THE SEVEN STRATEGIES OF MASTER NEGOTIATORS

by: Issues: May / June 2005. Categories: Global Business.

The difference between sitting down at the negotiating table and negotiating effectively is rather like the difference between the ball player who just shows up and the one who shows up ready to play. Which is why all good negotiators (and ballplayers) show up with their game face on. This experienced negotiator has excellent advice that will prepare any manager to play to win.

Style and effective interpersonal skills are qualities that any negotiator must have. But in my observation, the most successful negotiators, those whose track record enables them to be called master negotiators, have seven specific strategies. They are:

  1. Build the future with creative solutions.
  2. Come to the table incredibly well-prepared.
  3. Create and claim maximum value.
  4. Understand negotiating style.
  5. Master the negotiation process.
  6. Build strategic alliances.
  7. Become a life-long learner.

Each of these strategies will be described below.

1. Build the future with creative solutions. Master negotiators are both excellent problem solvers and opportunity seekers. The characteristics of opportunity seeking combined with masterful problem solving are manifested in how these negotiators perceive, and interact with, the world. For example, Canadian National Railroad (CN) and Canadian Pacific Railroad (CP) were east coast to west coast railroads. All that changed dramatically with the advent of NAFTA (The North American Free Trade Agreement). CN bought the Illinois Central Railroad, which transformed it into the first NAFTA railroad. Today, more than 58 percent of CN’s revenue is based on north-south, not east-west, traffic.

Creative solutions lead to expanding the pie, thereby providing more opportunities for all of the parties in the negotiation to benefit from being in the negotiation process. However, to develop creative solutions, we must come to the table incredibly well-prepared.

2. Come to the table incredibly well-prepared. After teaching negotiating skills and coaching individuals for more than 20 years, I have found that the biggest mistake people make is to come to the table overly confident and under-prepared.

We can not assume that we are prepared for a negotiation only to find out, to our chagrin, in the middle of the negotiation, that we were not as well prepared as we thought we were. For example, in 1999, Halifax lost the bid to host the World Junior Hockey Championships because the organizers did not think enough tickets could be sold in Halifax. But when it was time to bid for the 2001 World Junior Hockey Championships, there was no contest. Halifax won. This victory was due to the preparation talents of Master Negotiator Fred MacGillivray. By pre-selling 6000 tickets worth $3.4 million dollars, the Halifax bid was so strong there was no question about it – the tournament organizers had to say “Yes!” Not only did Halifax win the bid, the games brought $20 million dollars into the province and were the most well attended and successful games to date. This example also demonstrates how the first two strategies, Build the future with creative solutions and Come to the table incredibly well-prepared, work together synergistically. Incidentally, Fred MacGillivray built on this success and successfully hosted the 2003 Women’s Hockey Championships, again breaking attendance records and both Halifax and Quebec City will host the 2008 World Men’s Hockey Championships.

3. Create and claim maximum value. Creating value and claiming value are at the heart of the negotiation process. Creating value is our ability to effectively develop creative solutions to meet the needs of all parties at the negotiating table. This process is commonly known as expanding the pie. Claiming value is our ability to effectively get our needs and interests met through the negotiating process. Claiming value refers to the amount of the pie we receive as a result of the negotiation process.

Most negotiators do a good job either at creating value or at claiming value. Master Negotiators do a good job of both. In fact, it is the judicious juxtaposition of these two skill sets that determines how well we negotiate. The following example illustrates this point.

In 1991, as the Soviet Union was disintegrating, a number of new countries were created in Eastern Europe. Each of these countries wanted a Canadian embassy. But Canada was in a recession at the time so there was no money to be spent on new embassies. To move the negotiations forward, we first developed a list of each side’s interests; we then verified the interests and prioritized them. For example, the prioritized list of interests for Canada and for the New Countries might look something like the list presented in Figure 1.

While there may be many more than four interests, the Law of Four is a rule of thumb that was designed to make sure that the most salient interests have been noted. In rare cases there may be less than four. However, Master Negotiators have determined that the better job one does at identifying and prioritizing the interests of both parties, the more likely it is that a creative solution will be found.

After the interests have been determined, verified and prioritized, creative options to meet the needs of all of the parties must be developed. Again, we want to use the Law of Four so we can come to the table with at least at least four options. The second biggest mistake that I have seen would-be negotiators make is not coming to the table with enough prepared options and not developing even more creative options at the table. Possible options in our embassy case are presented in Figure 2.

In the end, the best solution was for Canada and Australia to share embassy space. Both countries are of a similar size and population and have similar political outlooks. Each country paid half of the amount for embassy space and value was created for Canada, Australia, and the host countries.

Now, let’s imagine that in Tallinn, the capital of Estonia, both Canada and Australia decided to share a beautiful, historic four-storey limestone building. On the fourth floor there is one very large spacious office with plate glass windows, which give a gorgeous view of the city and the Gulf of Finland. Also on the fourth floor are two not nearly so nicely appointed medium-sized offices. Claiming value could be a question of deciding which ambassador, the Canadian or the Australian, gets the most prestigious office. Of course, the most creative solution would be to use the large office as a boardroom. When the Canadian Ambassador needed to use the boardroom, the Canadian flag would be brought in, and when the Australian Ambassador needed to use the boardroom, the Australian Flag would be brought in. The two Ambassadors would each have the use of a medium sized office.

