Six Habits of Merely Effective Negotiators
thus create new value. Consider a dispute over a dam project. Envi- ronmentalists and farmers opposed a U.S. power company’s plans to build a dam. The two sides had irreconcilable positions: “abso- lutely yes” and “no way.” Yet these incompati- ble positions masked compatible interests. 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 devised an interest-driven agreement that all of them considered prefera- ble to continued court warfare. The agreement 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. Despite the clear advantages of reconciling deeper interests, people have a built-in bias to- ward focusing on their own positions instead. This hardwired assumption that our interests are incompatible implies a zero-sum pie in which my gain is your loss. Research in psy- chology supports the mythical fixed-pie view as the norm. In a survey of 5,000 subjects in 32 negotiating studies, mostly carried out with monetary stakes, participants failed to realize compatible issues fully half of the time. 2 In real-world terms, this means that enormous value is unknowingly left uncreated as both sides walk away from money on the table. Reverse Midas negotiators, for example, al- most automatically fixate on price and bar- gaining positions to claim value. After the usual preliminaries, countless negotiations get serious when one side asks, “so, what’s your position,” or says, “here’s my position.” This positional approach often drives the process toward a ritual value-claiming dance. Great ne- gotiators understand that the dance of bar- gaining positions is only the surface game; the real action takes place when they’ve probed behind positions for the full set of interests at stake. Reconciling interests to create value re- quires patience and a willingness to research the other side, ask many questions, and listen. It would be silly to write off either price or bar- gaining position; both are extremely impor- tant. And there is, of course, a limit to joint value creation. The trick is to recognize and productively manage the tension between co-
value on each side’s contribution to determine ownership shares. A negotiator might drive this process down two very different paths. A price-focused approach quickly isolates the val- uation issue and then bangs out a resolution. Alternatively, the two sides could first flesh out a more specific shared vision for the joint ven- ture (together envisioning the “pot of gold” they could create), probe to understand the most critical concerns of each side—including price—and craft trade-offs among the full set of issues to meet these interests. In the latter approach, price becomes a component or even an implication of a larger, longer term pack- age, rather than the primary focus. Some negotiations are indeed pure price deals and only about aggregate economics, but there is often much more to work with. Wise negotiators put the vital issue of price in per- spective and don’t straitjacket their view of the richer interests at stake. They work with the subjective as well as the objective, with the process and the relationship, with the “social contract” or spirit of a deal as well as its letter, and with the interests of the parts as well as the whole. Three elements are at play in a negotiation. Issues are on the table for explicit agreement. Positions are one party’s stands on the issues. Interests are underlying concerns that would be affected by the resolution. Of course, posi- tions on issues reflect underlying interests, but they need not be identical. Suppose you’re considering a job offer. The base salary will probably be an issue. Perhaps your position on that issue is that you need to earn $100,000. The interests underlying that position include your need for a good income but may also in- clude status, security, new opportunities, and needs that can be met in ways other than sal- ary. Yet even very experienced deal makers may see the essence of negotiation as a dance of positions. If incompatible positions finally converge, a deal is struck; if not, the negotia- tion ends in an impasse. By contrast, interest- driven bargainers see the process primarily as a reconciliation of underlying interests: you have one set of interests, I have another, and through joint problem solving we should be better able to meet both sets of interests and Mistake 3 Letting Positions Drive Out Interests
harvard business review • april 2001
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