Interest-Based Negotiation

TrainingNick Tomb, Izumi Wakugawa

Global Majority

Promoting Peace Through Dialogue Amman, Jordan

July 21, 2008

2 Negotiation Approaches

CompetitiveInterest-

based

Competitive (Distributive)

Competitive (Distributive)

Relies on “Positional Bargaining”

Parties stake out a position and engage in a contest of wills/egos

Seek concessions from other partyPursue one (single) solution to the

problemDevelop a single “bottom line” as

part of the single solution sought

Relies on “Positional Bargaining”

Parties stake out a position and engage in a contest of wills/egos

Seek concessions from other partyPursue one (single) solution to the

problemDevelop a single “bottom line” as

part of the single solution sought

Interest-based (Principled)

Interest-based (Principled)

1. Hard on problem, soft on PEOPLE

2. Identify INTERESTS that compel various positions

3. Brainstorm multiple OPTIONS to find best solution(s)

4. Develop BATNA (Best Alternative to a Negotiated Agreement)

5. Rely on OBJECTIVE CRITERIA (Fair standards)

1. Hard on problem, soft on PEOPLE

2. Identify INTERESTS that compel various positions

3. Brainstorm multiple OPTIONS to find best solution(s)

4. Develop BATNA (Best Alternative to a Negotiated Agreement)

5. Rely on OBJECTIVE CRITERIA (Fair standards)

1. People (the parties)

1. People (the parties)

Research/Investigation:

Who are your counterparts?What are their fears, ambitions,

goals, and preferred outcomes?Who is their constituency? To whom

must they defend the agreement?

Research/Investigation:

Who are your counterparts?What are their fears, ambitions,

goals, and preferred outcomes?Who is their constituency? To whom

must they defend the agreement?

People (cont’d)People (cont’d)

What is their AUTHORITY?

Power to make a dealPower to “bind” their government,

company, organizationIs it limited? Who has ultimate

authority? How to determine? ASK!!!

What is their AUTHORITY?

Power to make a dealPower to “bind” their government,

company, organizationIs it limited? Who has ultimate

authority? How to determine? ASK!!!

People (cont’d)People (cont’d)

What is your AUTHORITY?

Do you have power to enter agreement?

To whom do you report?Use of “limited authority” to your

advantage.

What is your AUTHORITY?

Do you have power to enter agreement?

To whom do you report?Use of “limited authority” to your

advantage.

People (cont’d)People (cont’d)

Build the RelationshipFuture DealingsReputation (honesty, ethics,

implementation of agreements)Multiple Parties, Interest

Groups & Constituencies

Build the RelationshipFuture DealingsReputation (honesty, ethics,

implementation of agreements)Multiple Parties, Interest

Groups & Constituencies

2. Identify Interests2. Identify Interests

Interests are what lie behind positionsOften related to security,

sovereignty, legitimacy, reputation, economic security, justice, survival needs, moral commitment, etc.

What are your INTERESTS?

Interests are what lie behind positionsOften related to security,

sovereignty, legitimacy, reputation, economic security, justice, survival needs, moral commitment, etc.

What are your INTERESTS?

Identify Interests (cont’d)

Identify Interests (cont’d)

What are their INTERESTS?To determine interests, ask “Why”

or:“What is it about this price, solution, or offer

that you consider most important?”

What are other parties’ INTERESTS? govt. agencies, organizations, consumers,

clients, voters, media, competitors, etc.

What are their INTERESTS?To determine interests, ask “Why”

or:“What is it about this price, solution, or offer

that you consider most important?”

What are other parties’ INTERESTS? govt. agencies, organizations, consumers,

clients, voters, media, competitors, etc.

3. Invent Options3. Invent Options

A. Create atmosphere of open BRAINSTORMING, to develop MULTIPLE OPTIONS

B. Be Creative - Invent Multiple Options/Solutions

C. Expand the “Pie”D. By understanding the parties’ real

INTERESTS you can fashion creative options/solutions that they may not have considered

A. Create atmosphere of open BRAINSTORMING, to develop MULTIPLE OPTIONS

B. Be Creative - Invent Multiple Options/Solutions

C. Expand the “Pie”D. By understanding the parties’ real

INTERESTS you can fashion creative options/solutions that they may not have considered

Invent Options (cont’d)Invent Options (cont’d)

E. Use flip charts, butcher paper, black boards, white boards, etc.

F. Create a JOINT PROBLEM SOLVING relationship.

G. Invite wild, extreme, unorthodox, ideas and options.

H. Create a LISTI. DO NOT reject or select any proposal

during a brainstorming session.

