Category: Negotiation

Taking the Third Step

3rd step bowling

Many a man had taken the first step. With every additional step you enhance immensely the value of your first.

Ralph Waldo Emerson

So now it is time to take the third step in preparing for negotiations.  You have identified the issues, positions and interests of your situation in the first step.  You have brainstormed possible options to resolve the situation in the second step.  Now you must roll up your sleeves and dig into some research for this third step.  In my experience this is when many people become overwhelmed and try to move right into the negotiations.  This is a mistake, because the information that you gather in the research step will allow you to properly evaluate your options and develop your strategy for negotiations.   In today’s technology age almost anything can be researched fairly simply online.  We will look at some of the simple ways to find answers and evaluate options through some basic research, most of which is free and or inexpensive.

In our example in article two we considered a family looking for solutions if Mom is having trouble with driving.  Below is a chart of some of the research tools that can be used to evaluate each of the options that we identified:

Options to Consider / Google terms Research tools to find answers
Hire a driver Google taxi services in your area

Google “drivers for seniors” for local free or low cost services

Find ways to make driving safer for senior www.aarp.org

www.aaa.org

www.safeandmobileseniors.org

We can drive for her www.ourfamilywizard.com provides calendars to keep track of family activities such as doctor appointments and plan who will drive
She can take the bus Google local bus routes
She can travel with friends Talk to her companions and friends to see if other’s can drive. This step in the research may have to wait until after you have spoken to Mom if you do not know her companions well.
We can have other’s bring things she needs to her www.mowaa.org

google in-home companions or elder companions

She could move to a community with more local services or transportation Google independent living in your area

 

If you are facing a negotiation over an offer for a new job, you would want to research similar jobs to the one you have applied for.  You want to determine what the average salary is in your area.  You may do this by researching market surveys online or by speaking to friends or mentors in the area of the employment you are considering.  You want to look for ranges of starting salaries as well as other benefits that you have determined are important on your options list.

If you are involved in negotiations to resolve a legal case such as a divorce the research may become more complex.  You have three general areas to research before you enter into negotiations.  These are (1) the basic facts of your case such as the value of your assets and school calendars to develop parenting plans (2) the law as it applies to your case and (3) the costs involved in litigation if the case does not settle.  The first area is conducted the same way as the research outlined above.  You use the internet to research each option you have developed.

In some cases the information that you need to assess possible solutions may not be in your control but may be in the control of the other party to the litigation.  This is when attorneys use one of the most powerful tools in their tool box to obtain the information needed.  This type of research is called “discovery”.  We can do this research through depositions (asking the other side and witnesses questions while they are under oath and in front of a court reporter), interrogatories (similar to depositions but asking the other side or witnesses questions in writing and asking them to sign the answers under oath) and “requests to produce” (asking the other side to produce documents that they may have in their control).  We may also engage experts such as appraisers, accountants, vocational experts, mental health experts and medical experts to pull together the information and to evaluate our case to have a better understanding of the facts for settlement or trial.  If you are involved in a legal dispute, you have to decide if you have enough information about your case and the other side’s case to complete the mediation before the discovery is completed.  Many times it is possible to know enough to evaluate your options without all of these formal discovery methods, although this discovery may critical to presenting your case at trial.

Another area that you must be prepared for in the case of legal disputes is an understanding of how the law will be applied to the facts of your case.  Attorneys are specially trained in conducting legal research and evaluating the likelihood of success in specific cases.  It is always advantageous to be familiar with the law as it applies to your case, in order to know what your “best day” and “worst day” in court could be.  This gives you structure and parameters to your negotiations that would not otherwise be present.  It is important to remember that an understanding of the law does not necessarily confine you to the remedies that are provided for by the law.  There have been countless times that I have represented clients who wanted a specific outcome in a case and I had to tell them that their preferred “option” to resolve the case was not possible under the law.  For instance the parents may agree that paying for college education for their child is important even though the law in Florida only requires support of children through eighteen years of age.  While the Judge could not order this solution the parties may, through negotiations agree to include this in their settlement agreement.

