Vol. 67, No. 4 — July/August 1986 —
The Art of
Negotiation
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Humans have found a way to resolve
their differences without fighting. We do this constantly
at work and at home. But how do we go about negotiating effectively?
Here we examine the fundamentals, and offer some tried-and-true
advice...
Everybody negotiates - or at least everybody who is not
a babe in arms. As soon as they can talk, toddlers try to
get their way by making bargains. They will ask: "Can I stay
up after bedtime if I'm good?" Their parents may want a more
specific concession: "Okay, if you put your toys away." Thus
a classic negotiation is concluded - classic in that it meets
the wishes of all concerned.
From that age on, people proceed to negotiate their way
through life - with their parents, friends, mates, employers
or employees, business contacts and colleagues. Some become
professionals at it: not only diplomats and business agents,
but many lawyers and executives, and a multitude of people
in sales. Most of us remain amateur negotiators, but there
are times when we are all called upon to assume that role
when buying or selling things, dealing with marital or family
problems, asserting our rights, or seeking compensation. At
such times it helps to consider what negotiation is all about.
Fundamentally, it is a way of settling differences with
a minimum of strife. It is an exclusively human activity.
When the other creatures of the earth come into conflict,
they must either fight or run away. Our ability to communicate
ideas has given us another choice. We can use our jaws for
purposes other than to maim or threaten our adversaries. This
means that the physically weaker members of our species have
a chance to assert their interests on an even level with the
strong.
Negotiation, then, is the antithesis of the application
of force. It is a process of coming together in an agreement,
and agreement must be based on consent. But it is often mistaken
for precisely what it is not, mostly because of what we hear
- and therefore think - about it. The news tells us of diplomats
"winning" points or "giving away" concessions in arms or trade
negotiations. Management and union representatives sit down
to "fight it out" at the bargaining table.
Our perception of the negotiation process is clouded by
a cultural preoccupation with winning and losing. We live
in a society of gains and losses at work and at play. We see
our favourite sports teams attain victory or go down to defeat.
In business, we try to "beat" the competition. It is therefore
difficult for us to conceptualize a form of competition in
which it is possible for everyone to win.
This has partly to do with the arithmetic logic we learned
as children. If you have two marbles and one is taken away,
you are "down" one marble: you have lost it, in other words.
But that does not apply to all of life: for instance, you
cannot subtract an idea. If two persons exchange ideas, neither
has lost anything; both have added an idea to those they already
had.
If that seems confusing, so does the fact that negotiation
is both competitive and co-operative. In his book Fundamentals
of Negotiating (Hawthorn Books, New York, 1973) Gerard
I. Nierenberg, president of the Negotiation Institute, explains
how this can be so. He writes: "Competition that permits each
man to measure his competence or means against the other's
- and to be rewarded proportionally - is really a co-operative
achievement." Though the interests of the parties to a negotiation
are bound to differ, they should "always be on the alert to
convert divergent interests into channels of common desires."
In the real world, negotiations are often tough and nasty
because no thought is given in advance to what objectives
the "opposers" (this term is used by some negotiation consultants
because the word "opponents" suggests confrontation) may
have in common. People tend automatically to assume a
belligerent stance when they line up on sides.
It is natural enough to take sides at the start, but it
should be kept in mind that the purpose of all the talk is
to bring the parties around to the same side - that is, to
consent to an arrangement. If people refuse to move figuratively
around the table, they are left with the choice of the jungle:
to fight or run away.
The first objective is to make the
agreement stick
Sometimes what appears to be a negotiation is actually no
more than a bloodless fight in which the stronger party beats
the weaker into submission. One side is forced to make all
the meaningful sacrifices. Having done so, the loser has no
incentive to abide by the terms of the settlement. This means
that it cannot be expected to last in the long run.
History provides many examples of imposed settlements which
eventually backfired with disastrous effects. After World
War I, for instance, the Allied Powers exacted ruinous reparations
from Germany. Twenty years later the Germans attacked them
again under a leader who exploited their instinct for revenge.
The mistake made by the Allied diplomats is likely to crop
up in human relations of all kinds. They seized a short-term
advantage without regard to their own long-term best interests.
They ignored the basic fact of life which is at the core of
all negotiating strategy - that people can never get 100 per
cent of what they want.
