Negotiation Strategy (1/4)

Negotiation Strategy

In this module, you will have an overview of negotiation strategy.

You will be able to understand why negotiation is so important. It introduces the three dimensions of any negotiation: People, Problem and Process. You will explore two fundamental tool of the negotiator: active listening, and effective speaking. Last, you will become acquainted with a list of counterproductive assumptions about negotiation.

In this introduction, I would like to prompt you reflection on an important issue, why did you decide to follow a mooc on negotiation. Why add this to your agenda, which must be pretty busy already?

I mean, you could attend other courses or read a book or discuss with friends or enjoy the nice sun out there or sleep or do whatever more pleasant you can think of. So there must be some reasons why you are here watching this video.

Please take a couple of minutes and write down the reasons, which brought you enroll in this MOOC. Welcome back. Here are the top three reasons why people decide to follow a MOOC or a classic course on negotiation is everywhere. Is 360 degree. Take a pause again and think. With whom have negotiated so far? Or will you be negotiating with in the future? Make a list. Ready? That list is probably very long. Suppliers, Customers, Colleagues, partners Or kids, if any, your boos, etc.

Now, let me highlight three distinctions within that list. Negotiation occurs in difference spheres when negotiation our private life, at home or in daily activities, for instance, with your bank. We will also negotiate, of course, within a company organization. These are internal negotiations.

We negotiate on behalf of our company with other organizations such as a supplier. These are external negotiations. In this mooc, you will be find tools which have proved useful in all of these three series. Next distinction. Negotiations can be formal or informal.

When you meet with a customer’s lawyer to discuss a contract. Or when manager meets with trade union representatives, everyboby knows it is a negotiation, it is explicit, rules of proceeding are important.

But when you meet with colleagues around the coffee, to discuss the marketing strategy for a new product, it is also a negotiation, although an implicit one, everyboby has in mind their own preferences or constraints. Again, in this MOOC, I will address both implicit or informal and explicit or formal negotiations. Last, maybe some of you wrote down, I negotiate with my boss. Or I have to negotiate with the people I manage.

In this vertical relationship, the new ingredient changes the negotiation dynamic, and that is the

Hierarchical authority. Does it end the negotiation? No. You’re still in a capacity to influence the decision making of you boos or  you still have to convince your team that something has to be done. How to better influence, how to better convince will also be addressed in this MOOC. So that was reasons one. Negotiation is everywhere. Reason two pretty straightforward but worth mentioning anyway. Good negotiation helps make different. I mean do we all agree that whether we negotiate in a great way or in a mediocre way the end result is not the same? We get the contract or we don’t. The margin is thick or thin.

We prevent the conflict or we fuel the dispute, etc. And the third reason is also worth highlighting. Good negotiation can be learnt. That is also good news. Of course, personal soft skills help negotiate and some of us might be more gifted than others with these qualities.

Nevertheless, once we realized that these soft skills help, we can work on them and improve. Besides, effective negotiation is based on principles, tools, tips, methods, which help you make a difference. And this move will address both soft skills and proven process tools.

Now, if any of you think that negotiation is very rare, does not make much difference and cannot be learnt anyway, well then, you’re watching the wrong thing. Buy if you agree that these three points make sense, then stay tuned. Enroll in this MOOC, and you’ll rapidly see the difference. Enjoy.

NEGOCIATION DIMENSIONS AND STRATEGIC DILEMMAS

THREE DIMENSIONS ANY NEGOTIATIONS

In this video, I would like to introduce the fact that any negotiation includes three different dimensions. Most negotiators will focus on one of them only thus underestimating or even ignoring the other two dimensions, and that is the beginning of trouble. Now, let me these illustrate these three dimensions with a simple, daily examples. Have you got kids? Some of you probably have. Well, my wife and I try and take care of two kids, two growing kids to the extent that one of them is now a teenager. And guess what? At some point, you have to deal with the following tough negotiation. Your teenager has been invited to a party this Saturday evening. What time should he come back home? That is the problem to be addressed. And this problem can be dealt with in a very simple, rational way. Is your son coming back on his own or together with a friend? What time is the bus he's supposed to get home? Has he already doing his homework or will he have to do this on Sunday, etc. And even how many hours of sleep does the World Health Organization recommend for a teenager of his age? So this is the problem dimension, it relates to the substance of a negotiation, which apparently can be dealt with in a cold-tempered, rational way. But here, this negotiation involves your teenager with whom the relationship has been for weeks under stress, because of issues totally unrelated with the matter at stake. For example, he lost his skis or it looks like a storm went through his room. 