Finally, you should evaluate the costs associated with selecting different options.  In order to evaluate how efficient an option is in meeting your needs you must be able to examine the costs associated with the option.  In the case of a legal dispute such as divorce you should consider how much the trial is going to cost you if you do not settle.  You must have a frank and honest discussion with your attorney to determine the costs of litigation.  While attorneys can rarely give a guarantee about the costs as these are often determined by the facts of each situation and the actions of the other party, they can estimate how much is necessary for specific activities such as a full day deposition or the retainer for an expert.  As indicated above, the costs of formal discovery can be quite high.  While you may be able to mediate a resolution after conducting your own research on the options you have developed, your attorney will be able to explain how the rules of evidence may require more costly discovery to actually prove your case in trail.

In addition you should consider the costs of alternatives to settlement in terms of time missed from work to attend hearings, depositions, and trial.  Another “cost” that is often overlooked in legal disputes is the anxiety of remaining uncertain about the outcome and living in the adversarial morass of litigation.  While you may not be able to put a dollar figure on it, there is certainly an emotional and psychological benefit to reaching a resolution and being able to move on.  This benefit may have a higher value than any of the costs associated with agreeing to certain terms of settlement.

As you can see, the research step in negotiation preparation requires time and a commitment.  The more thorough a party is in conducting the research the more prepared they are when entering into their negotiations.  I have too often seen mediations be delayed because the parties could not agree upon the value of an asset or the feasibility of a rehabilitation plan for a party.  The time spent on this step can expand possible options, organize strategies for resolution and save time in the actual negotiations phase.   Knowledge is power.  By doing your homework you are in a more powerful position as you enter the next step of negotiations.

For more tools for research in specific areas please visit my website, www.odayresolutions.com.

Taking the Second Step

brainstorm

“It is better to have enough ideas for some of them to be wrong, than to be always right by having no ideas at all.”  Edward de Bono

So, now you have taken the first step in preparing for a negotiation: you have identified the issues that need to be addressed and the positions and interests of the parties involved.  You are still in the preparation phase but now you are ready for step two.  This is the fun step, but don’t get carried away.  Now you are going to think creatively.  We mediators like to say, “think outside of the box”.  You are going to identify the possibilities for solutions to the issues.

To do this you consider ways to meet the interests that you identified in step one.  Let’s consider an example of a problem that faces many families:  The adult children are worried about mom continuing to drive because she has some significant physical limitations and had a traffic accident last week.  Your sibling called you up and said “We need to talk to mom about taking away her keys, she shouldn’t be driving.”  (You know by “we” your sibling really meant “you” need to talk to mom.) You agree that there may be a problem but you also know that Mom will resist any effort to stop her from driving.  You have identified the issue: Mom’s driving.  You have identified the children’s position: Mom shouldn’t drive any longer.  And you have identified Mom’s position: I can continue to drive without a problem.  You have also identified the interests: Mom needs (1) to be safe and (2) continue to have an active and independent lifestyle.  Now, for step two, you want to consider options that will allow Mom to still live independently and allow her to safely get around town.  You may consider options such as (1) we can hire drivers, (2) we can see if there are ways to improve her safety when she does drive, (3) we can drive for her (4) she can take a bus to her favorite spots, (5) she can travel with neighbors and friends to her favorite outings, (5) we can have delivery bring things to her that she needs (6) she could move to a residence that has more activities “in house” and limits her need to drive.  Are there any other options to meet the identified interests?

This is the brainstorming time.  The more input you can have the better. Sometimes it is good to talk to friends, family, mentors, and trusted advisers so long as you can limit the talk to brainstorming options and not just arguing over positions.  You do not want to take anything off the table when you look for options to solve the issues.  Often it is good to write down the list as fast as you can without stopping to evaluate each idea.  This opens up the creative juices and allows for limitless thinking.  In the next step you will research if any of the options are possible but here you just want to consider as many options as you can think of.  With research you will be able to evaluate the costs involved to implement any of the options.  As you do the research in phase three you may develop new options or find that some of the choices need to be reworked or eliminated altogether.  For now though, do not limit yourself to what you think is possible or to “good” ideas.

