Articles > Positional and Mutual Gains Negotiating (Part 1)
Positional and Mutual Gains Negotiating (Part 1)
by David Bryson
Norton Media
Prologue
In this article I will expound an approach that has carried a number of labels over time: principled negotiation, negotiating on the merits; most recently, mutual gains and most commonly, win-win. This approach was first described in print in 1981 by Roger Fisher and William Ury of Harvard University. Their book "Getting to Yes" is an essential starting point for further study on the subject. William Ury's follow-on book "Getting Past No" is the second step. Both of these texts are referenced for this article, as is material from the Consensus Building Institute.
The trouble with positional bargaining
The approach taken to most negotiations - positional bargaining - involves two or more sides taking positions, defending those positions as best they can, and by demanding and making concessions, perhaps coming to an agreement.
There are three main problems with the positional -bargaining approach. Firstly, arguing over positions produces unwise agreements (where wise can be defined as meeting the legitimate interests of each side to the extent possible, resolving conflicting interests fairly, being durable, and taking community interests into account). Secondly, arguing over positions is inefficient i.e. it takes a long time. Thirdly, arguing over positions endangers an ongoing relationship.
So, what's the answer?
The answer is not to be nice, gentle or soft. Such an approach leaves negotiators vulnerable to hard positional bargainers. There is only ever going to be one outcome of "hard" versus "soft".
The answer is to change the game. Principled negotiation is a method for negotiating mutually satisfactory agreements, for turning adversaries into negotiating partners. It can be defined by reference to four basic elements of negotiation:
| People: |
Separate the people from the problem. Avoid people’s emotions becoming entangled with the objective merits of the problem. |
| Interests(1): |
Focus on interests, not positions. Focusing on positions is unlikely to lead to an agreement which satisfies people’s underlying interests.
|
| Options: |
Generate a variety of possibilities before deciding what to do. The pressure of a negotiation does not lend itself to imaginative creation of the best possible agreement. You need to set time aside to do this. |
| Criteria: |
Insist that the result be based on some objective standard, such as market value or expert opinion. In this way neither side needs to give in to the other. |
But what if the other side doesn't want to co-operate?
Applying principled negotiation methodology in isolation is not going to produce the sought-for wise agreement, so how do we bring about co-operation in the face of confrontational behaviour? The answer is by applying an all-purpose, five-step strategy called "breakthrough negotiation", designed to turn confrontation into an exercise in joint problem solving.
The other side's resistance to joint problem-solving stems from five barriers, described below. For each of the five barriers, there is a corresponding step in the strategy.
Breakthrough negotiation
1.Barrier: your reaction. Our natural reaction to "no", or to being attacked, is to strike back. And there are other unhelpful reactions that we may have to different stimuli.
Strategy: Go to the balcony. Suspend your natural reaction, regain your mental balance and stay focused on achieving what you want. (The balcony is a metaphor for a mental attitude of detachment. Imagine yourself standing on the balcony looking down at the negotiation on the stage.)
2. Barrier: their reaction. You need to defuse their negative emotions such as fear, suspicion and hostility.
Strategy: Step to their side. Do the opposite of what they expect. Listen to them, acknowledge their points and feelings, agree with them, show them respect. Sit side by side, facing the problem.
3. Barrier: their position. Their positional behaviour is their usual approach to negotiation. You have to help them to take a different route.
Strategy: Reframe. Accept whatever the other side has to say and reframe it as an attempt to deal with the problem. Act as if they were your partners genuinely interested in solving the problem.
4. Barrier: their dissatisfaction. The other side may be unconvinced of the benefits of a mutually satisfactory agreement.
Strategy: Build a golden bridge. Don't try to push the other side towards agreement. Do the opposite: build them a bridge that they will be happy to walk over, from their position to a mutually satisfactory solution. ("Golden bridge" is a metaphor for a course of action that the other side comes to realise is the most attractive one for them to follow.)
5. Barrier: their power. If they can get what they want by power plays, why should they co-operate with you?
Strategy: Use power to educate. Enhance your own negotiating power and use it to bring them back to the negotiating table. Show them they cannot win by themselves but only together with you.
The mutual gains approach - a template for negotiation
Thus far we have identified the problem, laid out the principles of our approach, described the barriers that we are likely to encounter and proposed strategies for surmounting these barriers. What is now required is a practical model for your negotiations that incorporates these principles and strategies. That four-phase model is expounded now.
Prepare
The importance of preparation to the successful application of the mutual gains approach cannot be emphasized enough: prepare, prepare, prepare!
Clarify your mandate and define your team
- Estimate your BATNA(2) and theirs
- Improve your BATNA (if possible)
- Know your interests
- Think about their interests
- Prepare to suggest mutually beneficial options
Create Value
- Explore interests on both sides
- Suspend criticism
- Invent without committing
- Generate options and packages that "make the pie larger"
- Use neutrals to improve communication
Distribute value
- Behave in ways that build trust
- Discuss standards or criteria for dividing "the pie"
- Use neutrals to suggest possible distributions
- Design nearly self-enforcing agreements (3)
Follow through
- Agree on monitoring arrangements
- Make it easy to live up to commitments (4)
- Align organisational incentives and controls
- Keep working to improve relationships
- Agree to use neutrals to resolve agreements
These phases and their sequence can be regarded as a template for your approach to negotiation. However, the bullet points within each phase simply dictate the action required to ensure adherence to the principles of mutual gains. They are not, of course, a comprehensive list of action points for the successful execution of a negotiation.
In conclusion
Mutual gains negotiation in the commercial context provides a way out of the cycle of resentment that is often the result of positional bargaining between suppliers and customers. It emphasises relationships rather than quick profit, and creates, rather than merely distributing value. It requires and encourages a greater sharing of information allowing suppliers and customers to work together more efficiently and with less suspicion, thereby promoting long-term, productive relationships. Hardly surprising then that it is being adopted by an increasing number of corporations, particularly in the U.S.A., but also in other parts of the world.
Post-script
For purposes of clarity and impact, this article is written in the style of a committed proponent of the mutual gains approach. However, the views expressed are not necessarily those of the author. The next article in this series will be a critique and comparison of positional bargaining and mutual gains, and will provide a clear exposition of the author's views.
Notes
(1) It is important that the definition of "interests" in this context is clearly understood. In "Getting to Yes" Fisher and Ury comment: "The basic problem in a negotiation lies not in conflicting positions, but in the conflict between each side's needs, desires, concerns, and fears...Such desires and concerns are interests. Interests motivate people; they are the silent movers behind the hubbub of positions. Your position is something you have decided upon. Your interests are what caused you to so decide."
(2) BATNA - the best alternative to a negotiated agreement. Ask yourself the question: what will I do if we do not reach agreement? The best alternative course of action is your BATNA. Your BATNA is your walk-away alternative; it defines your walk-away point. The better your BATNA, the more power you have in negotiation.
(3) "Nearly self-enforcing agreements" are agreements that, firstly, spell out contingencies e.g. if A happens, then B will happen; if C happens, then D will happen. Inter alia, contingent contracts ensure that agreements do not cease just because things don't go exactly according to plan. Secondly, nearly self-enforcing agreements are likely to include monitoring by neutrals, to ensure that all parties stick to the terms of the agreement and perhaps to make judgments about compliance. Thirdly, such agreements might include penalties that will be incurred if certain things are done or not done.
(4) Make it easy to live up to commitments by including only those that are well-planned, realistic and operational.