Negotiation techniques and strategies play a key role in numerous fields: from politics to economics to the law. In addition to these sectors, however, negotiation is also present in multiple areas of our daily life, such as in the workplace between colleagues or collaborators, in the supermarket, and in the family. There are numerous situations that can take on the character of negotiation.
In the business context, negotiation takes on strategic importance, and there is a lot of talk about commercial negotiation, especially in the B2B world where the role of people, trust, and relationships play a crucial role: knowing how to negotiate well is essential to achieve the objectives of the business.
It is therefore normal to ask what is the best approach to take or how to become a good negotiator? What are the best negotiation strategies and techniques to use?
There are no universal rules when it comes to negotiation, nor is it possible to identify “the best approach ever” as negotiation is an often unpredictable process based on the interaction between the parties. However, you can adopt some best practices, strategies, and tactics to increase the possibility of achieving the desired result.
What is negotiation?
Before going into the topic in more detail, however, it is good to have a clear idea of the concept of negotiation and the reason why we speak of “negotiation techniques and strategies.”
Statesman and negotiator Henry Kissinger defined negotiation as a process aimed at combining conflicting positions into a common position under a decision-making rule of unanimity. The American academic Howard Raiffa, in his book The art and science of negotiation, highlighted that we are witnessing a negotiation process in those situations in which two or more parties recognize the existence of differences of interests between them but intend to, or are forced to reach an agreement.
The definitions of negotiations are many. As seen from those above, they include a broad type of situations, all characterized by the existence of some critical conditions: the interaction between two or more people, the presence of a conflict, and different interests and research of an advantage.
Why talk about negotiation techniques and strategies?
However, before analyzing the different approaches to negotiation identified in the literature, it is essential to understand the difference and correlation between the terms ideas, strategies, and tactics. Negotiation is inscribed in a path, in an idea, which is often materialized by related strategies and tactics.
Strategy can be defined as a plan made up of choices and actions implemented in a coordinated and coherent way to achieve a goal. Tactics instead refer to the ability and manner of acting and behaving using the means available to achieve that end. It is therefore not a part of the strategy but develops from it. The strategy is thus a sort of guiding plan; while tactics are all those actions that are carried out concretely within a strategy, the idea is the one from which the strategy is born; it is the starting point.
These concepts are essential because every negotiator must have in mind the goal he wants to achieve (his idea of him); to achieve it, he needs a good plan. The ideal would be to design a flexible path, a basic strategy that can be adapted and modified according to the situation encountered. The ability to plan but choose the best tactic to adopt at the moment, therefore good organizational skills mixed with improvisation skills.
The negotiating structures
The negotiating structures depend on the structure of the game of interests established between the parties. We have seen that, by definition, the parties to a negotiation process have different interests, even if they converge concerning the convenience of agreeing. The parties who actually negotiate, before starting the negotiation, already agree on at least one fundamental aspect: they share the idea that they can best meet their respective objectives by deciding on a solution with the other party rather than trying to meet their goals unilaterally.
However, based on how these different interests are structured, we can find ourselves in two main situations that take the name of negotiation structures:
- the interests of the parties are totally opposed to the point of agreement
- the interests of the parties are partially complementary to each other
The parties’ interests are totally opposite concerning the point of agreement
In the first case, we speak of “zero-sum” games, in which one party wins what the other loses, and therefore the negotiation game has a distributive structure. There is only one stake at stake, and we try to acquire as much as possible of the negotiating space that has been created. In other words, negotiators view negotiations as bidding on a limited or fixed amount of some mutually desired benefit so that one person’s gain is another person’s loss. It is possible to represent this situation with a pie that represents the number of benefits obtainable by the parties. The negotiators will try to secure the largest slice of the pie by leaving the other side as small as possible.
The parties’ interests are partially complementary to each other
In the second case, however, the negotiating game has an integrative structure since the parties’ interests are complementary. We, therefore, speak of “greater than zero” games in which both sides can win. In these cases, more issues are at stake in which the different actors have different preferences. Each party will therefore yield more on the points where its interest is slightest and will try to acquire more in those of greatest interest. Returning to the example of the cake, in this second case, the negotiations are used as a way to “widen the cake,” that is, to multiply the gains to ensure that both sides are better off. So while in a zero-sum negotiation vision, the goal is to commit to claiming one’s share of a “fixed amount of pie,” integrative theories and strategies instead seek alternative ways to create value, that is, “expand the pie” to make so that there is more to share between the parties and that the result of the negotiation is greater.