This is also the time to look at what would happen if you don’t reach a negotiated resolution to the situation.  In negotiation parlance this is called your “Best Alternative to a Negotiated Agreement” or BATNA.  This theory was developed by Roger Fisher and William Ury in the book Getting to Yes: Negotiating Agreement Without Giving In (Penguin Books, 1981) and is used to train the top negotiators at Harvard.  To consider your BATNA, you consider the options available to you if you walk away from the negotiations.  In the situation of Mom continuing to drive, the answer may be that if the family cannot reach an agreement then no action will be taken and Mom may have another more severe accident.  In the case of a negotiation for a job, the answer to your BATNA may be that you have to continue to look for employment (a weak option) or you may have the option to take another job offer (a stronger option).  As an attorney we look at this question as “what is your best day in court” or what is the most favorable outcome if you take the case to trial.  In legal negotiations we always consider the possible outcomes of going to court as a possible outcome if the case does not settle.   In the next step we will look at what this costs in terms of time, money and anxiety.  For now, you need only consider that one option to solve the problem may be a trial.  The research phase in step three is where we evaluate the BATNAs.

You also want to consider the other parties possible outcomes if there is no negotiated settlement.  Often the other party’s best alternative to settling may be your “Worst Alternative to a Negotiated Agreement” that is, you guessed it, your WATNA.  (Also developed by our friends at Harvard.)  In legal parlance this is “your worst day in court”.  You should consider this alternative as well.

So, now you have completed your second phase by looking for all options that you may have to resolve the issues that you have identified and to meet the interests of everyone involved.  As you continue on the path of negotiations you may need to come back to this step.  It is important to remember that negotiations are a fluid process not a one way road.  While you are constantly heading in the right direction you are not just checking things off the list and moving on.  In step three you will evaluate the options you developed.  Once you actually start the negotiations with the other side you may come back to all of the options you developed and re-evaluate them.  But for now, by listing as many options for resolution as you possibly can, you have prepared to research the effectiveness of each option.  This then allows you to be in a stronger position to open negotiations with a goal of finding solutions rather than perpetuating conflict.

Taking the First Step in Negotiations

baby first step

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.

Knowledge is the Key to Great Negotiations

In less enlightened times, the best way to impress women was to own a hot car. But women wised up and realized it was better to buy their own hot cars so they wouldn’t have to ride around with jerks.  

Scott Adams, American cartoonist

I am thrilled to be facilitating a workshop at the 21st Annual Conference for ADR Professionals: “Expanding Our Horizons” on August 9-10, 2013, at the JW Marriott Grande Lakes in Orlando, Florida.  My Workshop is “Diversity: Delights and Downfalls”, a session that will explore in particular age and gender issues in mediation.  In preparing for the session, I have been reading a lot of articles and research papers about women in negotiations.

One such article, published a while ago but that came back to my attention with this research is a story that ran on NPR in January 2012: Women’s Car-Shopping Tactics Steer Them Toward Better Deals by Dana Farrington.  The main point of the story was that women were often getting better deals than men in the traditionally masculine realm of car buying.  According to the article, the reason that women are doing so much better at getting good deals in the car dealership is because women over research the event before being approached by the salesman.  Women had researched the details of the car, price, and financing terms and were in fact over prepared for the purchase.  By the time they enter the dealership they are not “browsers” but rather well informed buyers.  Because of this, they are prepared to negotiate a reasonable deal for this substantial purchase.

The reason I bring this up is not to further divide the genders.  Rather, the lesson to be learned here is perhaps the most important  lesson in any negotiation or mediation for everyone.  The most critical time of every negotiation occurs before you enter the room.  The most important investment is the time spent preparing.  Every time you enter into a negotiation the importance of the outcome  should be equal to the investment of your time in preparing.  If you are negotiating what movie you will see with your spouse, you may want to investigate the basic synopsis and reviews of the latest blockbusters.  If you are negotiating the terms of your divorce from your spouse you want to do a lot more research on parenting issues, values of assets and liabilities, income potentials of both of you and your partner.  If you are negotiating an international trade agreement, the research will obviously be incredibly complex and detailed.

As a mediator, the greatest downfall I see in mediation conferences is the lack of preparation by the parties.  You cannot expect favorable outcomes if you do not invest the time in detailed preparations.  This is why you should be as well prepared for the informal mediation process as you would be for the formal litigation process.