Interest Based Negotiations – Part One

Interest Based Negotiations – Part One

There are two essential paradigms of negotiations; position-based and interest-based.

We are born with the natural human behavior that leads us towards positional bargaining. Put two toddlers in a room with toys and sooner or later there will be a negotiation between the two. MINE! NO MINE!

In position-based negotiations, substance is important. Both parties focus in on the actual item being negotiated. The other party is seen as the enemy. Each party tends to be self-serving in an attempt to see victory over the other. They push for their own predetermined solutions, and if they concede, they see themselves as losers. The problem in position-based negotiations is that it often breeds resentment. If you win in a negotiation and the other party feels as if they lost, they’ll walk away resentful and they’re probably going to attempt to get back what they lost one way or the other. If your relationship is going to continue with the other party for a long time, such as raising children, a win-lose outcome in negotiations may plant the seeds for resentment and continuous conflict.

The first lesson we learn in the Collaborative Process is that the feelings of both parties matter.

In interest-based negotiations, substance is still important; however, the importance of the relationship is of equal or greater importance. In interest-based negotiations, the intent is to reach a mutually acceptable outcome, something that is mutually beneficial to both parties. The negotiation is successful if the interests of both parties are being met. If a problem does emerge, the parties are hard on the problem and not on the person. And if they do yield, people yield to objective criteria, something that both parties can agree to as being legitimate and fair. The outcome of an interest-based negotiation is one where credibility is built between both parties as they develop a relationship of trust.

All negotiation methods should be judged by three criteria:

  1. It should produce a wise agreement if agreement is possible.
  2. It should be efficient.
  3. It should improve, or at least not damage, the relationship between the parties.

In typical negotiations, each side picks a position and argues for it, making concessions to reach a compromise. This type of positional bargaining fails all the criteria:

  1. It produces unwise outcomes. Parties are entrenched in their positions...making it less likely that any agreement will wisely reconcile the parties original interests. Energy is paid to positions vs. meeting the underlying concerns of the parties.
  2. It's inefficient. Bargaining over positions creates incentives that stall settlement. This is why we often enter positional bargaining with an unreasonable proposal hoping we may meet half way in the end.
  3. It endangers the relationship. Positional bargaining becomes a contest of will, resulting in anger and resentment when a side bends to the rigid will of the other while its own legitimate concerns go unaddressed. Bitter feelings are difficult to heal.

The answer to the question of whether to use soft positional bargaining or hard is "neither." The Harvard Negotiation Project has been developing a method of negotiation explicitly designed to produce wise outcomes efficiently, called principled negotiation or negotiation on the merits.

It has four basic principles, which are relevant from the time you begin to think about negotiating until the time either an agreement is reached or you decide to break off the effort. That period can be divided into three stages: analysis, planning, and discussion.

1. Separate the people from the problem.

Human beings are not computers, and emotions typically become entangled with the objective qualities of the problem. Taking positions makes this worse because people’s egos become tied to their positions. Making concessions "for the relationship" is equally problematic, because it can encourage and reward stubbornness, which leads to a poor outcome and resentment that ends up damaging the relationship.

Before working on a problem, the "people problem" should be disentangled from it and addressed on its own. The participants should come to see themselves as working side by side and attacking the problem, not each other.

2. Focus on interests, not positions.

Good agreements satisfy underlying interests, yet most often, participants focus on stated positions. A negotiating position obscures what you really want, and compromising between positions is not likely to produce an agreement that will address the real need that led people to adopt those positions

3. Invent multiple options looking for mutual gains before deciding what to do. 

It is difficult to design optimal solutions while under pressure. Trying to decide in the presence of an adversary narrows your vision. Having a lot at stake inhibits creativity. So does searching for the one right solution. These constraints can be offset by setting a designated time within which to think up a wide range of possible solutions that advance shared interests and creatively reconcile differing interests.

Before trying to reach an agreement, invent options for mutual gain.

4. Insist that the result be based on some objective standard.

When interests are directly opposed, a negotiator may be able to obtain a favorable result simply by being stubborn. You can counter such a negotiator by insisting that his single say-so is not enough and that the agreement must reflect some fair standard that is independent of the opinions of either side. Neither party need give into the other; both can defer to a fair solution.

The primary principle of interest-based negotiations is to get a good understanding of both partys’ interests and to develop or invent creative options that will meet those interests. This approach increases the chance of establishing a good relationship with the other party and achieving outcomes that are mutually beneficial. Criteria of fairness and legitimacy are used to establish standards both parties can agree to. Having a good alternative to walk away from is equally important. Finally, effective communication is absolutely critical.

Positions and Interests

A position is what you decide you want in a particular situation. It’s a predetermined and specific solution to a problem you want to solve or a need that must be met. It may be the amount of money that you want. It may be the way that you want work to be done. It may be about the type of equipment that you need and so forth. Behind every position is an interest. An interest represents the needs or wants that motivated you to select the item you want to arrive at your solution. Interests are often rooted in human needs. When you tell the other party what you must have, you are taking a position. When a person or group becomes overly focused on their position, they can become entrapped. Entrapment is a process in which an individual becomes overly committed to a course of action as the result of having invested time, energy, self-esteem, pride, and can lead a negotiation to a stalemate.

Part Two of our three part series will focus more on the four steps of the Harvard Negotiation Project.

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