And there is, obviously, a relationship aspect, which is going to change the way the negotiation is likely to happen. That relates to the people dimension, it's different from the problem dimension. At the workplace, you've probably already realized that a simple issue handled by two coworkers will hate each other is likely to rapidly become a huge disaster. On the contrary, a big issue handled by two colleagues with a high level of mutual trust is likely to be settled smoothly. Now, back to our family example, imagine now that your teenager raises the issue at the wrong moment of the week. You are just back home exhausted at the end of a difficult, painful day. Conversely, he might be wise enough or simply lucky enough to raise the issue at the right moment. You are so happy with this nice Chardonnay wine bottle you've just opened to celebrate something. Now obviously, a simple variable when does the negotiation take place will change the dynamic of the whole discussion. This issue timing relates to a third dimension different from the previous ones and that is process. 

By process, we means things such as how is the negotiation organized, how is the agenda built, how do we proceed according to which rules? How do we process information exchange across the table, etc. 

In a nutshell, there are indeed three dimensions in any negotiation. People : who is involved in a negotiation, Problem : what is at stake and process : how do you proceed. These three dimensions are always there, they're separate but interconnected. And most negotiators focus on the problem dimension only. As a result, they do not see difficulties likely to appear on the people dimension and on the process dimension. 

Later in the MOOC, you will see how everything boils down to these three dimensions. And they provide a nice tool to analyze negotiations from simple daily situations to the greatest possible negotiations. For instance, in an upcoming video, I will talk to you about the COP21 multilateral negotiations on climate change. People, problem, process. The three dimensions were, of course, present in this major negotiation which took place in Paris, in December 2015. Once you've finished this video, pause for a few minutes and think of a specific negotiation. Try and distinguish the three dimensions, people, problem, process. As you will see, each of these dimensions includes a specific dilemma or tension, and that will be the topic of my next video. 

THREE STRATEGIC TENSION

In the previous video, I introduced the fact that any negotiation includes three different dimensions. People, problem and process. 

In each of these dimensions, there is a classic dilemma or strategic tension. Basically, you need to take care of two elements which are rather at opposites. For instance, you need to listen and to speak. But, of course, you cannot do both at the same time. To properly handle these tensions, the first step is to be aware of them. On the people dimension, the tension is between assertiveness and empathy. As a negotiator, I must assert myself. I need to speak efficiently in order to convey my message across the table. Assertiveness will help me clarify my intentions and diminish any misunderstanding. But I also need to listen to the other in order to understand his or her concerns, priorities and constraints. To understand doesn't necesarily mean to agree. But this empathy will usually have a positive effect on the relationship. It will also help me understand my impact on the other negotiator. Good negotiators indeed anticipate things to acute empathy. If what I'm about to say is likely to trigger the wrong reaction across the table, I better try and say things differently. That is why empathy should come first. 

Paying attention to the other and understanding his or her rationale will help me fine tune my argumentation in order to be more convincing. 

In the next video, I will discuss listening and speaking in negotiations in greater details. 

Now on the problem dimension. The tension is between cooperation and competition. These are two opposing strategies, as Nash showed in 1950. But negotiators need both of them. Through cooperation with the other side of the table, both negotiators will create value. Together, we create joined gangs, we enlarge the size of the pie. Now through competition, each negotiator tries and secures a better share of this value for himself. We compete one against the other in order to decide who will get which share of the pie. 

And this creates the negotiator's dilemma, as Zartman put it. The more competitive or the tougher a negotiator is, the greater the probability to get the better share. But the lesser the probability to strike a deal at all. Because the other is unlikely to accept a poor deal. 

Now on the contrary, the more cooperative or the softer a negotiator is, the greater the probability to get a deal. But the lesser the probability to get the fair share. Because the other is likely to take advantage of this. 

The way out of the dilemma is to work along a sequence. 