The corollary is that people must give in order to receive.
This does not mean that one must give away the whole store
in a negotiation. But shrewd bargainers always ask themselves
what short-term advantages they can concede to meet their
long-term objectives. The very first objective must be to
arrive at a settlement that can be relied upon - one that
is satisfactory enough to the other party that he or she can
be expected to live with its terms.
But effective negotiation is more than a matter of straight
give and take. The swapping of advantages without reference
to the context in which it is done is likely to result in
an unsatisfactory quantitative splitting of differences. When
people think in terms of points to be gained or given away,
they are inclined to be possessive. They become overly concerned
with minimizing the things they will have to surrender.
By concentrating on what they stand to lose, they enter
into negotiation as if it were a debate in which their task
is to prove the rightness of their cause by outwitting or
overpowering the opposition. As consultant Fred E. Jandt
writes in his Win-Win Negotiating, {John Wiley & Sons,
Toronto, 1958} "Positional bargainers articulate certain
demands (their 'positions'), and they measure their success
in terms of those demands to which their opponents accede.
In positional bargaining, either I win or you win; either
the majority of your 'positions' prevail, or the majority
of mine do."
Demands are but symptoms of underlying
problems
This type of bargaining carries the danger that the position
itself may become more important than the ultimate objective.
The bargainers are apt to get stuck in the positions they
have staked out. The longer they defend them, the farther
away they are from the point where they can meet their opponents
in a mutually beneficial deal.
Negotiations frequently become bogged down on a single issue
which has little to do with a party's original aims. For example,
a union may refuse to sign a contract unless the management
reinstates some of its members who have been suspended for
refusing to follow instructions. Reinstatement becomes the
issue, instead of the package of pay and benefits the parties
set out to negotiate.
The alternative to positional bargaining is what the experts
call "interest bargaining," meaning that it takes into account
the full range of both parties' interests. This approach is
based on the rule that it is better to negotiate problems
than demands. When, in an industrial or international dispute,
a mediator is called in, the first thing he or she does is
examine the underlying problems.
Long before they reach the mediation stage, conegotiators
should examine their mutual problems together on the theory
that demands are merely symptoms of problems. The least such
an examination can accomplish is to establish the feeling
of being in the same boat.
Good negotiators listen a lot more
than they talk
If there is one theme that runs through the writings on
negotiating techniques, it is that what people want and what
they say they want are often different. "Practitioners
of interest bargaining," writes Jandt, "investigate the real
- as opposed to the stated - desires of opponents. [They]
then seek ways to satisfy their opponents' desires - by, among
other approaches, offering desiderata that they themselves
control in exchange for desiderata that their opponents control."{Desiderata
is defined as "things lacking but needed or desired."}
People may not be conscious themselves of their underlying
needs and desires when they first make their demands. Say
an employee asks for a transfer. It turns out that she does
not want to be transferred at all; she wants to be relieved
of having to telephone late-paying customers because she is
bashful. Her manager negotiates a compromise in which she
trades a certain duty with an employee in the same department
who is bored by that aspect of what he is doing. The manager
keeps a valuable worker, and everybody is satisfied all around.
To uncover what the hidden issues are, one obviously must
ask the right questions. The ability to draw out information
is among a good negotiator's most valuable skills. Professionals
in the field write down their questions in advance, sometimes
running them past a third party to ensure that nothing has
been forgotten. They also ensure that their questions are
phrased in such a way so as not to antagonize an opponent
or impugn his honesty. No matter how rude and aggressive an
opponent might be, you cannot go wrong by being polite and
composed.
Questioning serves no purpose, however, if one does not
pay attention to the answers. Since every word counts in a
negotiation, extraordinary efforts must be made to follow
and absorb exactly what is said. A skilful negotiator is a
skilful listener {See Royal Bank Letter, January 1979}. Much
of the confusion that arises in the course of bargaining is
the result of one party missing the meaning of the other's
words - usually because the first party's mind is occupied
rehearsing what he or she will say when his or her turn comes.
Successful negotiators generally do more listening than
talking. The only time when they may say more than their opposer
is when they periodically summarize what has occurred to keep
track of the concessions made and to confirm that it has all
been mutually understood. One of the most serious faults a
negotiator can have is talking too much. It can wreck one's
strategy by revealing intentions and feelings prematurely.
