Preparation for Negotiation

Definition of Planning

Planning represents the totality of engagements, both cognitive (mental activity, thinking, creating, conceiving, imagining) and behavioral (doing), that the negotiators (and their team) are involved in prior to entering the phase of joint decision-making.

How Skilled Negotiators Plan

According to Lewicki et al. (p. 89):

  • Skilled negotiators explored a wider range of options for action.

  • They worked harder to find common ground with the other party.

  • They spent more time considering the long-term implications of the issues.

  • They were significantly more likely to set upper and lower limits or the boundaries of a “range” of acceptable settlements.

  • However, there was no evidence that skilled negotiators spent more time in the actual process of planning.

Perspectives on Planning & Preparation

Key Terms

Negotiators should understand these planning-related terms:

  • Strategy

  • Tactics

  • Style
    It's important to triangulate information and not rely on a single source. Refer to textbooks to understand how these terms are used.

Effective Strategizing

Effective planning and strategizing are critical precursors for achieving negotiation objectives. With effective planning and target setting, most negotiators can achieve their objectives; without them, results occur more by chance than by the negotiators' effort (Lewicki et al., 2001, p. 22).

Ury on Preparation

Before every meeting, prepare. After every meeting, assess your progress, adapt your strategy, and prepare again. The secret of effective negotiation is that simple: prepare, prepare, prepare. The more difficult the negotiation, the more intensive your preparation needs to be (Ury 1993, p. 16).

Gates on Planning and Preparation

According to Gates:

  • Planning and preparation is the most important activity you will undertake, so don’t ‘wing it’ (p. 98).

  • Starting with an agenda will help you promote order, options, and more collaborative dialogue (p. 123).

  • It is the most fundamental element of negotiating, and it is only when the deal is done that the value of this can be fully appreciated. There is a direct correlation between how well you have planned and the outcome of your negotiations (p. 169).

  • It should help you to create more value from your agreements, starting with expanding the issues and variables available (p. 179).

Analogy

Negotiation is like building a house; you would not start without completing the drawings, working through your calculations, and estimating your costs (Gates, p. 170).

McCarthy & Hay on Planning

Planning is the first and most critical phase of negotiation for ensuring a successful outcome and it doesn’t stop there! Planning permeates every stage of negotiation, and you should review and refine your plans during and in between every other phase of the negotiation. This is called the cycle of planning (p. 21).

Planning vs. Preparation

The terms planning and preparation are often seen as synonymous. It is important to consider if they are the same, if you can plan without being prepared, and if you can prepare without a plan.

Importance of Planning & Preparation

A 5-Stage Model

A negotiation model can be broken into two phases: the pre-negotiation phase and the negotiation phase. In reality, negotiations typically include a feedback loop. The 5 stages are Planning and Negotiating.

Importance of Identifying the Phases

Negotiations go through several distinct phases and are always at one of these phases. Knowing which phase you are at will assist you in knowing what tactics to employ to move the negotiation forward. Your negotiating frame may change as you proceed; different strategies and tactics may apply (p. 11).

Pre-negotiation/Planning Phase

  • Decide if you are in a negotiating situation.

  • Clarify goals.

  • Set context - atmosphere, time, and place.

  • Research - plan, prepare.

  • Assessment of self and other parties.

The Planning Phase (Continued)

The planning phase is absolutely critical. During this phase you should:

  • Identify the issues.

  • Establish your positions, wants, needs, desires, and boundary conditions, not only in relation to yourself but also in respect of the other party(ies) wherever possible.

  • Prioritize and place values on the issues you want or need.

  • Coordinate with your team.

  • Obtain mandates (where necessary).

  • Establish goals - imagine what a good agreement looks like.

The Role of Goals

Goals are important and affect negotiations in four ways. It is important to reflect on your experience with goal-setting in negotiation and how goals have affected your approach and outcomes in the past.

Negotiation Phase

  • Opening, pleasantries, clarification, setting the tone.

  • Discussion - talking, listening, and making offers, counteroffers, and proposals.

  • Summarize.

  • Close and confirm.

Post-Negotiation Phase

  • Evaluate outcomes, performance, strengths, and weaknesses.

  • Continue your development and make resolutions for the future.

A Checklist Approach to Planning

Elements of Planning

  • Defining the Issues

  • Defining the Bargaining Mix

  • Consultation

  • Setting Goals

The Bargaining Issues

The first step in negotiation planning is to define the issues to be negotiated (Lewicki et al., p. 41) through:

  • An analysis of the conflict situation

  • Own experience with similar situations

  • Research

  • Consultation with experts

What are Issues

An issue is anything over which the negotiators have discretion (Kennedy, p. 16), such as:

  • The price of a product

  • The quality available

  • The delivery time

  • Salary

Identifying the Issues

In most negotiating situations, there is a central issue (e.g., money), but there are also a number of subsidiary issues which may allow the parties to add value to a negotiation. Negotiators should try to make single-issue negotiations more complex by adding issues.