First, cooperate with the other in order to help create value while insisting on the principle of reciprocity. I'm happy to make efforts as long I'm not the only one around the table. 

Second, compete against the other in order to secure a fair share while thinking long term. Do not break the relationship with the other side of the table. 

I will go into greater details about these notions of value creation and value claiming in the second module of this MOOC. 

Last, there is a usual tension on the process dimension, too. 

Most negotiations are structured the following way. The negotiator is sent to the table by someone who is the real decision maker. 

We say that the agent negotiates on behalf of the principal. For instance, a lawyer negotiates on behalf of his client. A CEO negotiates on behalf of her board. As a result, most negotiations will go through a three step sequence. First, internally, setting the instructions given by the principal to the agent. Second, at the table, the negotiation between the two agents. Third, reporting back to the principal. And that process creates a tension. 

The more the negotiator sticks to the instructions he was given, the smaller the probability is to reach a deal. 

On the contrary, the more the negotiator shows flexibility on the mandate he was given, the more likely he is to reach a deal, and then to be in trouble with his boss. 

I will discuss this principal/agent relationship in greater details in the third lecture of module three. 

COMUNICATION IN NEGOTIATION

Communication and Active Listening

Successful negotiation is a lot about smart communication. The way both the negotiators exchange information should help them establish a working relationship. 

It should also help them understand each other’s expectations and motivations and diminish the risk of misunderstanding. That is why proficient communication skills are a driving force behind effective negotiation. However, effective communication proves pretty complicated. One negotiator might select the wrong information to convey across the table. Besides, the sender is usually convinced that his message is perfectly clear for the other side of the table, which is not necessarily the case. The recipient might perceive this information the wrong way, and be convinced that his interpretation is the only correct understanding. Thus widening the gap between the intentions and the impact on both sides of the table. 

In addition, several cognitive biases might further hinder the communication process. Let me name just a few of these biases, demonstrated by social psychology research. 

The selective perception bias means that the recipient tends to consider only those elements, which corroborate her initial judgement. 

Through the projection bias, a negotiator imposes his interest, or feelings, upon another, as if they were his own. 

Last but not least, over confidence will lead many negotiators to overlook or even ignore critical elements which have been, nevertheless, communicated to them by the speaker. As a result, do take communication seriously. 

As well see later, communication will be one item to look at carefully when preparing for the negotiation. Now for the time being let me highlight that communication cannot be a one-way street, it must take the form of a dialogue. 

And this requires two fundamental skills, listening and speaking. 

As far as listening is concerned, well there is listening and listening. Here are a few listening modes which are totally counterproductive. 

Obstructive listening, arms crossed, firm professional expression, staring at the other, now, this listening mode will not help you build a relationship. It will not encourage the other to share more information with you. 

Distracted listening is also to be avoided. Fidgeting with your phone, looking elsewhere, simply looking at your watch as soon as the other starts speaking, that's wrong, of course. 

Reactive listening, as soon as the others start saying something, the reactive listener interrupts, objects, contradicts, wrong gain. 

Directive listening is another mode to be avoided. The listener interrupts the speaker, not to oppose her, but to ask her questions in order to lead the conversation in a specific direction and that also tends to be counterproductive. 

Good negotiators stay away from this listening modes. Rather they turn to active listening. Now, here are some features of what we mean by this productive listening mode. Listen with visible signs of attention such as eye contact and nodding, now of course, do not overdo it. Suspend your internal judgement, and resist the temptation to interrupt and object, your turn will come later. 

Pay attention to what is said but also to what is unsaid. The tone of the voice, for example, take a few notes if necessary unless strict confidentiality is an issue. Reformulate from time to time the key statements of the speaker but, please do not turn into a parrot repeating, if I understand you correctly you said, bla bla bla. Invite the speaker to correct if you got something wrong. 

Ask open and clarifying questions, avoid loaded questions which convey the wrong signal. 

Now one last point, while listening, keep in mind this golden distinction, understanding doesn't mean agreeing. 

As a negotiator, you need to understand the other and it helps to demonstrate that you understand what the other means but that does not imply that your viewpoint is the same. 

Your own viewpoint, you will explain through active speaking when it is your turn to take the floor. And that will be the topic of my next video. 

