Transcript

This is the NegotiateX podcast show number 3. Now I remember learning about this model of west point and I remember how simple and how applicable it was basically to any of the negotiations that we encounter.

Yeah I think that's really key. How do you create something that can handle the complexity of a variety of issues in a variety of different industries and contexts and yet at the same time is simple enough to actually put into practice and I think that's the brilliance of this framework is its ability to be used by practitioners.

You're listening to NegotiateX radio helping you elevate your influence through purposeful negotiations, if you're here looking to learn about how to become a better negotiator in both business and life then you're in the right place. Stay tuned and be sure to join the others who have benefited from the NegotiateX.com: your home for negotiations training and consulting online.

My name is Nolan Martin, I’m the co-host of the NegotiateX, podcasts and with me today is my good friend and colleague, co host, incomprehensible name. How are you doing today Sir?

I'm great Nolan thanks and I hope everyone out there is doing well today too.

We're in the DC area and we just had snow last week but it's basically all melted away I know you're in New Hampshire, do you also have snow?

Oh yeah do we yeah we do we have and we've been we've been playing in it and we've got more coming this week, so the benefits a living up in North Country.

Yep. All right so today I am extremely excited because we're going to talk about the framework for how we think about a negotiation and the framework is extremely important, it drives how we prepare for negotiation, choices for conduct during a negotiation, how you measure success in the negotiation and even how we review our negotiation.

Yeah that's right Nolan and let me add that we didn't create this framework -- a lot of what we're going to talk about comes out of getting to, yes, which I couldn't and still consider to be the seminal work on negotiation as it hits 40 years old this year and then refined by our colleagues advantage partner who we partner with and we're so grateful to be able to use some of their intellectual property but they refined it over last 25 years, you can find more this and some work such as Getting Ready to Negotiate by Roger Fisher and Danny or Tell and the HBR guide to negotiating by Jeff Weiss.

And for all of our listeners this is, you know, a lot of great resources that Aaron just threw out there. If you are interested in reading any of these books and didn't get a chance to write that down, it's okay -- go to NegotiateX.com/3, in the show notes they will post all the resources that we discuss today. Now I remember learning about this model west point and I remember how simple and how applicable it was basically to any of the negotiations that we encounter

Yeah I think that's really key. How do you create something that can handle the complexity of a variety of issues in a variety of different industries and contexts and yet at the same time is simple enough to actually put into practice and I think that's the brilliance of this framework is its ability to be used by practitioners.

Yes so I like that it's only 7 things right, so whenever we look at a lot of frameworks and especially complex ones it tends to be astronomical with the different things that they throw in there. In the military we have the span of control, we basically try to keep it between 3 and 5 so although 7 is just outside of that, I still think it's a lot more reasonable for people to grasp and people actually use.

Yeah trust me I've seen 28 element or component models and 40 component models, they look real pretty on paper but they’re bees to try to actually put into practice and that's one of the reasons I'm such a believer in the framework that we use.

Yes so our predecessors named the framework the 7 elements of negotiation, so why don't we discuss that? Basically what they are, what they're used for, to understanding the process of negotiations?

Yes so let's start with what they are and then maybe as we kind of give folks some takeaways from they will talk about why they're important how they can be used so the 7 elements of negotiation are: relationship, communication, interests, options, legitimacy, alternatives and commitment.

Yes the relationship seems pretty obvious so I think we start there, it's either you have one or you don't. So what else goes into that framework?

So at the macro level I thought to think of a relationship as considering the levels of respect, rapport and trust between the parties involved and be able to measure the levels of those things that we need to be able to work more effectively together, so we can certainly acknowledge there are times when the relationship is transactional because – ‘not going to see this person again’, ‘not going to interact’. And additionally there are many times when we need a long term relationship, maybe because there's going to be repeated interactions or negotiations with the same party or maybe simply because to implement the agreement -- we're going to need a strong relationship.