Establishing Priorities

For every issue, you must write down what you want and establish how important each issue is to you.

Simple Prioritizing

  • High Importance: those goals that you must achieve in order to settle.

  • Medium importance: those goals that you would prefer to meet if you could, but you are prepared to settle without.

  • Low importance: those goals that would be nice to have, but which you would not sacrifice an agreement over (Kennedy, p. 17).

Valuation of Issues

You should put values on the issues being discussed, such as:

  • J\$500,000 – 600,000 for car

  • Delivery by latest January 31

Analyzing the Negotiation

  • Self-assessment

  • Assessment of the other party

  • Assessment of the situation - environment

  • Developing supporting arguments

Defining Interests

Interests are the reasons underlying the issues that we place on the table. Interests can be:

  • Substantive

  • Process-based

  • Relationship-based

  • Based on the intangibles

Consultation

  • Consulting with constituency

  • With other side in respect of:

    • The agenda

    • Negotiating protocol

      • Location of negotiation

      • Time period

      • Other parties who might be involved

      • What if negotiation fails . . .

Location

Place involves many issues:

  • Comfort

  • Confidence inspired

  • Access to information

  • Home ground advantages and disadvantages

  • Neutral territory (who should choose it)!

Timing

  • Opponent has high need, you have low need.

  • Avoid spontaneous negotiations - if possible.

  • You may need to patiently draw reluctant negotiators to the table.

Are You in a Negotiating Situation?

  • Are you dealing with people’s opinions, religious beliefs, or other core values?

  • Is it worth your while – are potential benefits substantial enough, or is your BATNA better?

  • Do you have enough bargaining power, or are the odds stacked against you?

  • Are you really interested in an outcome?

Consider Alternatives to Negotiating

  • Non-engagement – do nothing.

  • Consultation (could result in an erosion of their objectives).

  • Selling the idea - (persuade the other party to accept your position).

  • Capitulation – agreeing to their terms, or their agreeing to yours.

  • Extreme forcing – taking what you want

  • Going to a third party - Arbitration, Mediation, and ADR (alternative to litigation)

Negotiable Situations

Negotiable situations are those which hold the potential for you to gain advantage through discussion. Such situations may or may not hold advantages for the other party.
‘Engage only when it is in the interest of the state; cease when it is to its detriment. Do not move unless there are finite advantages to be won’ (Sun Tsu – The Art of War – 400-320 BC).

Alternatives

Alternatives are a central concept in a negotiation. BATNA is perhaps the central concept in negotiation.

  • Consider the potential consequences for BOTH PARTIES of a negative outcome.

  • Consider the ALTERNATIVES TO NEGOTIATION that may be available to both parties

  • Find data to help you understand the balance of power between the parties.

  • Carry out full and comprehensive DUE DILIGENCE.
    “Every dollar you spend in planning will pay you back tenfold in the end”.

The Agenda or Bargaining Mix

The “bargaining mix” is the catalog of issues over which the parties will be negotiating.

  • Assembly the bargaining mix

  • Prioritize the bargaining mix

    • Which issues are the most important

    • Determine if issues are linked

Setting the Agenda

There are various views about agenda setting.

  • Negotiators who meet with a view to collaborate must agree on a common agenda.

  • Hidden agendas are common, particularly in distributive negotiations, though they may raise issues of trust and credibility.

  • One or both parties may find it desirable to craft a formal, jointly signed agreement on general principles and perhaps a letter of intent before the start of any negotiation.

  • In some instances, parties may bargain over how to bargain.

Summary

Skilled negotiators know that it is unwise to rely on instincts in approaching negotiations, especially those that are complex and high-stakes.
It is widely accepted that planning and preparation are important determinants of outcomes in all negotiations.
This process is assisted by “planning models” or frameworks, all of which resolve into multiple steps depending on the situation.
Skilled negotiators draw on appropriate tools to ensure that they can devise strategies to improve the chances of creating and claiming value.
Good planning is “end to end”, encompassing the pre-negotiation, opening and clarification as well as closure and post-negotiation phases.

Summary

Regardless of the ambiguity inherent in discussion about planning, strategizing or preparing to negotiate, the overwhelming consensus is that nobody should enter into a negotiation without carefully analyzing the situation, establishing goals and making some determination as to the approach that should be taken to achieve those goals.