COMUNICATION AND ACTIVE SPEAKING

In negotiation, words matter. The right words crafted the right way, at the right moment. Will help you bring your message effectively across the table. The negotiator must be an active speaker, just as he or she is an active listener. And we've known that for thousands of years, actually. Let's remember the three levers of classical rhetoric as analyzed by Aristotle. Reason, passions or emotions and style. The speaker must develop a solid reasoning in order to convince the other. But he should also build on the right emotions in order to persuade the other. And he should choose the pertinent style in order to please the other. 

Now building on this classical result of rhetoric, lets look at 10 features of active speech that modern negotiators should keep in mind. 

First, active speaking is directed towards a specific audience on which it is entirely focused. Do not attempt to speak actively to someone while doing something else at the same time, even on the phone, your interlocutor will hear that you're also watching something on your screen. 

Second, active speech is adapted to this audience, talented negotiators do not address different audiences in the same way, always showing equal respect to whoever is in front of them. They try to get in tune with the other side. Be they a senior sales servant or junior sales manager. 

Third, active speech is always as concise as possible. Brevity is quality. Keep it simple. Do not overflow the other with a long boring speech. Forth, active speech is precise and clear. Ambiguity usually leads to the wrong interpretation on the other side of the table. The British diplomat once advised me, never ever be ambiguous, unless of course you want to be. It is only when you know why you should build a constructive ambiguity that you should do so. Feature number five is this, active speech should be iterative. Avoid position responses such as yes/but, try yes and there's also this to be considered. 

Instead of separating both sides of the table, you versus I, try and show you consider that you're in the same boat, we, have to consider this. Number six, active speech relies a lot on suggestions. It is better to suggest and to propose than to impose. What if we did that? 

If the other negotiator discovers our solution by herself, we reduce the risk that she will reject it. The seventh feature is also crucial. Active speech seeks positive framing. Several social psychology experiments mainly those of Kreisky and Cayman have demonstrated that people are attracted by positive formulations and tend to reject negative ones. Even though both formulations, positive, negative, amount to exactly the same reality. 

In the same vein, feature number eight, active speech focuses on opportunities to be seized, rather than risks to be avoided or challenges to be overcome. 

Last but one feature, active speech is orientated towards the future instead of focusing on what happened in the past. The past cannot be changed. What can be shaped is the future. And that is being decided now. 

Now let me insist on the last feature of active speech. Avoid lying. There are four reasons why a negotiator should not lie. First of all, because it is unethical. And all of us have to decide which ethical standard we want to live with. 

Second, lying is a classic example of a pitfall. I will bring you attention to in the next video. Underestimating the other side of the table. If you lie to someone, you underestimate their level of information. You also underestimate their capacity to check what you're saying, and if you get caught, consequences are massively negative. The deal is over, the relationship is broken, your reputation is in shambles. Third reason, do not lie because they could believe you. What if you pretend that you have a great plan b in order to put pressure on them, and then they reply, well, okay then we are leaving the table. 

Bluffing will lead you to commitments you cannot deliver. 

And the last reason why you should avoid lying is because there're all the tools which can help you as a negotiator and which won't backfire such as getting properly prepared. And this will be the topic of the series of videos in module number two. 

WRONG ASSUMPTIONS IN THE NEGOTIATIONS

BEWARE OF INSTINTIVE PITFALLS

Hello. One safe way to make progress as a negotiator is to be aware of commonplace and typically wrong assumptions about what negotiation is about. Analyzing negotiations and debriefing many negotiators has helped us investigate these counter productive assumptions. We call them pitfalls. In this video I will like to highlight some of them so that you can keep them at a safe distance. 

First and foremost the typically wrong assumption is that in negotiation, there would be nothing to learn and therefore, nothing is ever learnt. Even at high level, executives tend to rely on old routines and they do not question how they've run the negotiation in order to take some lessons learnt. I advise you to take exactly the opposite view. See any important negotiation as a learning opportunity. That means that in the aftermath of a negotiation, you should take some time to analyze how you did. This post-mortem analysis is two-fold. On the one hand, what went well and why? This will help you decide whether you've been good or whether you've been just lucky, and this will help you identify your strong points on which you can rely safely in your next negotiation. On the other hand, what went wrong and why? Do not fall into the usual blame game. Well, the negotiation failed because the other didn't understand how excellent we are. 

