PRODUCTIVITY SPECTATOR: When negotiations get personal

Negotiating is a critical skill, particularly in times of crisis, but many negotiators perform poorly for fear of damaging the relationship with the counterparty. There is a better way.

Productivity Spectator

There’s been plenty of attention paid to the new relationships developing between the new leaders in Europe and the person who controls the purse strings, Angela Merkel.

France’s Francois Hollande, Italy’s Mario Monti and Spain’s Mariano Rajoy are all new faces at the negotiating table and clearly they have changed the nature of the game. The concessions offered by Merkel earned her much criticism back home but as Cliona O’Dowd pointed out yesterday (Survival instinct pushes Europe onwards, June 2), keeping the Euro together is a long game. There is much negotiation ahead.

In fact, the tough talks during last week’s conference may be an important step toward creating a stronger institution in the future.

It turns out that negotiating, and particularly, tough, principled negotiating can be a useful tool to cement stronger bonds.

One of the reasons people are so uncomfortable about negotiating is they are fearful of damaging the relationship with the counterparty. While most people are happy to drive a hard bargain in one-off encounters (at a souvenir shop, for instance), they are less likely to negotiate strongly if they expect that relationship to be ongoing.

It’s one of the reasons people tend to undersell themselves in salary negotiations, or accept poor terms on business deals.

But new research from Columbia Business School suggests that far from damaging relationships, negotiating can actually improve the feelings of goodwill between two parties.

Research by Professor Ko Kuwabara at Columbia took two test groups and had them engage in two types of negotiations. The first was the classic zero-sum game negotiation (dividing a fixed amount) where there was a clear winner and loser. The subjects reported a greater degree of conflict and valued the relationship less when queried about the outcome. But when participants were asked to engage in ‘win-win’ scenarios – negotiations where mutually beneficial outcomes could be delivered – participants reported that they felt a greater sense of cohesion with the counterparty, as well as a stronger feeling of teamwork.

Quoted in Columbia Business School’s Ideas@Work Kuwabara said: "A lot of people shy away from negotiation with spouses, bosses, or subordinates because they assume that it implies conflict and competition, ..they think it’s worse for relationships. But people develop a stronger sense of trust and cohesion in win/win negotiations, where you work together to grow the pie and benefit both parties, It creates a feeling of ‘we-ness’ where you really identify with the relationship.”

This is equally valid whether you are a European leader or just an ordinary salary earner, business owner or spouse.

So get negotiating. One of the things people often fail to realise is that counterparties may have hidden needs that can be uncovered while seeking a solution. Instead of assuming that you are entering a win or lose scenario, consider that you may in fact be able to deliver a mutually beneficial outcome for both parties. Often a bit of research into your counterparty's business needs, or an understanding of current economic conditions may offer you a bargaining point that allows you to grow the pie. If you can do that, then you will be deserving of a greater share of the spoils.

One of the best books about negotiation is Getting To Yes by Roger Fisher and William Fry of the Harvard Negotiation Project. They have four key tools for good negotiating;

Separate the people from the problem
– Defuse emotions and egos that can become entangled with the negotiation

Focus on interests, not positions
– Uncover the underlying interests behind the reasons for negotiating

Generate options for mutual gain
– Brainstorm ideas that broaden our a win-win scenario

Insist on using objective criteria
– with mutually agreed criteria for evaluating solutions