E. Use flip charts, butcher paper, black boards, white boards, etc.

F. Create a JOINT PROBLEM SOLVING relationship.

G. Invite wild, extreme, unorthodox, ideas and options.

H. Create a LISTI. DO NOT reject or select any proposal

during a brainstorming session.

Invent Options (cont’d)Invent Options (cont’d)

J. Prioritize the list by eliminating, amending, selecting, and ranking potential options/solutions.

K. Introduce a SINGLE TEXT DOCUMENTYou present a written draftYou INVITE critique, amendments, and editsObtain signatures/initials on single text

documents - interim agreements, procedural agreements (=Confidence boosters.)

J. Prioritize the list by eliminating, amending, selecting, and ranking potential options/solutions.

K. Introduce a SINGLE TEXT DOCUMENTYou present a written draftYou INVITE critique, amendments, and editsObtain signatures/initials on single text

documents - interim agreements, procedural agreements (=Confidence boosters.)

4. Develop “BATNA”4. Develop “BATNA”

“Best Alternative to a Negotiated Agreement” in three steps:

Step #1. Develop your “Walk Away Alternative” (OPTION)

Market place exampleEmployment example

“Best Alternative to a Negotiated Agreement” in three steps:

Step #1. Develop your “Walk Away Alternative” (OPTION)

Market place exampleEmployment example

Develop BATNA (cont’d)

Develop BATNA (cont’d)

Step#2. Build your BATNA Research/investigation Use of “objective criteria” or evidence to

support your positionsIncreases your negotiating power

Step#3 Reduce power of their BATNAResearch/investigation/use of evidence,

objective criteriaThey gain more if they stay in the negotiation

Step#2. Build your BATNA Research/investigation Use of “objective criteria” or evidence to

support your positionsIncreases your negotiating power

Step#3 Reduce power of their BATNAResearch/investigation/use of evidence,

objective criteriaThey gain more if they stay in the negotiation

5. Use Objective Criteria

5. Use Objective Criteria

Use of “Fair Standards” to assist in the resolution of disputes/conflicts

Introduce a non-controversial authority or standard:

Precedent decisions (legal, administrative, WTO, NAFTA, etc.)

Industry practice and standards (example: prevailing wage rates)

Scientific StudiesExpert testimony or analysis

Use of “Fair Standards” to assist in the resolution of disputes/conflicts

Introduce a non-controversial authority or standard:

Precedent decisions (legal, administrative, WTO, NAFTA, etc.)

Industry practice and standards (example: prevailing wage rates)

Scientific StudiesExpert testimony or analysis

Objective Criteria (cont’d)

Objective Criteria (cont’d)

Easier to accept an “outside authority” or established standard as a “fair means” of dispute resolution

Useful phrases: “All we want is an agreement that is fair…”“Show me why you consider this to be a fair

offer?”“How did you arrive at this amount,

proposal, position, etc.?”

Easier to accept an “outside authority” or established standard as a “fair means” of dispute resolution

Useful phrases: “All we want is an agreement that is fair…”“Show me why you consider this to be a fair

offer?”“How did you arrive at this amount,

proposal, position, etc.?”

5. Objective Criteria3. Invent

Options

2. Identify Interests

1. Focus on People

Interest-based Negotiation:

Summary

4. Develop BATNA

Developing Your Negotiation Strategy (5

Steps)

Developing Your Negotiation Strategy (5

Steps)1. Problem Identification

What is the nature of the problem?

