Video: Setting the Stage for Productive Negotiations

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productive negotiations

Understanding how to arrange the meeting space is a key aspect of preparing for productive negotiations. In this video, Guhan Subramanian, professor at Harvard Law School and Harvard Business School, discusses a real world example of how seating arrangements can influence a negotiator’s success. The discussion was held in his negotiation training workshop “Setting the Stage for Productive Negotiations” in the Program on Negotiation for Senior Executives.

To learn more about PON’s Executive Education courses, click here. To see more PON negotiation videos, click here.

Preparing for Productive Negotiations

Now that you’ve watched the above video on setting the stage, take a moment to learn about preparing for negotiations further.

Imagine you set up the contract renegotiation with a key client months ago. You had every intention of gathering a range of information to establish realistic goals and assess the client’s needs, but short-term projects got in the way. Suddenly it’s the day before the first meeting. Aside from making a few phone calls and calculations, you’ll have to wing it—but that’s OK. You’ve always worked well under pressure. Right?

We all know we’re supposed to prepare to negotiate, yet we often fail to follow through on these best intentions. That’s a problem because research overwhelmingly shows that underprepared negotiators make unnecessary concessions, overlook sources of value, and walk away from beneficial agreements.

Lack of preparation probably has cost you in past negotiations, and a greater commitment to planning could improve your outcomes significantly. The three steps outlined here question your assumptions, set the right table, and get ready to create value—will put you on a better path. In addition, the preparation worksheet offers a detailed checklist to help you gear up for your next round of talks.

For most negotiations, you’ll need to invest considerable time in preparing to create value at the table. First and foremost, this means assessing what you and your counterpart will do if you don’t reach agreement.

Preparing for productive negotiations tip #1: Fall in love with three.

In his book Smart Money Decisions, Max H. Bazerman describes one of the occupational hazards of being a negotiation expert: the Sunday night phone call from a friend who fell in love with a house that day at an open house and quickly submitted a bid. Now the friend is desperate for advice on closing the deal. These calls put Bazerman in the awkward position of telling friends that they’ve already violated an important rule of negotiation: “Fall in love with three,not just one.” Why devote time and energy to falling in love with three houses when you want just one? Because the knowledge that you have other appealing alternatives increases your power in the current negotiation, giving you the confidence you need to walk away rather than conceding too much.

Preparing for productive negotiations tip #2: Size up alternatives.

Finding attractive alternatives to the current negotiation will help you identify your best alternative to a negotiated agreement, or BATNA. In the context of a negotiation for a particular house, your BATNA might be to stay in your current home or to make an offer on another desirable house. If you reach an impasse, you will be left with your BATNA. That’s why you should prefer any negotiated agreement that offers more value than your BATNA to an impasse.It’s just as important to estimate your counterpart’s BATNA.

Consider that a homeowner who is relocating to another state will be more motivated to sell than one who is simply testing the real-estate market.

The market tester has a better alternative to agreement—staying put—than someone faced with the prospect of trying to sell an empty house long-distance. It stands to reason that a person who is relocating will bend further than a market tester on price and other issues.

Preparing for productive negotiations tip #3: Assess the bargaining zone.

Estimates of BATNAs will give you a sense of the bargaining zone, or zone of possible agreement (ZOPA),in your negotiation. If it seems that both parties have better options than bargaining with each other, it might make sense to call off talks for the time being.If a bargaining zone exists, however,brainstorm proposals that could inspire a mutually beneficial agreement before sitting down with your counterpart. Specifically, look for packages that greatly exceed your best alternative while also exceeding the other side’s BATNA.

This prep work should lead you toward what MIT professor Lawrence Susskind calls the “trading zone”—that space within a negotiation when parties capitalize on differences to create value. Like negotiation itself, preparation needn’t be a chore. Once you achieve the better outcomes that result from better planning, you’ll find yourself clearing space on your desk—and in your mind—to plot out the process.

Comments

One Response to “Video: Setting the Stage for Productive Negotiations”

  • Chad E.

    Great example. One of the things I like best about Guhan is how well he uses his mistakes (not just his successes) to illustrate important points.

    Reply

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