my price to $190,000 and Brims’manager finally agreed and we shook hands. Both sides were absolutely satisfied by the deal because we both found our zone of possible agreement. 

Post #2: Four Keys Concepts : BATNA

Four Key Concepts: BATNA

The article about Four Key Concepts of negotiation was very useful to read in order to complete my understanding of the last Negotiation class. Moreover, it allowed me to think better of my attitudes on this subject. So, I was wondering about how I could apply these concepts in the professional world. Such as good explanation and clear examples of some negotiation cases mentioned in the article also brought me back into my personal life and allowed me to think of my mistakes I have done when I had to negotiate. In this post I will mostly deal with BATNA concept because it is more complex and complicated among other concepts regarding my experience. 

BATNA:

Concerning BATNA (best alternative to negotiated agreement), the main idea of which is to have a good analytical Plan-B in the case if the first negotiations fail, I thought of the search for an internship. When I was looking for an internship for the first time at the end of my Bachelor’s, my BATNA was very weak. Due to stress and pressure put by university teachers (all students will understand) I hurried and accepted an offer in a local company in Strasbourg just because I wanted to finish with the this as soon as possible even though I have a plenty of time for research. It was my huge mistake, which led me to a bad first experience in my professional life. That internship was not paid and was not even interesting to me and I’m sure that I would have another better offer to accept. So I was in a bad and weak position and I was not satisfied by the “deal”. This year I will not repeat mistakes previously made. I will, first of all, follow my own interests. I will be more strategic and confident and less fast in deciding. I will try to analyse more all possible issues. As an example. I already have an internship offer from UNESCO but I continue searching and analysing other propositions. Anyway, I think it is a good strong BATNA for instance. 

Post #1: Roleplay The Two-Dollar Game

Roleplay: The Two-Dollar Game

Within the framework of our Business Negotiation classes in Paris-Sorbonne University we had an occasion to play the two-dollar game. The last one was consisting in a bargaining simulation between two people in order to divide $2 found on the ground. There were 2 rounds of the game. Before starting negotiating we were given a secret play card, which described a play role for each participant. Our partner had not to know the role of another one. Our goal was to make up any story we wanted to get as much of $2 as possible. That game was an objective to understand some basic tools of negotiation theory. 

In the first case we were all best friends with our partners. According to my secret play card I needed only 50 cents to take a bus to get home. Being a gambling person and having an objective to get as much money as possible, I bargained about getting all penny. As I knew, later, it was a competition strategy which was considered as a negative bargaining range. For real, I created incredible stories about everything coming to my mind, sometimes I was absolutely illogical so all my reasons were not much convincing which made me lower my sum in order to get at least something. This was my strategy mistake. Even if at the end I got only 50 cents (money I needed), I was not satisfied by the deal because I wanted to get more. I can consider that our first round of negotiations had the nature win-lose bargaining, in which my gain was the loss than my partner’s gain. 

However, I was “smarter” in the second round of the game. The general instruction was the same but the roles of the participants were different. The second round was more intangible which above all played on emotions. I had to act as an important famous person for whom the reputation was extremely important, so I had to get as much of the $2 as I could and at the same time to keep my reputation. If in the first round, I was concentrated on the amount of money I could win, this time my objectives were more concerned about the emotional aspects. Honestly, I felt a big difference and I realized that it had prevented me from negotiating. At the end, in order to finish our discussion, my partner and I broke the rules and came up with collaborative side deals. As a result we were both satisfied (win-win bargaining).