Yeah and I would assume the reputation we are constantly building is by how we are actually negotiating with this partner, even the industry is a consideration as well, I think it's important to kind of understand -- [how is] how are other people even outside of this negotiation going to view how we basically conducted it, because words going to get out, that you know, youeither play by the rules are you don't.

Yeah absolutely, reputation is a critical component of relationship and I think it's important remember that relationships are built through how we interact and treat the other party, how we share and discuss information, so how we behave and our advice would be to consider the nature of the relationship now think about what it is we want it to be or needed it to be going forward and then purposely act and purposely practice strategies that are going to build the relationship we want going into the future.

All right and let's move on to communication, I know this is just speaking the same language and involves information and how you're basically describing what you are negotiating -- position you take on a specific negotiation, so what other sorts of things do you put under communication?

Yeah so communication is really what information we're sharing, how we're going to share it and it's, you know, are we hiding it, are we revealing it over time, if so when. It's those sort of decisions. It's also how we gather the information, so that the process of good genuine enquiring, asking you know penetrating questions to really dig in and understand how the other party sees it, what are their perceptions and what are their perspectives and then being able to practice really good acknowledgement, showing the other party that I understand where you are, that you’ve been heard and that those things can happen without agreement --acknowledgment is understanding without agreement and then certainly being able to clearly and articulately share our own perspective and advocate for what we believe needs to happen.

Yeah I remember you sharing that communications involve processed decisions, so what sort of things do you include there?

Yeah so really, relationship and communication combined or what we call : the gateway elements or the process elements, they set the conditions for a for an effective negotiation and so, you know, negotiations are going to benefit from good clear direction and under communication, I would include things such as being real clear on what our purpose is for getting together today, what is our agenda and being able to align early on the agenda, commit early to the process we're going to follow, are there any ground rules that we should establish to help us and then be able to say, hey are there other folks we need to have in the room now or have in the room over time, what's our desired end state, what's the product we're trying to come out of here and so on and all those things are going to fall underneath communication and be incredibly helpful moving forward.

All right so we just wrapped up communications and relationships, now we got 5 more to go, I understand that interest are the reasons people negotiate, so how are they any different from the demands people make or positions they take in the negotiations?

Yeah so as we get into interest, I mean you set it up great, we're going to talk about the value creation elements, interest leading into options leading into legitimacy and a key aspect of what came out of getting to yes was this distinction between a person's position, the things they say they want and their interests -- the underlying needs, fears, concerns and motivations that are actually driving those positions. Positions are singular and what that means is there's really only one way to resolve them. Interest, however, can be solved in many different ways. Positions are almost always opposed between the parties involved, the positions are going to almost be always opposed and they're going to require both sides to give something. Interest however may be opposed but more often what we find is interests are shared or different. Positions are typically tangible, they are on the surface there things we can see; interests involve tangible needs certainly and they include emotional and psychological needs of the negotiators. So by understanding both our and the other party's interest, we can open the aperture so to speak on what we might be able to do together or need to do together to satisfy those concerns.

A simple example of positions versus interest might be, you know, buying a car. The position is a specific car for that price of, say, $19500 or so, you either get that car at that price or you don't and so the interest might be reliability and warranty, total cost of ownership, good gas mileage, safety and so on.

Yeah that's right. So as you uncover, both, like in that case, the buyers or sellers interest, you're able to work together to find creative solutions to satisfy both sets of concerns and these are what we call options, the things we might do with our counterparts to resolve the situation.

Yes so I remember when I had to study for this in school and I had to remember that O for options means on the table and I know that's different from alternatives, which will get here in a minute, but basically, both parties have to agree to these solutions right?

