Like many executives, you know a lot about negotiating. But still you fall prey to a set of common errors. The best defense is staying focused on the right problem to solve.
Six Habits of Merely Effective Negotiators
by James K. Sebenius
in and studied over the years, I’m struck by how frequently even experienced negotiators leave money on the table, deadlock, damage relationships, or allow conflict to spiral. (For more on the rich theoretical understanding of negotiations developed by researchers over the past fifty years, see the sidebar “Academics Take a Seat at the Negotiating Table.”) There are as many specific reasons for bad outcomes in negotiations as there are individu- als and deals. Yet broad classes of errors recur. In this article, I’ll explore those mistakes, com- paring good negotiating practice with bad. But first, let’s take a closer look at the right negoti- ation problem that your approach must solve.
Global deal makers did a staggering $3.3 tril- lion worth of M&A transactions in 1999—and that’s only a fraction of the capital that passed through negotiators’ hands that year. Behind the deal-driven headlines, executives end- lessly negotiate with customers and suppliers, with large shareholders and creditors, with prospective joint venture and alliance part- ners, with people inside their companies and across national borders. Indeed, wherever par- ties with different interests and perceptions depend on each other for results, negotiation matters. Little wonder that Bob Davis, vice chairman of Terra Lycos, has said that compa- nies “have to make deal making a core compe- tency.” Luckily, whether from schoolbooks or the school of hard knocks, most executives know the basics of negotiation; some are spectacu- larly adept. Yet high stakes and intense pres- sure can result in costly mistakes. Bad habits creep in, and experience can further ingrain those habits. Indeed, when I reflect on the thousands of negotiations I have participated
Solving the Right Negotiation Problem
In any negotiation, each side ultimately must choose between two options: accepting a deal or taking its best no-deal option—that is, the course of action it would take if the deal were not possible. As a negotiator, you seek to ad- vance the full set of your interests by persuad-
harvard business review • april 2001
page 1
Made with FlippingBook - Online catalogs