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deal design

What is Deal Design?

When negotiators engage in thoughtful deal design, they position themselves to capitalize on the upsides of group negotiations and minimize the potential costs.

Without realizing it, we leave many of our most important decisions in negotiation up to chance. We make tacit assumptions about whether we’ll negotiate in person, what we’ll discuss, how long the negotiation will last, and so on.

This type of automatic decision making may lead to good deals, but it can prevent us from reaching great ones. By taking time to ask ourselves deliberate questions about deal design before and during our negotiation, we can set ourselves up for a more productive and rewarding agreement.

Consider the following real-world dispute where poor deal design created costly barriers. Environmentalists and farmers opposed a power company’s plans to build a dam in the Midwest. On the surface, the parties appeared to have deep, irreconcilable positions. Yet a superior deal could be designed if the parties looked past their bargaining positions to their underlying interests.

As it turned out, 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 needed new capacity and a greener image. After a costly legal stalemate, 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.

Creative deal design can help you build a foundation of trust and cooperation—and avoid conflict and chaos—in negotiations involving multiple parties and contentious issues.

To learn more about deal design, and discover how to boost your power at the bargaining table, download your FREE copy of Dealmaking: Secrets of Successful Dealmaking in Business Negotiations, from the Program on Negotiation at Harvard Law School, today.

The following items are tagged deal design:

Practical Lessons from the Great Negotiators

Posted by PON Staff & filed under 1 Day Courses, executive training.

Since 2001, the Program on Negotiation has bestowed the “Great Negotiator Award” on individuals who have successfully negotiated against great odds to accomplish worthy goals. In this fascinating one-day session, you’ll have the rare opportunity to explore how these remarkable negotiators overcame their most formidable challenges—and how to apply these lessons in your own negotiations. … Read More 

The Deal-Making Process: Playing the Long Game

Posted by PON Staff & filed under BATNA.

Do you have regrets about the deals that got away? If so, you might be newly motivated by the deal-making process of famed Hollywood movie and television producer Albert S. Ruddy. For 50 years he pursued two pet film projects—each of which finally led to a negotiated agreement and is coming to fruition. A Deal-Making Process … Read More 

Negotiation and Leadership: Dealing with Difficult People and Problems

Posted by PON Staff & filed under executive training, Negotiation and Leadership - Live and Online.

At Negotiation and Leadership, you will test your beliefs and assumptions, overcome emotional and rational biases, examine complex negotiation scenarios, and discover a range of competitive and cooperative negotiation strategies. In this acclaimed program, we compress 30 years of groundbreaking research into three thought-provoking days. In sessions taught by our expert faculty, you’ll broaden your … Read More 

How to Negotiate a Business Deal

Posted by Katie Shonk & filed under Business Negotiations.

In late 2016 and early 2017, news stories abounded of companies that were having second thoughts about planned mega-mergers. Abbott Laboratories began looking for ways to exit its acquisition of Alere, citing investigations of the medical test maker, for example. And Verizon started rethinking its acquisition of Yahoo! following a data breach at the tech … Read More 

Must-Read Negotiation Books for 2019

Posted by Katie Shonk & filed under Negotiation Training.

The year 2017 offered plenty of negotiation hits and misses in the realms of government, business, and beyond. To avoid failed negotiations in 2018, politicians, business leaders, and the rest of us would be wise to explore the following recent negotiation books, which can help steer us through our most difficult negotiating dilemmas: … Read More 

For Professional Negotiators, Three Is a Magic Number

Posted by Katie Shonk & filed under Negotiation Skills.

Everything good comes in threes, they say. For storytellers, this means understanding that readers and listeners find a sequence of three things to be memorable, satisfying, and compelling—whether it’s three bears, three little pigs, or three kings. For professional negotiators, sequences of three can be rewarding as well. The following examples of good negotiation skills … Read More 

Deal Design: Strategies for Complex Dealmaking

Posted by Katie Shonk & filed under Dealmaking.

As experienced negotiators well know, the more parties involved in a negotiation, the more difficult it often is to come to agreement, due in part to the logistical challenge of making sure each voice is heard. Yet multiparty negotiation offers considerable benefits. Most notably more opportunities for making tradeoffs and creating value in negotiation than … Read More 

Deal Design Guidelines: Set Yourself Up for a Better Deal

Posted by PON Staff & filed under Dealmaking.

Without realizing it, we leave many of our most important decisions in negotiation up to chance. When talking to a potential negotiating partner, we may assume that we have met the best person possible to do this particular deal. We make tacit assumptions about whether we’ll negotiate in person, what we’ll discuss, how long the … Read More 

Great Negotiators vs. Great Negotiations: The Program on Negotiation’s Great Negotiator Teaching Series

Posted by PON Staff & filed under Negotiation Skills.