Yeah that's right, so let me share a quick story as an illustration. This comes up in getting to yes but imagine for a moment you know, I am a father, for us we don't even have to imagine that and as we've talked about before you know I have 6 great kids but imagine I walk into our kitchen one day and my 2 oldest girls are fighting over the last remaining orange that would that we have in the kitchen. And they're jumping at each other “I want the orange” “no I want the orange”. The older ones a little taller so she's holding it up over her head and what do I do, not wanting to continue this loud noise confrontation in the wisdom of Solomon I grab the orange I slice it in half and I give them both half and I think for a moment that I have been victorious, unfortunately right I have just facilitated the negotiation around positions, I want that, no I want that, and my solution was a positional solution you each get half. If I take a moment and I watch my daughters, what I will learn is that my oldest really wanted a whole orange because she was hungry, she was having a blood sugar drop and she really needed the sugar from entire orange, so she carefully peels her orange and then throws away the peel and eats the fruit, she walks away disappointed because her interest didn't get fully met, and as I watch my other daughter and she carefully piece peel the orange and throws away the fruit and then she takes the rind or skin of the fruit, she grates it and she makes some orange chocolate brownies that she had promised her teacher she would bring in, but she's disappointed because she had promised to bring in a whole plate of brownies, now she can only bring half a plate and she's going to have to break her promise, there’s going to be disappointed students in class and so forth. So again her interests aren’t met and this is the idea of understanding the underlying interest to really solve the problem and then if we get creative, right, we can certainly get creative and say well obviously you would give the one daughter the entire fruit, the other daughter the entire peel, that's one option and if we were to say what other options are there, well maybe the girls could squeeze some orange juice, sell it to other siblings, make enough money to go buy a whole bag of oranges and now they both have a lot more fruit and a lot more peal to make a lot more brownies and a lot more juice, they might be able to auction off the orange working together. It's the idea that by understanding the underlying problem -- we can actually get creative and come up with a solution where neither side has to compromise and both sides walk away with their interests met.

So if options tell you all the things you could do to satisfy interests, how do two parties know what they should do?

Yes that's a great question so once we have brainstormed and emphasis on brainstorming there, the number of things with what we can do together to satisfy our interests, [the way] all the ways we can resolve a problem, you know, and as you said ‘O for on the table’ both parties have to agree to these things so options are on the table, well then we need a way to be able to evaluate them on some sort of objective criteria, and these are what we call standard of legitimacy and they include things such as president/precedent, law, market, practice, industry, benchmarks and so on. So we should imagine that both parties are going to have to defend their solution to their toughest critic, a colleague, a constituent, who's going to ask them -- why did you agree to that, why does that make sense, so legitimacy is what's going to arm us with the ability to do that, to be able to say, this is why this option or this series of options were a better choice.

You mentioned precedent there, so what do we do if there isn't a precedent, you know, you and I have been in different situations, where we essentially are establishing the standard because this is the first time of us doing it. So what do you do if there's no precedent?

Yeah we sure have and I know that you know we can probably think about some mistakes we've made working in those situations where there wasn’t a good president and we certainly have seen our colleagues do that. So in those situations it takes tremendous wisdom and consideration of the standard you and your partner want to set for the future, it's not only going to impact how the 2 of you operate and negotiate going forward but it's also going to impact future negotiations you both have with other counterparts.

Yes so now we are basically on the last 2 steps of the 7 elements of negotiation, alternatives and commitment.

Yeah these are what we call the decision elements, right, so if I were doing a quick review: we had the gateway elements, we had the value creation elements, and now we have the decision elements and I've been intentionally left these 2 to the very end and the reason for that is that when most people think of what a negotiation is it's really these 2 elements they’re thinking of. They try to either get someone to make a commitment asking them what they will or won't do. And then they leverage threats or tell them or think about what their walk away is, if they can't get the agreement, so I like to think of the dynamic between these 2 elements, alternatives and commitment just a little bit differently.

Yes so how's that?

Okay first of all, that we don't negotiate to reach an agreement but rather to create a good choice for ourselves between our alternatives and making the commitment with the party or the table with and to make sense of that, let's dig into what these 2 elements are. Alternatives are: ‘A away from the table’ – ‘A for away from the table’. Away from the table alternatives. Right these are all the things I can do to satisfy my interest that don't involve the person I'm negotiating with, that's different than ‘O options on the table’ that require the participation and agreement of the party you’re negotiating with. And I really realize that these are synonyms in everyday language, we're distinguishing between the 2. So alternatives are all the ways I can get my interests met: doing something internally maybe, doing something with another counterpart, not doing anything at all, these are all alternatives that the person I’m negotiating with, doesn't get a say in. Commitments are when we select an option or pieces of an option to move forward that satisfy our interest really well, that are very defendable, that we feel are things that we can actually put into practice and then the commitment is how will we implement this based on what is the follow up and so forth. And so when we negotiate, we're negotiating for the choice between our best alternative to a negotiated agreement, what we call our ????? and the commitment we can make with the person we are at the table with.

