Steve Hay

Overview of the Five Phases of Negotiation

You’re now ready to learn about the types of activities that go on in all negotiations. Before we cover in depth the behavior in any one part of commercial negotiation, we’ll break down the process into five overall phases, as shown in Figure 4-1.

Negotiating for a Super-Win

We explained earlier that the RDC philosophy is centered on business ethics and a principled approach to negotiation that seeks to maximize the value of the outcomes for both parties. We have described how to build trust so that the parties can be honest about their underlying interests and seek a “win-win” resolution. Rather than locking the parties into a set of confrontational stances, this principled approach to negotiation avoids a personalized joust. It seeks a fair deal for both parties but one that they can both be motivated toward because it maximizes their own payoff. This approach can be extended to create additional value above and beyond the value that either of the parties involved in the negotiation could find in isolation—what has been called a “super-win.” We have also cautioned that negotiation involves compromise and therefore should be avoided if possible in preference to straightforward buying and selling. It’s now time to dig a bit deeper into these concepts and find a way of expressing the ideas so the relationship between them is clearer. Figure 8-1 shows the negotiation “bow tie” that can be used to plot the relationship between the horizontal scale, which shows the value rising from left to right, and the vertical scale, which simply indicates how the total value of the deal is shared between the parties.

The RDC Ten-Point Plan

There are two equally valid ways for you to read this chapter. First, you will want to read it for the first time, out of general interest, to become familiar with the concepts involved in planning a negotiation and to pick up the tips we offer on how to approach the topic. Second, once you have read the whole book and you are preparing for a real negotiation, you will want to read this chapter again as a practical step-by-step guide to completing a real ten-point plan of your own.

Ten Golden Rules for Successful Negotiation

The guidelines covered in this chapter identify the techniques available to control and influence events to your own advantage. They also provide a good defense against aggressive negotiators, thereby producing better agreements with fewer expensive concessions. Everyone feels they know how to negotiate, just as everyone knows how to kick a soccer ball. But try explaining the off-side rule in soccer to a beginner and compare that with understanding the subtleties of defensive negotiation. It is then that the need for clear rules becomes more important. We’ll start by simply listing the ten golden rules, and then we’ll explain each one in turn.

The Physical Arrangements

The facilities where any negotiation is to take place can be very important. If you are not in control of the facilities, be aware that they may be manipulated to the advantage of the other party. On the other hand, experienced negotiators know that the other party will be much more likely to agree to a proposal if they feel relaxed in the comfort zone of their home territory. If you travel to the other party’s office, they are more likely to feel comfortable and receptive to your negotiation proposal. Furthermore, if at any time they need to consult with their staff or specialist advisors or if they need access to information or other resources during the negotiation, then they can do this more easily at their own base. One final advantage may be that if you need to use the high-risk close of an ultimatum, then you can always walk out of their office; this is a ploy that is much more difficult if you are in your office and they are the guests.

Diplomatic Negotiation Perspective

The diplomatic services of some countries have a working definition of diplomacy that excludes the word negotiation because they don’t like the connotations of that term. They feel that, at worst, the role of a negotiator is to bamboozle the enemy at their front door while your military forces kick down their back door! They see the purpose of practical diplomacy as being to clean up the mess that nations all too often get themselves into by trying to deceive one another and impose a “win-lose” result in so-called negotiations. This resonates with the ethos we have discussed throughout this book, where the objective of principled negotiation is a “win-win” that aims to ensure that all parties to the negotiation realize they have achieved the best possible results. This approach seeks to create additional value above and beyond the value that either of the parties involved in the negotiation could find in isolation. In comparing the functions of diplomatic and commercial negotiation, it is interesting to note that individual businesses could not effectively conduct commercial negotiations without the global infrastructure that is constantly updated and maintained by diplomatic negotiations. At one end of the scale, that infrastructure seeks to avoid war, while at the other end of the scale it paves the way for international law, contracts, finance, transport, and profit. But there is also a negative dimension. Countries can decide to ban trade of certain types such as military and strategic technology. They can choose to impose sanctions on other states, perhaps restricting credit, transport, and other infrastructure facilities. They can set prohibitive trade tariffs and quotas on certain classes of goods. So, in many ways, commercial negotiations can be successful only under the facilitating umbrella of diplomatic negotiation.

Negotiation Influence Behaviors

Table 18-1 summarizes and paraphrases the ten categories of influence behavior, based on the 2002 article “Influencing in Hostage Negotiations: The Table of Ten” by Ellen Giebels.

Cross-Cultural Issues in Negotiation

Over the past three decades we have witnessed a gradual increase in what could be called cross-cultural negotiation. As our clients increasingly acquire resources and services from the global market and sell to other businesses across the world, there is a need for a negotiation model that can bridge those diverse cultures. Everything so far in this book has been as culturally neutral as possible, and our negotiation techniques are applicable across a wide range of locations. We will now deal with some specific considerations that you should build into your planning when negotiating with people from cultures you may not have dealt with before. In doing this, we run the risk of making generalizations and discussing stereotypes that may be unfair and inaccurate. However, be assured that we intend no insult to any culture or tradition whatsoever.

Our Four Negotiation Mantras

Our clients frequently ask us how best to recognize when the other party is prepared for negotiation. Sometimes, one party can begin a negotiation without the other party feeling that a negotiation has started. Our clients often ask how to distinguish between simply building initial rapport and the more substantial phases of negotiation, how they can be sure they should continue to negotiate, and how to know when it’s time to reach a conclusion. To answer these questions, RDC has four negotiation mantras that are worth chanting to yourself, as shown in Figure 3-1.

Strategies for Resolving Conflict

Of course, negotiation isn’t the only way to resolve conflict. There are five options that we can use to resolve conflict, as follows: