In order to negotiate an effective agreement, it’s important to understand the elements of negotiation. The what (issues), why (positions), and how (interests), are three elements present in every negotiation. Together, they provide a basic outline from which your strategy will evolve. What are we negotiating, why are we opposed and how can we meet in the middle?
When strategizing a negotiation, your focus tends to be on best and worst-case scenarios, sometimes before you’re even aware of what issues may arise from the other side. As author and editor Jeff Hagen points out, “negotiation skills are communication skills.” This is an important point because as we’re trying to navigate the negotiation, how we’ll identify the what, why, and how, will be based on how effectively we communicate with each other.
Element of Negotiation #1 | The Issues
Issues are the identifiable and concrete concerns that must be addressed to conclude a negotiation successfully; they should be tangible, measurable, and set the agenda. In a workplace setting, you’ll find a few common issues: personality clashes in team situations, salary negotiations, lack of effective leadership, and scheduling time away. Issues are what brings us to the table.
Did you know that almost half of us don’t negotiate salary offers? It’s staggering when you find out those who do negotiate an initial offer make up to five-thousand dollars more a year. If you’re looking for issues, you just found them.
Generally, issues are divided into three categories:
1. Distributive
Distributive issues are often referred to as “fixed pie” issues, because they can’t be made bigger or smaller. You may have this in an inheritance where the amount of funds to be distributed is finite, the two parties have to agree to divide in a way where both parties leave with something. Most people approach all their negotiations as if this were the natural way of things, but often, it is not, and more value can be added.
2. Congruent
Congruent issues are those in which both parties want the same thing, or more simply, they’re on the same side. These issues don’t often make it to the negotiation table, or at least, there are no stated objections. You want whatever is being offered, and it’s being offered because they want you.
3. Integrative
Integrative issues are those in which a combination of issues may make both sides happy. This happens frequently in negotiations with multiple issues on the table. For example, a group of employees comes together to protest several issues within their shared workspace: restrictive work from home policies, too many people assigned to a single work area, equipment in need of upgrades and inflexibility with taking time off. Together, with their negotiating partner, they may discuss the issues in depth, brainstorm realistic solutions or goals they can work toward, and hopefully agree on mutual ways to ease the strain the issues have placed on all of them.
Element of Negotiation #2 | Positions
Positions are the definable perspectives on the issues of the negotiation; the parties’ suggested means of dividing the value dispute. More simply, your negotiation position is what you want, as well as what you don’t want to give to the other side. A novice typically takes these positions at face value – a company provides you with a salary offer, you take it. Competitive negotiators know all too well the value of their position, so they don’t want to allow another position at the table.
Positional bargaining is all about setting your position in stone and refusing to budge. In contemporary retail outlets, we see a price on a piece of clothing, furniture, or piece of jewelry and we understand that to be the price. We don’t haggle. At some point higher up in the chain, there may have been a negotiation, but by the time it gets to you – it’s the end result. There may be a discount when you purchase a certain amount of goods, or if the item price meets a certain threshold, and we may go out of our way to get these discounts but the price of the items isn’t up for debate.
In a traditional market situation however, and arguably more popular outside of the US, it’s common to negotiate on every price.
Element of Negotiation #3 | Interests
Interests are the abstract needs that must be satisfied to complete a negotiation. They tend to be less tangible and measurable but are very real to the parties involved. Whether objectively identified or not, these must also be satisfied before bargaining is successful. An experienced negotiator will dig deep into their partner’s often unspoken positions to find their real motivation.
In fact, the real interests of a negotiation — respect, experience, unique qualifications — can be masked by a variety of other issues like avoidance of confrontation, an inability to concisely express their position, and intimidation. And though you can’t read the mind of your fellow negotiator, knowing and understanding common interests as well as honing your ability to effectively communicate, will help you become more discerning.
There are many types of interests that must be satisfied in a negotiation such as process, substantive, relationship or interests in principles, and they typically link back to our emotions, or how we feel about certain things.
In his book Beyond Reason: Using Emotions as You Negotiate, conflict resolution expert Daniel Shapiro identifies issues as “core concerns” defines them as “appreciation, affiliation, autonomy, status, and role,” and they divide up a little like this:
Appreciation – You meet this issue, or concern, when your thoughts, feelings and actions are acknowledged as having merit, and fail to meet it by devaluing them. It’s important to consider these concerns from both the perspective of your negotiation partner and yourself.
Affiliation – You meet this by treating your fellow negotiator as a colleague or peer, someone with whom you feel comfortable. You fail to meet this when you treat or are treated as an adversary.
Autonomy – When you have the ability to decide the important issues in a negotiation, you have autonomy; if you’re having to go back to your client with every point you may feel hamstrung when trying to work with your partner on effective solutions. This is especially challenging if one partner has autonomy and the other doesn’t.
Status – “Status refers to our standing in comparison to the standing of others,” Shapiro says. Acknowledging the work or reputation of your negotiating partner is such an easy way to create an immediate and genuine rapport, especially if you’re coming into a negotiation as a novice.
Role – Your role pertains to your role within the negotiation. We see this a lot in television, where someone is essentially asked to be more aggressive and finds themselves to be completely awkward in the task. Aggressiveness doesn’t always equate to a better negotiation strategy, and if your role doesn’t feel authentic to you, it can damage the negotiation. Your goal in any negotiation is to occupy a space where you can be most effective.
How do these loop back around to the interests in a negotiation? As we focus on these concerns and underlying “issues” – we create positive emotions because our negotiation partner will feel respected, comfortable in their role and able to make decisions that will satisfy the ultimate agreement. As Shapiro points out, “You reap the benefits of positive emotions without having to observe, label, and diagnose scores of ever-changing emotions in yourself and others.”
Level Up Your Negotiation Strategy
Understanding the elements of effective negotiation will help you go into your next negotiation with confidence. The ability to identify the issues, and seek out and understand the positions, motivation and interests of your negotiating partner provides not only an upper hand in steering the negotiation, but also a better chance at a mutually beneficial end result. As we’ve learned, negotiation isn’t always win or lose, especially when you have to maintain some semblance of a relationship in the future.
The Lowry Group, LLC (TLG) is the outgrowth of almost three decades of experience helping organizations achieve their next level of success throughout the United States and around the world, including conflict resolution. TLG’s work began as an external consulting, systems design, and training resource composed of faculty from the Straus Institute for Dispute Resolution at Pepperdine University School of Law.
But TLG has moved beyond its academic roots to respond to repeated requests from corporate and government organizations for “real world” assistance. The TLG team has been chosen by scores of major organizations that must become more effective in negotiating sales, business transactions, client relationships and disputes.
What makes companies and individuals truly successful is the ability to ably manage negotiation. We created resources you need to identify, resolve and manage negotiation. From CEOs, to small business owners, and to anyone managing a team – developing the skills to navigate negotiations is not just important, it’s imperative. Managing negotiations is a cornerstone not only in conflict resolution but also in understanding the psychology of business relationships. Learn how to up your negotiation skills with the Negotiation Navigator Online Course!