Yeah I think, you know, going back to what we always talk about and that's elevating your influence through purposeful negotiation, you know, anyone can negotiate an outcome but is it a good choice in the agreement, I mean it's a pretty powerful difference, just arriving at a solution and arriving at a good solution are 2 very distinct ways to get there. I see many young officers make the mistake of agreeing to something that they probably should've walked away from, because it doesn't satisfy their interests, it isn’t a very creative or it's not defendable.

Yeah I have too and certainly in the corporate arena as well, someone will commit to something that actually creates headaches for the person who has to implement it because based on, you know, whatever, an unreasonable profit margin, you know, a crazy quality level or timeline that's not reasonable, whatever it might be. Let me just add here too, that when we think about commitment it's helpful to also consider both for ourselves and for the person we're negotiating with -- what's the level of commitment appropriate for this meeting, is it tentative draft, is it a handshake agreement, is it a list of questions for going back to senior leadership to clarify what we can do or is it a firm sign deal, right really think about what's the level of a commitment we wanna reach today and what's our level of authority as well as theirs, to be able to actually follow through on that commitment and this kind of drives some of the things we talked about under communication but you know at what point do we need to bring other people and what point do we need to consider escalation, one of those things appropriate.

I know that these are a lot of definitions especially for the listener who may be driving to work right now. What we have is the NegotiateX prep tool and so what it does is it breaks down the 7 elements into basically how you can conceptualize the negotiation that you're going into, it helps you basically think of alternatives, think of interests, realize what decision making power you may have or even the person you're negotiating with may have, basically breaks down everything, it’s the most influential tool that I know of, at least negotiation, so you can find that tool if you go to NegotiateX.com/prep or if you go to NegotiateX.com/3 to find the resources. So with that, Aaron, this is a podcast it is all about delivering value to your organization and your business, and your life, so what are some key takeaways for our listeners today to become more effective negotiators?

Yeah, thanks to Nolan and this kind of gets to, why is understanding this framework so important. Most negotiators use 1 or 2 levers and they can use the same elements in negotiation, 1 or 2 elements of negotiation and if we can recognize the elements that we typically use and where we get stuck, well maybe we can find ways to intentionally bring in the other elements into our next negotiation, and I think it's helpful, even heard me slip up just a moment ago and call the 7 elements the 7 levers, I like to think of them as levers of power and as I utilize more elements in my negotiation, I can become a more powerful negotiator. Let me also say that, as we use these elements, we want to remember to use these elements in a way that they're congruent with each other, they're congruent with the situation they we’re negotiating and the congruent with who we are as negotiators and as people.

Aaron I appreciate your time today on show number 3. To our listeners, head over to Apple podcasts, wherever you listen to this podcast, give us 5 stars, leave us a comment and this is going to help other negotiators find the channel, find the show, and essentially you know deliver value to their organizations. So that is it on today's podcast. If you need one on one help, we can help you out. If you negotiations consulting or training for your team, we can help you out, all you have to do is go to NegotiateX.com/services and there you'll be able to see all the different service offerings that we have to essentially help you and help your team achieve results. So if you have any questions or you want us to cover a specific topic in the future, just shoot us an email at team@negotiatex.com, we'll try to cover it in the future episodes and with that we will see you in the next episode!

Thank you for listening to NegotiateX Radio, helping you elevate your influence through purposeful negotiations, if you're here looking to learn about how to become a better negotiator in both business and life, then you're in the right place, be sure to join the others who have benefited from NegotiateX.com, your home for negotiations training and consulting online.