Defining Interest-based Negotiation

Negotiators often make the mistake of turning the negotiation process into a contest of positions. Some are hard bargainers, thinking of the other party as an adversary; others take a soft approach, considering the other person to be a friend and making concessions easily. Instead of utilizing hard or soft bargaining tools, effective negotiators tend to focus on the interests of both parties.

Focusing on interests

In interest-based negotiation, the negotiators come to the table with a clear understanding of what they want and why they want it, but also with an understanding that the other party has its own set of needs to fulfill. Knowing that both parties’ needs can be satisfied in multiple ways allows for the negotiation process to be more about constructive problem solving—that is, collaborating to find out what they can do together in order to achieve their respective interests.

Focusing on interests involves concentrating on the “why” instead of the “what.” People always have a reason for wanting something. For example, imagine that you and your friend are arguing over who should have the last orange in the fruit bowl. Your friend may want the orange because she wants to make juice, while you may want it because you need the peel to make cake. If, rather than arguing, you talk about why you need the orange and uncover the underlying interests behind your respective positions, you will discover that one orange can satisfy both of you.

Conducting interest-based negotiations

Focus on interests

Make sure that you have a clear understanding both of your own interests and those of the other party.

Exchange information

Before making any decisions, exchange information with the other party in order to jointly explore possible solutions.

Use standards

Base your negotiation on precedents, laws, and principles, rather than arbitrary judgements. This makes the agreement fair and makes it easier to explain the rationale to others.

Know your BATNA

Make sure that you have a clear understanding of your BATNA (Best Alternative To a Negotiated Agreement)—the best option available to you if the negotiation process falls apart.

See both sides

Assess the situation from the other party’s perspective. This improves communication and helps the other party understand how they stand to benefit from the deal.

Aim for joint gains

Instead of limiting the thinking to only one or two options, work jointly with the other party to creatively explore many potential solutions.

Separate the issues

Keep people issues, such as emotions, separate from substantive issues (such as price or delivery dates).