The theories of negotiation approaches
These two negotiating structures can, in turn, be sub-segmented into different negotiating approaches. There are numerous schools of thought regarding the different approaches to negotiation. For simplicity, we will consider those identified by William Zartman, theorist, professional, and researcher on negotiation. The first approaches we will see are related to the distributive negotiation structure, while the last is the integrative structure. This sub-segmentation serves only to give a theoretical basis for the subject. Still, in practice, most negotiators tend to act using combinations of different approaches and taking cues from different schools of thought.
- Structural Approach: focuses on the means that lead the parties to negotiate and on the relative power of each party in the negotiation that affects their ability to achieve the set objectives. According to this approach, negotiations are seen as conflict scenarios in which the “stronger” side wins and the other loses. But in reality, this is not always the case: the use of mediation and negotiation tactics and skills can lead a party to win regardless of the roles of power. That is, therefore, the first limitation of this approach to which is added the fact that seeing negotiations as conflicts does not consider the possibility of reaching other types of mutually favorable agreements in which both parties can benefit.
- Strategic Approach: focuses instead on the role of goals (objectives) in determining results. The negotiators, in this case, are seen as rational parties who make choices based on a set of alternatives and possible actions that can lead to achieving the desired results. Each actor has an “incentive structure” that is unique and is composed of a set of costs associated with the different actions, combined with the probabilities that the different actions will lead to the desired results. Therefore, their choices are guided by calculating which of the available options will maximize their goals, allowing them to achieve “payoffs.” This type of approach is based on the idea that there is a single best solution for each negotiation It is precisely from the strategic approach that game theory or risk theory developed. In the post “Sales and Game Theory. Negotiator’s Hamletic Dilemma: Compete or Cooperate” you can learn more about how game theory can be applied in sales and negotiations.
- Behavioral Approach: focuses on the role that negotiators’ personalities or individual characteristics play in determining the course and outcome of the negotiation. The interactions between the parties are seen as interactions between different “types,” such as the individualist, the altruist, the cooperative, or the competitive. A huge difference, therefore, emerges from the previous approach in which the parties are seen as rational entities: in this case, emotions, characteristics, and personal attitudes are central and highly influence the negotiation We then enter psychological issues where the art of persuasion, trust, perception, and individual motivation play a fundamental role.
- Process Approach: it considers negotiations as a kind of learning process in which the parties react to each other’s concession behaviors. The concessions mark the stages of the negotiation and are used by the parties both to respond to the offer received, signal their intentions, and influence the opponent’s subsequent move. In this way, as Zartman signals, offers and concessions themselves become an exercise of power. This approach, in fact, shares the focus on “power” typical of the structural approach but also the emphasis on “results” characteristic of the strategic approach. The risk of this negotiating behavior is that the participants involved in this “concessions trading” process may get carried away by the relaunch of concessions and lose opportunities to find new mutually beneficial solutions.
- Integrative Approach: This approach focuses on cooperation, problem-solving, and the realization of mutual profits. In fact, it sees negotiation as a “win-win” interaction, thus entirely contrasting with all the previous approaches falling within the scope of the distributive negotiation In metaphorical terms, the goal, in this case, is to “enlarge the cake” to try to multiply the profits of each negotiating party. Negotiation, in this case, takes place as a process consisting of three fundamental steps necessary before reaching a final agreement: an analysis phase in which information is collected, a planning phase aimed at generating ideas and establishing the actions to be taken, and finally a discussion phase in which the interests of the parties are evaluated, and an attempt is made to understand which options could be advantageous for both. It is, therefore, a process that takes a long time but has long-term benefits as it allows for better, stronger, and more valid agreements.
The necessary elements to consider during a negotiation
According to some scholars (for example, Fisher and Ury), the efficiency of negotiation processes depends on how seven fundamental elements are taken into consideration:
- Interests: To negotiate effectively, one should go beyond the parties’ negotiating positions and instead focus on the real underlying interests. The difficulty, however, is that interests may be more challenging to identify than positions or may even be kept hidden from the parties.
- People: during negotiation approaches, it is often forgotten that the parties are persons and that, therefore, they are subject to human frailties such as emotions, misunderstandings, or incorrect assumptions. For this reason, a fundamental negotiation principle is to separate people from the problem or issue at stake. That is to try to find a way to solve the problem without being influenced by personal matters and, above all, by reaching an agreement to guarantee the maintenance of a good relationship between the parties. In fact, the perception that the counterparties have of each other is crucial because it is a factor that influences the fluidity of negotiations. Honesty and trust are the compasses of this fundamental element. The better the relationship, the greater the cooperation between the parties and the willingness to share information, and the greater the prospects of arriving at a solution that is beneficial to all parties.
