Taking the First Step in Negotiations

Have a bias toward action – let’s see something happen now. You can break that big plan into small steps and take the first step right away.

Indira Gandhi

For better or worse, we each have to negotiate all the time.  Let’s say you have a problem that needs to be resolved.  You may have a disagreement with your sibling about how to care for Dad, or a conflict with your business partner about the direction the business should take.  You know there is a conflict and you want to resolve it before it gets worse.  Or, perhaps it is not a problem but rather an opportunity.  You have applied for a job and must meet with your prospective employer to determine what the terms of your employment will include.  Or, perhaps you want to buy a car or a house.  You know you have to bargain but the idea fills you with fear.  In all of these situations your best option is to negotiate a strong deal.  Very few of us have ever had a real class in negotiations so the mere thought of bargaining makes us a nervous.  And yet we are faced with the opportunity (or saddled with the burden) of negotiating on a regular basis.  This series of articles looks at the steps to take to effectively negotiate in any situation.

We have identified the six steps to effective negotiation: (1) identify the interests and positions, (2) Consider both side’s options to resolve the issues, (3) Research everything, (4) Establish the ground rules, (5) Bargain: Look for overlap and ways to resolve the issues that best meet the most concerns of the parties, and (6) Memorialize the agreement.  Each of these steps requires a certain amount of work and skill.  But with the right amount of effort you can be prepared to effectively negotiate in any situation.

The first step is to understand the difference between positions and interests and then to identify each in your situation.  The easiest way to consider interests and positions is that the positions are the “what you want” of the problem and the interests are the “why you want it”.  Positions are usually easy to identify.  I have represented many people in divorces and it is not unusual in the first meeting to hear “I want the kids to live with me most of the time, I want my ex to pay me child support, I want alimony of at least $5,000 per month and I should get half of all the stuff.  You can do that, right?”  In a job negotiation the prospective employee may be thinking “I want $55,000 per year, good health insurance and a 401(k)”.  The seller of a house may be thinking “I must get at least $300,000 for this house.  That’s my bottom line.”  All of these are the “positions” of the people entering the negotiations.  The “what” I want.  Positions are usually stated in “black and white”.  They are often stated as “bottom line” places.  And because they are stated as positions they do not allow flexibility.  Either I get what I want or I don’t do the deal.

Contrast this with interests.  Interests require you to look at “why” you want “what” you want.  In the case of my divorce clients, I would often dig deeper to learn my client’s real interests.  These may be a fast and amicable divorce with minimal disruption for the children and security for the family at the end.  The “why” question will get to the bottom of the positions to find the interests.  If I ask a parent in a mediation “why should the children live with you most of the time” I may find that it is because the parent perceives that they were the hands on parent that always helped with the homework and attended all of the school functions.  I might also learn that this was one of the sources of anxiety in the family and that the parent would love it if their spouse would become more involved in the children’s lives.  We may now have a new way to resolve the issue of parenting time if the other parent agrees to become more involved in the daily parenting activities.  Similarly, with the negotiations for a new job, when you consider the “why” question for the position stated above, it may become clear that the reason that the person set the salary where they did was because they had parenting responsibilities that required them to pay a care giver for the afternoons, but a flexible work schedule may allow them to take a slightly lower salary while still meeting the needs of their family.

Knowing your “whys” is often the most difficult but critical part of the negotiation process.  It is difficult because we become emotionally invested in our “whats”, that is our positions.  It is easier to think in black and white.  But to quote the title of a strangely popular book there may be “50 shades of gray”.  It is by answering our “why” questions that we become open to the flow of negotiation and see opportunities that exist outside of our positions but that will meet our needs.  The answer to the why questions, the identification of our true interests, allows us to explore possibilities that meet our needs in ways that we may not have considered.  It also gives a justification to our positions that are truly immovable.

It is not only important to know our own interests but also to become familiar with the other sides interests.  For the seller of a house the bottom line they want for the house is $300,000 (their position) and the buyer may not want to spend a dime over $270,000 (their position).  This would normally mean the end results was “no deal”.   But a savvy real estate agent may be able to structure a deal that could work for these two people if the agent is aware of the “whys” for each side.  If we know that the seller has the ability to take back the mortgage on the property and this will provide them with a stream of income that they wouldn’t otherwise have and the seller is willing to pay a bit more on the price for favorable terms on a mortgage that they wouldn’t otherwise qualify for than there may be middle ground.  Or perhaps the buyer is willing to pay more if the house has a new roof and the buyer has connections that will allow them to make some repairs and replace the roof at a reasonable cost.  These solutions may meet the buyer and sellers interests more than the intractable positions they originally took.

The “whys” in negotiations are often our primal emotions: security, safety, trust, happiness.  When someone says that they have a bottom line dollar number and will not take/offer a dime more/less, this is rarely the case.  When I still litigated divorces, I often entered negotiations where my client had said something like “I will not accept a dime less than $3,000 per month in alimony”.  But after hours of negotiations when the “final” offer comes from the other side that they will settle for $2,200 per month in alimony but will agree to more than half of the assets coming to my client, and pay for the child’s private school so long as they receive the tax deduction for the child, suddenly a deal is done.   That is because both sides had their interests (the whys) met by the deal.  Once we moved from a specific number to look at the bigger picture of tax consequences, special opportunities for the children, and overall family security we were able to meet the needs of everyone.

So, if you are facing a negotiation take a moment to plan.  Identify what the issues are that must be addressed.  Set an agenda for the negotiations.  Then think a bit about what you want and why you want it.  Next think about what the other side most likely wants and why they want it.  You have now identified the issues, the positions and the interests.  The first step is done and you are ready to start to explore the possible resolutions as part of step two.