negotiating over an orange
Dealing with Difficult People
ten. how do you divide an orange?
One of the subjects I took during my MBA that was the most valuable was the elective on negotiation. There was a lot to take in, but the simple starting point was a change in mindset in approaching a negotiation.
Often we will think that we're negotiating over one particular result, but it's possible that our negotiation partner will have other things we might like, and we will have other things they might like. In fact, we might not put much of a value on something that they value highly, and vice versa.
- The first phase of a negotiation, then, is to work out the size of the pie that we are seeking to divide up: the exchange of information
- The second phase is to work out what the different slices of the pie will be; seeking a solution
- The third phase is to manage any concessions that might be needed to reach that solution
- Finally, the negotiation hasn't been successful unless the parties manage to implement the agreed solution.
Merely having a structure like this that you're working to (even if you don't explain the structure in a formal way) can be a huge help to you as you work through a negotiation.
My favourite simple example of what can go wrong when you rush to a solution without the information exchange is the situation where two people (say, A and B) are negotiating how to divide an orange.
With no more information than that, you might just take the orange, slice it into two equal halves, and give one half to A and the other half to B. Fair, yes, but optimal?
The information exchange would reveal that A is trying to make a cake: A wants the orange zest, while B is thirsty and wants the orange juice.
Reaching an agreement after you have exchanged information can result in both parties taking away more value than a simple 50/50 split. But without the information exchange, neither party would know whether they had reached a "wise agreement".
In other situations, you may need to walk away, as your negotiation partner is not prepared to offer something you would expect. When approaching a negotiation, it's good to know what the worst case might be, if you're unable to agree. You may hear the term BATNA or "best alternative to a negotiated agreement". Knowing your BATNA heading into a negotiation can help you relax, which gives you more room to think clearly about the phases of the negotiation.
What's your favourite negotiation story?
Hit reply to let me know.
Dave
Work. Study. Dad.