Now let's move to some errors in our most familiar first dimension, face-to-face tactics "at the table." Negotiators listen and communicate poorly, make cross-cultural gaffes, fail to respond effectively to hardball styles, and so on. One of the most common tactical errors arises when people become fixated on their bargaining "positions" rather than probing for the full set of underlying "interests," or what each side really cares about. Failure to uncover interests often leads to mistakes in our second dimension, deal design, such as treating potentially more cooperative agreements as pure price deals in which the negotiations interests of the parties are strictly opposed.
Consider an example of both kinds of mistakes from the U.S. Midwest. In this case, environmentalists and farmers opposed a power company's plans to build a dam. On the surface, the parties appeared to have deep, irreconcilable positions, which had resulted in a long stalemate. Yet a superior deal could be designed if the parties looked past their stubborn bargaining positions to their underlying negotiations skills training interests.
By stepping back and mapping the parties' real negotiations skills training interests, it emerged that the farmers were worried about reduced water flow below the dam, the environmentalists were focused on the downstream habitat of the endangered whooping crane, and the power company urgently needed new generating capacity and a greener image. After a costly legal impasse that threatened to last for years, the three groups designed a better deal that included a smaller dam built on a fast track, water-flow guarantees, downstream habitat protection, and a trust fund to enhance whooping crane habitats elsewhere.
Working solo or jointly at the drawing board, negotiators sometimes can discover hidden sources of negotiations skills training value and then craft agreements to unlock that value and overcome barriers created by poor deal design. Here are some questions to ask the next time your talks seem stalled for deal-related reasons:
Is price truly the only issue?
Can we unbundle different aspects of what looks like a single issue and give each side what it values mostat low cost to the other side? Are there other high-benefit, low-cost trades?
Should we add value-creating contingencies and risk-sharing provisions to the contract?
Can the contract cope not only with economic issues but also with the egos involved?
These are but a few of the many common negotiations skills training errors we see in practice.
Q: Your 3-D alternative draws on three dimensions: tactics, deal design, and set-up. In a nutshell, what do these elements mean individually and together? Should a negotiator weigh them equally, especially under time pressure?
A: Whether your focus should be on one or a combination of tactics at the table, deal design, or set-up moves away from the table depends directly on the nature of the negotiations skills training barriers that you face. When you have a potential deal in mind, we have developed a set of tools to quickly perform what we call a "3-D barriers audit" to determine what barriers stand between you and your desired agreement. While there are many specifics, the broad diagnostic negotiations skills training questions follow our three-dimensional scheme.
First, you should ask whether it is a tactical or people-related barrier like communication, trust, misperceptions, or the like. Second, you should ask whether the problem is deal-related: Does the proposed agreement offer sufficient value to the parties to be more attractive than no deal? Does it accomplish their objectives? Third, are there set-up problems such as wrong parties, interests, no-deal options, sequence, or basic process choices?
When talks stall, it's tempting to jump to conclusions: "It's purely a price gap." "They're being unreasonable." "We're not communicating well." "We're in a weak position." Instead of focusing on the first explanation that leaps to mind, you should critically diagnose the key barriers to the kind of agreement you have in mind; this will then allow you to devise the most promising approach to overcoming them. Without an accurate barriers assessment, the strategy and tactics you craft may address the wrong problems.
Imagine that a supplier is negotiating with an important but difficult client who adamantly refuses to budge on certain contract terms. Assuming that they face an interpersonal or tactical barrier, suppliers often seek negotiations skills training on the principles of persuasion, joint brainstorming, how to make advantageous initial offers, body language, and so on.
Yet apparent tactical or interpersonal barriers may actually be another type of problem. More broadly, the best response to a barrier in one dimension may be moves within other dimensions. As the purchasing agent calms down a bit, for example, he mentions that cash is very tight, "especially this quarter." Is this a deal-design barrier? Perhaps a delayed payment schedule would do the trick, with the bulk of the payment due when procurement budgets are replenished.
The frustrated supplier also may be overlooking a fundamental set-up barrier. While top management from both firms might speak of the importance of "partnership" and "quality," the purchasing agent may be motivated by monthly targets and pennies ground out of suppliers. To succeed, the supplier may need to create a more promising set-up with more sympathetic parties involved in the negotiations skills training.