4. Understand negotiating style. Research on negotiation style has demonstrated that there are cooperative negotiators who are effective just as there are cooperative negotiators who are ineffective. Likewise, there are effective aggressive negotiators just as there are ineffective aggressive negotiators. Therefore, you must understand your own negotiating style — how effectively you use that style and how your style interacts with others who use a similar style and with those who use a different style. To understand negotiation style we have to learn where our style works for us and where it works against us. One of the best ways to understand this is to watch the movie The Great Santini (1980). In the film, Robert Duval plays a Marine pilot. By the end of the film we can see that his style, which is quite authoritarian, militaristic and hierarchical, works for him perfectly at work. However, it is an unmitigated disaster at home, with his teenaged son. Master Negotiators don’t assume that they know where their style works for them and where it works against them. They know where it works and have learned to be flexible and/or to compensate for any weakness by constantly asking others for feedback. For example, twice a year, when I am feeling somewhat secure as a father, I ask my children, independently, to tell me three things that I am doing well as a father and to select three targets for improvement. Expert managers and supervisors ask their staff similar questions, only in this case it is about the manager’s or supervisor’s performance at work.

5. Master the negotiation process. Daniel Goleman, one of the foremost authorities on emotional intelligence, says that awareness is the master aptitude. Negotiators have to be aware at all times of the effect that their behaviour, both verbal and non-verbal, has on the negotiation process. Three critical areas where Master Negotiators have developed awareness of the negotiation process are in relation to the three types of outcomes, choice points and good-will.

The three types of outcomes are substantive, relationship, and process which can be characterized as a three-legged stool. One leg of the stool represents the substantive outcome, the second leg the people and the type of relationship they will have, and the third leg the process the parties will use to reach an agreement (see Figure 3). If any of the legs do not measure up, the stool becomes unstable and problems occur in the negotiation. Therefore, Master Negotiators negotiate to ensure that all three parts of the process are monitored and keep moving towards optimal performance.

Less experienced negotiators will focus entirely on the substantive outcome. If the process is terrible or the relationship gets damaged, so be it. That is until there is another negotiation in the future and that negotiation becomes more difficult due to the previous interaction.

More experienced negotiators focus on both the substantive outcome and on the people and their relationships. These negotiators want a good substantive outcome and a good relationship outcome.

However, Master Negotiators focus on all three elements, that is, the substantive outcome, the people and the type of relationships they will have, and on choosing the most effective negotiation process for each and every negotiation situation. This is important because each of these three elements inherently affects the others.

Choice points are incredibly important points in the negotiation whereby if we do the right thing, in the right way, at the right time, the negotiation will move forward towards an effective resolution. Likewise, if we do the wrong thing, in the wrong way, at the wrong time, the negotiation will break off, tensions will escalate, and/or the negotiation will stalemate.

Master Negotiators are masters at creating good-will. Good-will is like money in the bank. Goodwill helps a negotiator smooth over a rough spot in a negotiation, whereas the lack of goodwill is more likely to derail the negotiation.

6. Build strategic alliances. Golda Meir, a former Prime Minister of Israel, insisted on face-to-face meetings while negotiating with the Arabs. A journalist questioned the need for these meetings; “Even divorces are arranged without personal confrontation,” he said. “I’m not interested in a divorce,” Mrs. Meir replied. “I’m interested in a marriage.” (Eric Wm. Skopec and Laree Kiely, Everything’s negotiable: When You Know How to Play the Game, American Management Association (1994).

Strategic alliances can be defined as developing a relationship with another individual(s), organization(s), or company(s) to: a) bring pressure on another party or parties to negotiate, b) enlist other parties to help the negotiations on your behalf, c) to help you better identify the interests of the party(s) you will be negotiating with, or d) to develop and bring more creative options to the negotiating table, and/or e) to develop a stronger BATNA (Best Alternative to Negotiated Agreement). The point to remember is that Master Negotiators are Master Networkers. All of the Master Negotiators I interviewed used their networks superbly, when necessary, to help them come to the negotiating table better prepared, to help them manage the negotiation process more effectively, and/or to overcome seemingly insurmountable obstacles.

The world we now live in is increasingly competitive and increasingly complex. Strategic alliances are critical to our business success. In a very real sense, we are all only as wise as the network of people we have available to advise us. Master Negotiators cultivate their networks of negotiation advisors and develop strategic alliances with the utmost care. They know that their own success and the success of their organizations for depend on the quality of their relationships as much as, if not more so, on their own abilities.

7. Become a life-long leaner. All of the Master Negotiators I interviewed for my book were life-long learners. Because learning how to negotiate and learning from our negotiations are so important, Master Negotiators learn continuously and, just like compound interest, that learning is compounded by what they have learned previously.

Because these strategies are so important, Master Negotiators do not want to leave the learning about these strategies and/or learning how to implement the strategies to chance. I have, therefore, developed a tool to help you master them. That tool is the Master Negotiator’s Preparation Form (MNPF) and a copy of the form can be found in Figure 4 at the end of this article.

Would you fill out the MNPF for every negotiation you are in? Absolutely not — you would never go home. Master Negotiators fill it in selectively based on the negotiations they are in. However, for important negotiations, you should always fill it in. You should also use your strategic alliances from your Master Negotiator’s Yellow Pages to get feedback before you go into the negotiation. Your advisor(s) may point out a trade off or a concession that you might never have thought of and that particular trade off or concession could mean the difference between making and not making a deal. Lastly, for truly important negotiations, ask your colleagues to help you role play the negotiation. Just as you would not show up on opening night for the lead role in a play without going to rehearsals, you want to rehearse your most important negotiations and you want to role play it with yourself playing your role and then the role of the person with whom you will be negotiating.