Three elements are at play in a negotiation, according to James Sebenius (writing in the Harvard Business Review) who has done thousands and ought to know:
1. Issues are on the table for explicit agreement.
2. Positions are one party’s stands on the issues.
3. Interests are underlying concerns that would be affected by the resolution.
Despite the clear advantages of reconciling deeper interests, people have a built-in bias toward focusing on their own positions instead. This hardwired assumption that our interests are incompatible implies a zero-sum pie in which my gain is your loss. Research in psychology supports the mythical fixed-pie view as the norm.
In a survey of 5,000 subjects in 32 studies on negotiating, mostly carried out with monetary stakes, participants failed to realize compatible issues fully half the time. A very useful technique for solving problems and negotiating differences is one that was coined years ago by Roger Fisher, Bill Ury, and Bruce Patton in their book “Getting to Yes: Negotiating Agreement Without Giving In.” The technique is BATNA — an acronym for “best alternative to a negotiated agreement.”
With BATNA, before you engage in a negotiation, you face the fact that you might not reach an agreement at all. If you don’t, you don’t want to be stumped. So you figure out, beforehand, what the best alternative to a negotiated agreement would be. It might, for example, involve approaching another buyer, enduring a stalemate, going to court, etc. The idea is that if you have a BATNA, it will allow you to negotiate strongly without feeling anxious if things aren’t moving forward well.
According to James Sebenius, here’s what you need to do to succeed at negotiating:
* First, focus on the full set of interests of all parties, rather than fixating on price and positions.
* Look beyond common ground to unearth value-creating differences.
* Assess and shape BATNAs.
* Take steps to avoid role biases and partisan perceptions.
The great negotiators are those who take a broader approach to setting up and solving the right problem. With a keen sense of the potential value to be created as their guiding beacon, these negotiators are game-changing entrepreneurs. They envision the most promising architecture and take action to bring it into being.