Negotiating to Build Partnerships

AASHTO Standing Committee on Quality

Daniel Fodera, FHWA Georgia Division

Overview

What is BATNA and why is it important How do you clarify your interests and develop a BATNA How to think about the other party's interests and BATNA Some common negotiation traps.

What is Negotiating?

The process of reaching a mutually acceptable agreement.

Issues, Positions, and Interests

Definitions

Issues are concerns that will be on the table for explicit agreement during the negotiation Positions are the parties stands on the issues Interests are the underlying concerns that would be affected by the negotiation outcome. Interests can include price, relationships, strategic goal implementation, reputation, etc
Incompatible Positions, arent necessarily Incompatible interests Interest-driven bargaining leads to greater value creation and provide more opportunities for mutually satisfactory deals than position-driven bargaining. Common ground can help, but different interests can open unexpected opportunities Differences may come in forms other than interests risk tolerance, strategies, etc

Positions Vs Interests

Identify Differences to create value

Issues, Positions and Interests

Job offer example:

An issue is base salary. A position is your desired minimum salary. The interests underlying your position may include your need for a good incomebut may also include status, benefits, new opportunities, and other needs that might be met in ways other than salary.

Positions and interests aren't necessarily identical, interests often include needs in addition to price. Interest-driven bargainers see negotiation as the process of reconciling underlying interests. When positions are incompatible, dont assume that our interests must also be incompatible. If you think "zero-sum"one party's gain must necessarily be the other party's loss. Bargainers miss out on creating potential, unanticipated value.

Clarifying Interests

Issues, Positions and Interests

Identify possible issues, positions, and interests in the following negotiations

Outdoor advertising? Proprietary specs on reflective sign sheeting? Public involvement on a single project? Joint Strategic goals Safety? Process Review Recommendations Implementation? Performance Measures Public or not?

Part One: Identifying your Interests and Speculating about the other partys

Describe a negotiation youre facing in the future Describe the issues, your position, and your interests Speculate about the other partys possible issues, positions, and interests

Clarifying Interests

Leveraging Differences

1.

2.
3.

(Be alert to new possibilities for creating value) Compare interests list differing interests Identify additional differences Brainstorm ideas for a deal

Clarifying Interests

Improving Your Negotiating Skills

Continually assess your own and the other partys interests before, during, and at the end of a negotiation.

Without a refined sense of one's own objectives and trade-offs, it is difficult to formulate a strategy or judge its success.

Avoid position driven bargaining phrases like, "So, what's your position?" or "Here's my position." Probe beyond the other partys positions by asking "Why?", "Why not?", and "How could this idea be improved?", "What would this idea accomplish for you?" You may discover new interests that you were not already aware of. Research the other side's concerns, ask questions, and listen carefully. Not just during negotiations, but during any important conversation with another party.

Clarifying Interests

BATNA

Best Alternative To a Negotiated Agreement.

What you would most prefer to do if you and the other party are not able to reach a deal.

Importance of BATNA:

Help you make smarter choices because they remove the pressure to reach an agreement. Give you more bargaining power because they help you quickly identify how a proposed deal stacks up against your alternatives

Understanding and Developing BATNAs

BATNA
Developing a BATNA

Brainstorm possible alternatives to a negotiation. Weigh your underlying interests for each of the alternatives that you propose cost, time constraints, relationships, etc. Determine which alternative is your best alternative. Consider what the other party's BATNA might be and what value the other party places on it. Don't fall into the trap of deciding how the other party should see it versus how he or she really views it.

Speculating About the Other Party's BATNA

Understanding and Developing BATNAs

Identify your own BATNA

1. Describe a negotiation youre facing in the future 2. Ask yourself What will I do if this agreement cannot be reached?
List Alternatives

3. 4. 5. 6.

