Negotiation 101: The Art and the Science

Patullo Conference

October 8, 2013

Framework

The science: improve outcomes

The art: know thyself!

Practice makes perfect

Negotiation 101The art and science

Framework

The science: improve outcomes

The art: know thyself!

Practice makes perfect

Negotiation 101The art and science

In the beginning was choice, and all history can be seen

as an unending effort to manage it

Framework

The science

The art

Practice

What’s to negotiate?

Framework

The science

The art

Practice

What’s to negotiate?

Framework

The science

The art

Practice

What’s to negotiate?

Framework

The science

The art

Practice

What’s to negotiate?

√?Decision Point

Business-as-usual

Divergent Zone

Groan Zone

Convergent Zone

Kaner, 1996

Framework

The science

The art

Practice

What’s to negotiate?

Classic Attitude Equation

A = ∑ v1w1 ,

where v1 is belief contentw1 is belief importance

w1 = ∑ (z1-y1) x1

z1 is an emphasis frame (nominal values)x1 relates to priming (0-1)y1 is an equivalence frame (quantify gain/loss)

Prospect Theory

• Reflects status quo bias and loss aversion

Value

Out

com

eLosses Gains

Posi

tive

Neg

ative

Framework

The science: improve outcomes

The art: know thyself!

Practice makes perfect

Negotiation 101The art and science

Framework

The science

The art

Practice

Four-step processFive things you have to identifyFirst choice

•Data gathering

•Definition of the problem

•Developing options

•Bargaining/Problem-solving

Framework

The science

The art

Practice

Four-step processFive things you have to identifyFirst choice

Inventing Options• Broadening the Pie

– Create additional resources so that both sides can obtain their major goals

• Nonspecific Compensation– One side gets what it wants and the other is compensated

on another issue • Logrolling

– Each party makes concessions on low-priority issues in exchange for concessions on issues that it values more highly

• Cost Cutting– One party gets what it wants; the costs to the other are

reduced or eliminated • Bridging

– Neither party gets its initial demands but a new option that satisfies the major interests of both sides are developed.

Framework

The science

The art

Practice

Four-step processFive things you have to identifyFirst choice

Framework

The science

The art

Practice

Four-step processFive things you have to identifyFirst choice

• Aspiration point: dream outcome• BATNA: what’s left if a negotiation

breaks down or doesn’t happen• Resistance point: worst outcome

that’s still acceptable• ZOPA: the space where the

negotiation happens• First offer

Framework

The science

The art

Practice

Four-step processFive things you have to identifyFirst choice

BATNA what?• Best Alternative To a Negotiated Agreement

– BATNA is the choice you can make if you conclude that negotiating with a particular party is not likely to yield a favorable result.

– You can walk away from a negotiation if your BATNA is better than the likely outcome of that negotiation.

• Establishes: Resistance points (worst case scenario that’s acceptable in a negotiation)

Framework

The science

The art

Practice

Five-step processSix things you have to identifyFirst choice

Zone of Potential Agreement

Framework

The science

The art

Practice

Four-step processFive things you have to identifyFirst choice

Integrative (collaborative, win-win)

•there is a variable amount of resources to be divided and both sides can "win." •dominant concern here is to maximize joint outcomes. •dominant strategies include cooperation, sharing information, and mutual problem solving. This type is also called "creating value" since the goal here is to have both sides leave the negotiating feeling they have greater value than before.

Distributive (competitive, zero sum, win-lose)

•one side "wins" and one side "loses." •there are fixed resources to be divided so that the more one gets, the less the other gets. •one person's interests oppose the others. •the dominant concern in this type of bargaining is usually maximizing one's own interests. •dominant strategies in this mode include manipulation, forcing, and withholding information.

Framework

The science

The art

Practice

Four-step processFive things you have to identifyFirst choice

Concessions• Small concessions give the impression that the

bottom line is not far off.   • Large concessions indicate that a lot more can

still be conceded before the bottom line is reached.  

• Rapid or large concessions undermine the credibility of the initial offer.  

• All concessions teach the lesson that more concessions will be made.

• Never split the difference!

Framework

The science: improve outcomes

The art: know thyself!

Practice makes perfect

Negotiation 101The art and science

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?

• Know• Monitor• Inject resources• Follow up

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

Forcing

Shark

“my way or the high way”

Imp

ort

ance

of

Pers

onal

Goals

Importance of Relationships

Collaborating

Owl

“I would prefer x, but what do you want?”

Avoiding

Turtle

“Conflict? What conflict?”

Accommodating

Teddy Bear

“Whatever you say…”

Adapted from Anthony Falikowski's 2002 book, Mastering Human Relations

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

Adapted from Anthony Falikowski's 2002 book, Mastering Human Relations

Forcing

Win-lose

•authoritarian

•reactive

Ass

ert

iveness

Cooperativeness

Collaborating

Win-win

•focuses on process

•energized by differences

Avoiding

Lose-lose

•timid

•weathers the storm

Accommodating

Lose-win some

•wishy-washy

•need to please

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

High Culture……Underlying social contract is

most important

• Collectivist societies– Maintaining face– Group harmony

• Talk is more about preserving social harmony than transmitting information

• Inaccuracy and evasion are preferred to painful precision, especially in the culturally loaded use of ‘no’

Low Culture……The preeminence of the

individual

• Meaning is explicit in the text

• Language is informational rather than a social lubricant

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

If all else fails, ask a question•Exploring positions

– Ask, why not?– Allow them to correct you

• What I hear you saying is x, is that correct?

– Build trust by showing some of your hand

•Finding interests– Ask, what if?– Ask for their advice

• What would you do in my shoes?

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

And watch the response…•Emblems–specific gestures with specific meaning that are consciously used and consciously understood. –used as substitutes for words and are closer to sign language than everyday body language.

•Iconic gestures–closely related to speech, illustrating what is being said

•Metaphoric gestures–Used to explain a concept

•Regulators–used to control turn-taking in conversation

•Affect displays–used to display emotion

•Beat gestures–plays to primitive feelings of basic patterning –used to create emphasis and grab attention.

Non-Verbal Behavior• Brisk, erect walk• Hands on hips• Arms crossed on

chest• Hand to cheek• Rubbing eyes• Hands clasped behind

back• Fondling hair• Tilted head• Stroking chin

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

Interpretation• Confidence• Aggressiveness,

readiness• Defensiveness,

relaxed• Evaluation• Disbelief, tiredness• Anger, frustration

• Insecurity, flirting• Taking an interest• Trying to make a

decision, taking over the world

Patterns• Moving away• Closing• Preening

• Pulling back the head in fear, confusion or surprise.

• Pulling back arms or shoulders.

• Hollowing the chest, pulling it back.

• Turning away the head and, in extreme, showing the back.

• Stepping back.

•Lowering the head, with chin down (protecting the neck). •Closing mouth and eyes, lowering eyebrows refusing speech and sight. •Crossing arms or legs, pulling in shoulders, elbows and knees to protecting organs and vulnerable parts. •Turning hands to palms facing down. •Curling fingers into the palm, protecting them (and also making a fist). •Turning feet to point toes inwards. •Hunching down, with any or all of the above, making the body less threatening and a smaller target.

•Straightening the tie or other clothes. •Looking in a mirror. •Curling lips to even out lipstick. •Brushing imaginary lint off arms or legs. •Patting down hair or combing it with the fingers.

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

Framework

The science

The art

Practice

The K-MIF wayWho am I?How do I figure you out?Injecting resources

Injecting Resources

Framework

The science: improve outcomes

The art: know thyself!

Practice makes perfect

Negotiation 101The art and science