Tactics, deal design, and set-up are three crucial components of the most effective negotiations. Yet many negotiators focus only on the tactical part, running the risk of undermining their own best interests. How can you negotiate more skillfully and confidently with clients, partners, and adversaries as well as with colleagues within your organization?
In this Q&A, James Sebenius and David Lax, authors of 3-D Negotiation: Powerful Tools to Change the Game in Your Most Important Deals, discuss the common mistakes of negotiators, the power of a three-dimensional approach, why negotiating is an essential skill, and where the science of negotiations training is headed.
Negotiation is a core competence for life, "not merely an important skill to be wheeled out for special occasions," they argue.
Martha Lagace: 3-D Negotiation presents a multi-dimensional approach for people who thought negotiations training was only about what happens at the bargaining table. What common mistakes do you see and what typical assumptions about negotiations training are you challenging?
James Sebenius and David Lax: Even experienced negotiators make mistakes in all three dimensions. Let us start with the least familiar kind of mistake. Flaws in our third dimension, the set-up of a negotiations training, can take many forms: wrong parties, wrong issues, wrong walkaways, wrong sequence, wrong basic process choices. Here's one common set-up error (among many): It is easy to make one kind of mistake in your choice of negotiations training agents. You know the importance of using a skilled and knowledgeable negotiations training agent as well as crafting a contract that aligns your agent's incentives with your own. Yet a well-structured contract with your agent may not be enough.
For example, top executive pay attorney Joe Bachelder once took his client aside after the first negotiating session. The board had selected his client to be its next CEO and was working out his compensation package. Bachelder informed his client that he would end up with everything he wanted from the negotiation. Why was Bachelder so confident of total victory? Because, he explained, the board had put the firm's well-regarded general counsel in charge of the negotiations training. Why was this a mistake? It was not an issue of effectiveness: The general counsel was undoubtedly a skilled negotiator. Yet, as Bachelder happily informed his client, "When this is over, you're going to be that guy's boss. He knows that. He can't fight you too hard on anything."
In retrospect, the board made a simple set-up error; it got the parties wrong in this negotiations training. For its representative in these critical talks, the board should have hired an outside specialist, with properly aligned interests and incentives. More generally, you should look hard at a potential agent's other interests and relationships to determine whether he or she is part of the right negotiations training set-up.
Negotiators sometimes can discover hidden sources of negotiations training value and then craft agreements to unlock that value and overcome barriers created by poor deal design.