Outline the interests that the alternatives meet or dont meet. Consider ease, process, time pressure, relationships, risks What else could you do to improve your analysis? Are the alternatives practical and actionable? Could they be improved? Which one is best? The highest value alternative is your BATNA

Understanding and Developing BATNAs

Speculate on the other partys BATNA

1. 2. 3. 4. 5. 6. Speculate what the other party will do if this agreement cannot be reached
List Alternatives

Speculate about the interests that the alternatives meet or dont meet. Consider ease, process, time pressure, relationships, risks What else could you do to improve your analysis? What can you do to better understand the others environment? Bias check have you fairly imagined the other partys options? Which one seems best? The highest value alternative is the other partys BATNA. What questions can you ask during negotiation to uncover the other partys interests? List them

Youre ready to begin your negotiation. Remember a BATNA is the standard against which any proposed agreement must be measured.
Understanding and Developing BATNAs

Determining BATNA
Describe the negotiation you're facing Clarify your interests

Compare each alternative to your interests

Your Position Your Interests

Issue

Speculate about the other party's interests

Answer the question "What interests does this alternative meet?"

Answer the question "What interests does this alternative not meet?"

Issue

Their Position

Their Interests

Compare interests and identify additional interests

Gather information to assess alternatives

Yes

Can you gather more information to improve your analysis?

Brainstorm Ideas for a deal

No
Answer the question "What will I do if an agreement cannot be reached?"

Repeat to find your negotiating partner's BATNA

Refine alternatives so they are practical and actionable

Yes

Are there any other answers (alternatives)?

This is your BATNA

Select the BEST alternative

No

Examples of BATNA

What do you get if you walk away from the deal?

Another day at another car dealer Keep the existing job

Common Negotiation Traps

Failing to identify your interests

Avoid this trap by clarifying your full range of interests. In addition to price, consider other interests, such as: maintaining a positive working relationship; focusing on the "spirit of the deal" (how the agreement will work in practice); and ensuring that the negotiation process is perceived as fair and respectful by both sides. Avoid this trap by developing a BATNAyour best alternative to a negotiated agreement. Determine what you would do if an agreement cannot be reached.
Avoid this trap by viewing the negotiation from the other party's perspective. Speculate about their underlying interests and BATNA. Compare your interests with those of the other party and look for opportunities for mutual gain. Avoid this trap by searching for differences in interests that can suggest new options for mutually beneficial deals.

Neglecting your BATNA

Ignoring the other side's problem

Overlooking differences

Tool: Avoiding Common Negotiation Traps

Common Negotiation Traps

Introducing biases

Avoid this trap by not letting cognitive biases such as role bias (over committing to your own point of view) and partisan perceptions (painting your side with positive qualities while vilifying your "opponent") enter into a negotiation.
Avoid this trap by keeping issues surrounding the deal (such as price and service levels) and the relationship (such as mutual understanding and respect) separate. When you and the other side don't feel that you need to trade the quality of the relationship for the terms of the deal, you exchange information more freely and become more creative and collaborative in your discussions. Avoid this trap by keeping a constructive dialogue going. When negotiations stall, solicit the other party's ideas and perspectives on an issue and express your appreciation of what the other party brings to the table. Avoid this trap by clarifying expectations about how your negotiation will be implemented. Determine how you and the other party will work together, resolve disputes, communicate, and handle surprises, before the ink has dried on the contract.

Confusing the deal and the relationship

Failing to make appreciative moves

Ignoring the spirit of the deal

Tool: Avoiding Common Negotiation Traps

Summary

Issues are on the table for explicit agreement. Positions are one party's stands on the issues. Interests are the underlying concerns that would be affected by the negotiation's outcome Common ground can help, but different interests can open unexpected opportunities Best Alternative To a Negotiated Agreement. What you would most prefer to do if you and the other party are not able to reach a deal. To develop a BATNA, you should: Brainstorm and evaluate alternatives to a negotiation Determine which alternative is your best alternative. Speculate About the Other Party's BATNA