- Alternatives: the negotiation process is something uncertain, and so attention to alternatives is essential for setting realistic goals. The parties must reflect on some situations, such as imagining what to do if an agreement is not reached, what alternative solutions they would have available if they cannot count on the collaboration of the other party, etc. for this, it is said that it is essential that the parties know their Best Alternative to a Negotiated Agreement (BATNA) both before and during each phase of the negotiation. Having your BATNA in mind allows the parties to evaluate an agreement better and to reconsider and, if necessary, change their position along the way, thus also following something different from what they had initially foreseen. In this way, negotiators can think more flexibly, explore further possible solutions and, if necessary, re-evaluate the alternatives. A good negotiator is, therefore, able to consider his own limitations in advance, but without letting these limitations inhibit his imagination and ability to recognize profitable opportunities.
- Options: Another key element in the negotiation process is the generation of options. Once the parties have identified their interests and collected information, they must start thinking about all possible ways to ensure the achievement and satisfaction of the greatest possible number of interests of both parties.
- Legitimacy: identify objective and legitimate evaluation criteria. Otherwise, it will be challenging to identify an agreement that is shared and advantageous for the parties. In this way, the negotiation becomes more efficient because instead of wasting time attacking the positions of others, they can concentrate their energies on finding advantageous solutions.
- Commitment: an agreement is only lasting if all parties respect their word and their commitments. One way to build trust between the parties initially could be to gradually establish commitments that need to be fulfilled progressively by the parties. In this way, the parties will feel safer in coming to terms if each demonstrates respect for their commitments step by step.
- Communication: obviously, communication is the basis of any negotiation agreement. In fact, a good communication style helps to convey one’s message clearly and be more convincing. Still, it is also essential when sharing information and interests, and above all, it profoundly influences the relationships between the parties, also improving their attitude towards negotiations. In fact, how one communicates influences how one is perceived by the surrounding people and creates relationships of trust and collaboration. In addition to the fact that, as Socrates teaches with his Socratic method, knowing how to ask the right questions to gather information and empathize with the interlocutor is also fundamental. However, we must also not forget the importance of listening to the other party.
What makes a negotiated solution possible?
In every negotiation, each party has a point beyond which they do not want to push, leading them to stop the negotiation if passed. This point is called the reserve point or “backline.”
By putting together the points of reserve of both negotiating parties, it is, therefore, possible to define the probable scope of an agreement represented by the Zone of Possible Agreement (ZOPA). The ZOPA, in fact, is given by the overlapping interval between the reserve points of the parts. The difficulty, however, is that this is a point that is not generally known by the opposing parties, limiting themselves only to making estimates.
The negotiation will, hence, be successful if the parties reach an agreement within this range.
If, on the other hand, it is not possible to identify an area of overlap between the parties’ reserve points, then there is no ZOPA. Consequently, it becomes unlikely to be able to enter into an agreement and close the negotiation positively for both parties.
- Procedural tactics
- Tactics relating to the presentation of substantive issues
- Tactics to avoid stalling
- Among the procedural tactics, the best known and used are:
- Blanketing: tactic which consists of presenting many problems together. The objectives can be multiple: by grouping weaker issues, there is a greater probability of obtaining a concession on one or two of them; a single weak problem can be buried among the strongest ones; have greater control of the topics under discussion, etc.
- Pairing: introducing two problems together so that you can make concessions on one and gain accommodations on the other.
- Slicing the salami: subdividing a big problem into some smaller ones in such a way as to reduce the object of the negotiation and try to take away small concessions, with a view to “taking possession of one slice of salami at a time” from which derives the name of the tactic. It is, in fact, more challenging to get a concession on a big problem.
- Among the tactics relating to the presentation of substantive issues, we find instead:
- Misdirection: it consists in apparently making a move in one direction to divert attention from what is your real goal.
- Mutt and Jeff: adopt the classic good cop / bad cop tactic. Two people on the same side feign an internal dispute over their position; one takes the hard line by not accepting compromises, while the other shows he wants to make small concessions.
- Silence: use silence as a period of reflection and then wait for the other to act. Knowing when to stop talking and letting the other party respond can, in fact, elicit a new concession or proposal.
- Examples instead of tactics to avoid stalling:
- Go to mediation: ask for the intervention of a neutral person who could encourage and suggest compromises.
- Substitution: change the negotiators with other new figures when the former seem to have reached a “dead end” in the negotiation.
Generally considered, negotiation is a process that can be conducted and approached in various ways, and there is no entirely right or wrong strategy. The key to the right negotiation is based on the ability of the negotiators to carefully assess the situation, consider all elements and identify and compare different options. Although it is often instinctive to see negotiation as a conflict and a struggle to achieve one’s goals, it is rather better to try to conduct the negotiation in a way that gives a common advantage, looking at the other party as a partner rather than an opponent.
And what do you think? What negotiation techniques do you adopt or think are most beneficial to adopt? Please write us in the form below and tell us your opinion.