2. Determine your Preferred OutcomeRemember, there may be multiple options

or solutions that will satisfy your interests.Can you describe what you want? Can you

put it in writing? Are your team members in agreement? Can you speak with “one voice”

1. Problem IdentificationWhat is the nature of the problem?

2. Determine your Preferred OutcomeRemember, there may be multiple options

or solutions that will satisfy your interests.Can you describe what you want? Can you

put it in writing? Are your team members in agreement? Can you speak with “one voice”

Developing Your Negotiation Strategy

(cont’d)

Developing Your Negotiation Strategy

(cont’d)3. What is your Counterpart’s

Preferred Outcome?4. Reverse Roles

Can you articulate your counterpart’s interests, goals, and BATNA?

Engage in active role-playing with your

negotiating team members.

3. What is your Counterpart’s Preferred Outcome?

4. Reverse RolesCan you articulate your counterpart’s

interests, goals, and BATNA?Engage in active role-playing with

your negotiating team members.

Developing Your Negotiation Strategy

(cont’d)

Developing Your Negotiation Strategy

(cont’d)5. Make a Chart5. Make a Chart

People Interests Options BATNA Criteria

Six Negotiation Techniques

Six Negotiation Techniques

1. Use of time, place, & environment

1. Use of time, place, & environment

Negotiation Techniques (cont’d)

Negotiation Techniques (cont’d)

2. Active Listening Reframe what you have heard

“Let me see if I understand you correctly…”“What I understand you to be saying is…”“Correct me if I am wrong, but what I hear

you saying is...”Tells your counterpart that you are listening;

you are hearing what they are trying to expressYou don’t have to agree with them, you are just

establishing the fact that they are being heard

2. Active Listening Reframe what you have heard

“Let me see if I understand you correctly…”“What I understand you to be saying is…”“Correct me if I am wrong, but what I hear

you saying is...”Tells your counterpart that you are listening;

you are hearing what they are trying to expressYou don’t have to agree with them, you are just

establishing the fact that they are being heard

Negotiation Techniques (cont’d)

Negotiation Techniques (cont’d)

Ask Questions“What if we did x, y, or z ...?”“How do you arrive at that position?”“What information do you rely upon..?”“How do you feel about…?”“Do you think it would work if we tried...?

Why not? How could we make it work better? What would you recommend? What would be acceptable to you?”

Ask Questions“What if we did x, y, or z ...?”“How do you arrive at that position?”“What information do you rely upon..?”“How do you feel about…?”“Do you think it would work if we tried...?

Why not? How could we make it work better? What would you recommend? What would be acceptable to you?”

Negotiation Techniques (cont’d)

Negotiation Techniques (cont’d)

3. Take Breaks (go to the balcony)DON’T be pressured into a hasty,

unwise, or rapid decision“Example: “You have made an

interesting proposal. Let me take five minutes to discuss it with my colleagues (team members).”

3. Take Breaks (go to the balcony)DON’T be pressured into a hasty,

unwise, or rapid decision“Example: “You have made an

interesting proposal. Let me take five minutes to discuss it with my colleagues (team members).”

Negotiation Techniques (cont’d)

Negotiation Techniques (cont’d)

DON’T be pressured into a “TAKE IT OR LEAVE IT ULTIMATUM”“I realize you have put much time and

thought into the development of this proposal. I would like to review it with the same care and consideration with which you prepared it. Let’s meet again tomorrow at the same time.”

DON’T be pressured into a “TAKE IT OR LEAVE IT ULTIMATUM”“I realize you have put much time and

thought into the development of this proposal. I would like to review it with the same care and consideration with which you prepared it. Let’s meet again tomorrow at the same time.”

Negotiation Techniques (cont’d)

Negotiation Techniques (cont’d)

4. Use “SINGLE TEXT DOCUMENTSWrite down your proposals as to

procedural agreements, timetables, substantive terms and conditions, etc.

5. Identify DIRTY TRICKS, STRONG ARM TACTICS & RUDE BEHAVIOR

6. Build your REPUTATION … for fairness, follow-through, and

reliable implementation of agreements.

4. Use “SINGLE TEXT DOCUMENTSWrite down your proposals as to

procedural agreements, timetables, substantive terms and conditions, etc.

5. Identify DIRTY TRICKS, STRONG ARM TACTICS & RUDE BEHAVIOR

6. Build your REPUTATION … for fairness, follow-through, and

reliable implementation of agreements.

Negotiation Skills Application

Negotiation Skills Application

Group ExercisesGroup Exercises