For example, a couple looking at a house to buy who enthuse
over its attractive features put themselves at a disadvantage
when they come to negotiate the price.
It is easier to change 'no' to 'yes'
than vice-versa
The most critical time to keep quiet is when there is nothing
more to be said. How many times have you been in an argument
which seemed to be settled, but which flared up again because
someone insisted on getting a final crushing word in? Often
the hardest part of a bargaining session comes in closing
it. One simple proven method is to say: "I think we know everything
we need to know to agree, don't you?"
Negotiation is not, of course, under the control of one
party. You too will be asked questions, and objections will
be raised to your case. It is advisable to prepare in advance
for the challenges you will encounter. Get a colleague or
your mate to cross-examine you, trying to anticipate every
possible question and objection. From this exercise you can
develop a list of the facts you will need on hand to support
your case. Thorough research is important. Incomplete or faulty
information can gravely detract from your bargaining power.
For many of us, the most difficult word in the language
is "no." A skilful negotiator must be prepared to say it frequently,
putting aside the desire to be agreeable so as to be liked.
You should always reply in the negative when you have the
slightest hesitation about what is being proposed. It is always
easier to change a "no" to a "yes" than the other way around.
Negative replies also help to give yourself time to think.
Usually when we come away dissatisfied with a deal, it is
because we have been pressured into a decision. Professional
negotiators call frequent recesses and request that difficult
points be bypassed so that they may deliberate them and come
to a decision later. They refuse to be rushed.
The prime rule is to negotiate patiently. This not only
protects your interests, but produces better long-term agreements.
In his book Give & Take {Thomas Y. Crowell, New York,
1974) Chester L. Karrass, director of the Center for Effective
Negotiating in Los Angeles, writes: "Patience gives an opponent
and his organization time to get used to the idea that what
they wish for must be reconciled with what they can get...
It gives [opposers] time to find out how best to benefit each
other. Before a negotiation begins it is not possible for
either to know the best way to resolve problems, issues and
risks. New alternatives are discovered as information is brought
to light."
A sure sign of less-than-sincere negotiating is revealed
when an opposer seems to be in too much of a hurry to close
a deal, attempting to impose an arbitrary deadline ("I can
only keep this for you till Thursday") or making a "final
offer." Assuming you really want what he has, what do
you do then?
Rather than being stampeded into terms, you should first
point out what he has to lose by coming to an impasse. In
his Power Negotiating {Addison-Wesley, Don Mills, 1980)
consultant John Illich recommends the" It's-a-shame-to" technique,
as in: "Look, we've resolved three out of the four most important
issues. It's a shame to make that much progress without
resolving the remaining issues . . . It's
a shame to give up without giving it a sincere try."
Illich writes that this tactic is designed to justify the
reason to keep negotiations alive without pleading, begging
or capitulating. Still, there is always a chance that the
person making a "final offer" means exactly what he or she
says. If so, the best course is to break off the talks; better
to fail than to be stuck with a bad bargain. In many cases,
though, it could be a bluff. If you stand your ground, you
will find that the final offer was not so final after all,
and the deadline was not as rigid as it was purported to be.
Leave the opposition a face-saving
way out
When calling a bluff, you should always think of a means
to allow your opposer to climb down gracefully. No matter
what the situation, from a marital disagreement to a billion-dollar
merger, negotiation is essentially an interaction among human
beings. Hence emotions are involved - specifically pride,
or "face," as the Orientals call it. If you back your opponent
into a corner with no face-saving way out, he or she has no
choice but to fight.
Although charity seemingly has no place in bargaining, a
little of it is sometimes necessary to allow others to preserve
their dignity. It is not the only old-fashioned virtue involved
in negotiating effectively. Tolerance and understanding both
have a part to play in this important arena of human relations.
These are civilized qualities, and they are all directed toward
the same eminently civilized end - to resolve the differences
that are bound to arise among human beings in an atmosphere
of peace.
Published by RBC Financial Group. All editions from the RBC
Letter collection are available on our web site at www.rbc.com/responsibility/letter.
Our e-mail address is: rbcletter@rbc.com.
Publié aussi en francais.
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