We negotiate all the time in our jobs, businesses, daily activities and personal lives.
Negotiation is the process of using information and power, to affect another person’s behaviour, “within a web of tension” (1).
Negotiation is not an event, but a process.
Through negotiation we seek to act and behave in such a way as to build trust with our counterparty. Each of us has certain, unique needs which we seek to harmonise so as to resolve a dispute or otherwise achieve an outcome involving another party.
The 3 elements of any negotiation are:
- The power that each party exerts
- The amount of information each party holds
- The time pressures bearing on each party
As regards the question of a party’s power, it is largely in the perception of the other party as to its extent. Power need not simply be physical or financial, but such things as expertise, morality, precedent, and even persuasive capacity.
Information too is multidimensional. It’s not just what a party bring to the table, but what it obtains during the course of its exchanges with the other party.
And as regards the effect of time, it pays not to rush to a deadline, but to appear unruffled, even nonchalant, and in so doing accumulate information and hopefully leverage.
Broadly speaking, there are two kinds of negotiated outcome: compromise or win-win.
Lawyers often seek compromise, especially to resolve a dispute.
Whilst compromise is a false solution which no one likes, parties to a dispute often have no desire to invest in the relationship; they want it to end, then and there. So, in the legal sphere a compromise is a discrete, once and for all outcome which neither party wishes to repeat with the other, ever again (often the same sentiment is expressed regarding further engagement of the lawyers!). However, finality should be achieved.
On the other hand a ‘win-win’ negotiation should be the primary objective of business dealings. It’s likely that at least one party wants the relationship to continue, after the negotiation is concluded. Hence ‘win-win’ aims to build trust. So that one party at least negotiates to understand what its counterpart truly wants. If understanding is achieved then both parties should get out of the negotiation pretty much what they wanted at the beginning.
And by way of postscript, it is often the case that satisfaction from a concluded negotiation comes not from what you get out of it, but how you handled the process.
(1) Herb Cohen (1980)