Teaching negotiation using case studies focused on the efforts of great negotiators can help achieve several pedagogical goals at the same time. Developed by Professor James Sebenius of Harvard Business School, the Program on Negotiation’s Great Negotiator case study series, available from the PON Clearinghouse, highlights the lessons learned by each recipient of PON’s Great … Read More 

Learning from the Debates About the Debates

Posted by Katie Shonk & filed under Dealmaking.

There is “nothing worse than a debate about debates,” John Podesta, the chairman of Hillary Clinton’s presidential campaign, recently said in the midst of his candidate’s heated negotiations with Democratic rival Bernie Sanders about the terms of their debates. Many who participated in these negotiations would likely agree. But the debates about debates—both on the … Read More 

Building Momentum Through Goodwill Gestures

Posted by PON Staff & filed under Dealing with Difficult People.

Sometimes disputes are left to fester for years, even decades, until parties decide there is something to be gained from reaching agreement. The nations of Bangladesh and India recently seized on an opportunity to push the “restart” button on their bumpy relationship by resolving one such ongoing dispute. Living in no man’s land Until recently, on each … Read More 

Dear Negotiation Coach: Learning from experience

Posted by PON Staff & filed under Business Negotiations.

Q: I work with a group that has completed several mergers and acquisitions on behalf of our organization in recent years. We would like to assess how well we have done and where and how we might improve. What’s the best way to go about this? A:Across all kinds of business negotiations, assessing a team’s performance … Read More 

Conflict Management Techniques: Should You Take Your Dispute Public?

Posted by PON Staff & filed under Conflict Resolution.

To turn up the heat on opponents, negotiators sometimes advertise their grievances. Here’s negotiation skills advice on when it’s a good idea to be vocal—and when to keep talks private. The decision seemed nonsensical. Early on the morning of March 7, 2010, with the Academy Awards telecast just hours away, the Walt Disney Company pulled the signal on … Read More 

Hong Kong Lawyer Benny Tai Inspired by Harvard Negotiation Project Authors

Posted by PON Staff & filed under Teaching Negotiation.

The Harvard Negotiation Project was recently mentioned in the Wall Street Journal by David Feith in his interview with Benny Tai, “China’s New Freedom Fighters.” Benny Tai, a 49 year old lawyer who has been branded an “enemy of the state,” founded Occupy Central with Love and Peace, a group that promotes civil disobedience in order … Read More 

Capitalize on negotiator differences

Posted by PON Staff & filed under Negotiation Skills.

Adapted from “What Divides You May Unite You,” by James K. Sebenius (professor, Harvard Business School), first published in the Negotiation newsletter, July 2005. Some years ago, an English property development firm had assembled most of the land outside London that it needed to build a large regional hospital. Yet a key parcel remained, and its … Read More 

Negotiating in three-dimensions

Posted by PON Staff & filed under Daily, Negotiation Skills.

James Sebenius and David Lax, co-authors of 3D Negotiation, share their thoughts on why negotiation is a core skill for all managers in this interview with Martha Lagace, senior editor of Harvard Business School’s Working Knowledge. Offering examples of common mistakes made by negotiators, they explain how negotiators can improve their results by negotiating … Read More 

Gain greater leverage with sole suppliers

Posted by PON Staff & filed under Business Negotiations, Daily.

Adapted from “Negotiating with Sole Suppliers,” by David Lax (managing principal, Lax Sebenius LLC), first published in the Negotiation newsletter. Negotiators often wonder how to do business with sole suppliers who know they don’t have any real outside alternative and who take advantage of this. Without the power of a realistic best alternative to a negotiated … Read More 

Prof. Guhan Subramanian featured in Forbes India

Posted by PON Staff & filed under Business Negotiations, Daily.

Professor Guhan Subramanian was featured in Forbes India in April 2010. Professor Subramanian discusses his latest book Negotiauctions: New Dealmaking Strategies for a Competitive Marketplace, which was published in February 2010. Click here to read the full article. Professor Subramanian will be teaching Advanced Negotiation: Deal Design and Implementation at the Harvard Negotiation Institute June 14-18. For … Read More 

Harvard Negotiation Institute Begins!

Posted by PON Staff & filed under Daily.

On the morning of June 8, 2009, hundreds of participants from around the world began their week-long intensive Basic Negotiation Workshop and Mediation Workshop.  Participants will engage with instructors Bruce Patton and Frank Sander for five days of interactive study.  There are still seats available in our 2-Day Intensive  Basic Negotiation course, which begins Thursday, … Read More