Now, this will help you identify your weaker points on which you'd better improve before the next negotiation. Now, depending on the importance of the negotiation, reflect on these two simple questions. It will take either a few minutes or will require a few hours and you can do this on your own but also with colleagues. Do this in an informal manner and you can be also excellent for teambuilding. 

I strongly advise you to open on your laptop a document with a password in which negotiation after negotiation, you will conduct this personal analysis. That is the best way you can keep on improving all your life as a negotiator. You will enter into a virtuous circle. Your analysis will help you focus on the right issues in your next preparation. Thus, helping you achieve better results in the negotiation to be further analyzed. Now another popular and wrong assumption is the natural tendency we all have to underestimate the other side of the table. 

Well, it's way safer to take the opposite view. Your counterpart has been selected by his or her organization precisely because he or she is able and competent. So, do not rush to the usual pleasant conclusions such as, well, if they don’t understand it's because they're stupid. It might be because you are not cleared off. Or if it gets tense and nervous, it's because they do not control their nerves. No, might be because you do not control yours and you tend to be abrasive. 

The third equally wrong assumption is to believe that negotiation is only and always pure competition. Objective is to win against the other. Well, the problem is that nobody likes being beaten by the other side. In here, let me highlight a big difference between negotiation and high level tennis for instance. In a tennis match, say in the 2016 final of the Roland Garros tournament in Paris. When Andy Murray realized that he was about to lose the match, he could not tell Djokovic. Well actually, you know what, I'm leaving the tennis court right now and maybe we'll meet next year for another try. He had no choice but to lose. 

Negotiation is different. Decide who is under the impression that the deal is not going to be good enough. Is able to leave the table and say no deal. I'm not losing and you're not winning. You see, together with my team we've done business in over 75 countries of the world. We've never yet encountered the bizarre tribe of people who will be happy to lose so that you can win. 

It might be naive to think that win-win approaches are always possible but it is certainly very naive even infantile to expect that the other will accept to lose so that you can win. 

The next wrong assumption will help you address the former. Many people believe that negotiation is only and always about concession-making. They believe that it can only be a zero sum game. What he wins, I must lose and vice-versa. 

That reality is different. As we'll discuss later in this MOOC, negotiation can help you create value. What I need I'm not always obliged to take it from the other. I can create it with the support of the other. And the other will accept to help me on this point because she knows that I will help her do the same on another matter by way of reciprocity. 

That is why we need also to avoid another pitfall. To believe that there is always only one solution and of course it's mine. No, the game usually more open. We need to refrain from judging too early what's good and what's not. Creativity matters in negotiation. 

The next pitfall is unfortunately a very commonplace. A sharp preference for short term at the expense of longer term opportunities. Here, negotiators need to distinguish two cases. One the one hand the so called one-shot negotiation, a simple transaction where nobody really cares about continuing the relationship in the future. 

And on the other hand the normal business situation where the longer term matters enormously. 

When we have acquired a new customer, we want to keep him on the long term. When we have identified a reliable supplier, we want to secure her on the long term. Same thing with any business partner. So most negotiations have a long term horizon packed with opportunities which should not be lost because of short term temptations. 

One more pitfall, well, to believe that business is business and therefore, it's worth behaving like a bully in a negotiation. Well no, not simply because it's impolite and unethical but also because it doesn't work so well. There's a fascinating field of research on so-called procedural justice. And basically results point at the following conclusion. 

For a given proposal people tend to accept it better if the proposal stands out of a process in which they felt respected, had a say, could voice their concerns, etc. On the contrary, the very same proposal stemming for a process they felt uncomfortable with, they will tend to reject it. So, there is a premium for negotiators who managed the process in the way which is respectful of people. 

And the last pitfall is something we called negomania. Some people believe that everything is negotiable. Well, precisely, no. And good negotiators know how to draw the line between what's negotiable and what is not. This will be one objective of the preparation of negotiation. And that is the topic of the next module of this MOOC. For the time being, if you want to know more about this instinctive pitfalls and wrong assumptions, you may want to read chapter one of our book, The First Move, good luck.