2
Prenegotiation Preparation

Learning Objectives

By the end of this chapter, you should be able to:

• Assemble the data needed to clarify the issues and objectives of the negotiation, using available expertise.

• Prepare a negotiation plan.

• Select and coach a negotiating team.

Lack of preparation and overconfidence are the two greatest reasons for failure in negotiations. Inadequate preparation, in particular, rules out success at the negotiation table.

Negotiation is a combative process where mental dexterity and psychological stamina replace physical prowess. As in hostile combat, the prudent person prepares himself or herself for the contest as thoroughly as possible. No amount of skill, experience, or persuasive ability will overcome an opponent with a position based on complete and thorough preparation.

The preparation phase has four major components:

1. Assembling the data necessary for evaluating initial issues and objectives.

2. Formulating a detailed plan for the negotiation.

3. Selecting the negotiation team.

4. Picking a team leader who will train and guide the team.

ASSEMBLING DATA

Because topics for negotiation span the entire range of human relationships, a checklist of necessary data must be tailored to meet the individual requirements of each situation. Thus, the first rule is:

Make a checklist for each issue related to each negotiation.

It should not be overlooked that every negotiation is unique, even though the parties and basic matter to be discussed may be the same, with only the span of time changed. A useful format for assembling necessary data is as follows:

1. Prepare a written statement of your understanding of the facts that relate to each segment of the business to be discussed.

2. Reduce all data to specific elements—the “who,” “what,” “why,” “when,” and “where” of the subject.

3. Convert these data into a series of questions framed to require specific answers. If specific answers cannot be provided either by primary or secondary resources, review your statement of facts. This will serve as a further check on your degree of understanding of the basic issues (or the value of these issues). The issues may be more or less important than originally thought.

4. Submit these questions to primary resources, such as accountants, engineers, or lawyers. Set a time limit for receiving their responses.

5. While this is going on, undertake some research of your own. Refer to secondary resources, e.g., trade or professional journals or published compendiums of background information, such as those put out by the American Management Association, that contain information that can be profitable used for self-education. This step is important if you are to develop a good understanding of the total subject. This extra effort also helps you assess the quality of the answers you get from your primary resources.

6. Consult with associates who have faced similar situations. At the very least, bounce questions off someone whose judgment you respect. In the process, you will think of additional questions that need to be dealt with ahead of time.

This data assembly process should continue until you can dismiss the issue as frivolous and not warranting negotiation, or you decide that there is an issue to discuss with your opponent, and then until your opponent’s arguments can be handled as well—or almost as well—as you can handle your own. By the time your preparations are finished, you should be able to serve as a very effective devil’s advocate.

At this point, you are ready to revise your understanding of the facts, injecting new data now in hand, and to reevaluate your initial objectives in light of the changes. Now your objectives become more clearly defined, and, most important, assumptions disappear entirely or narrow down to readily identifiable gray areas that can be accommodated in your prepared position. Dealing with gray areas from a prepared position is an often-overlooked strength that deserves attention.

It is appropriate here to back up a little and deal with the mechanics of the preparation process. Family members engaged in personal transactions often, and sensibly, approach their appointment as a team, by working out certain limitations, strategies, and procedures in advance. In particular, they try to make sure they will not work at cross purposes with one another. In the same way, companies, preparing to become involved with others, will develop effective in-house team structures to use in the negotiation process. A good manager will become familiar with the way this is done.

TEAM MEETINGS

Most in-house team meetings will be informal. When time is critical (and in virtually every negotiation it is), an agenda and proposed questions should be drawn up by the negotiator and given to all participants before the meeting takes place. In this way, necessary information can be obtained with a minimum of delay. Staff members can be given a sense of direction and urgency.

Prior to the team meeting, the negotiator should take into account some possible pitfalls. For example, accountants, engineers, and lawyers are valued resources and their input is almost always required. However, the negotiator should keep in mind that because of the very nature of their work, these specialists tend to think in absolute terms. This tendency can present a challenge when concessions to one’s opponent may be necessary.

DEALING WITH THE ABILENE PARADOX

At times the negotiator will appear to have complete staff agreement at in-house prenegotiation sessions. If this happens too often there may be a potential problem that social psychologist Jerry B. Harvey calls “The Abilene Paradox”: A member of a group fails to communicate accurately his privately developed position to others in the group. He appears to agree with the consensus (obviously different from his own viewpoint). This leads the group to act without benefit of meaningful input from a valuable resource (or to act on data that are actually false). The handicap that this imposes can be crippling.

The paradox exists because a participant seeking to function as a team member by avoiding disagreement and simulating harmony may actually scuttle the entire team’s effort. This member’s apparent cooperation with his or her colleagues becomes the decisive element that guarantees their failure.

The Abilene Paradox is especially pervasive in Washington D.C. during decision-making by government committee. Two of the most famous examples occurred during the White House deliberations concerning Cuba in the Kennedy Administration. The first, during which doubts were held back by participants, led to the ill-fated Bay of Pigs invasion. John Kennedy vowed to avoid the same mistake when the Cuban Missile Crisis erupted the following year, so he changed the way his advisory committees worked, to solicit expression of differing points of view.

Dealing with the Abilene Paradox is the responsibility of the negotiator acting as team leader. The best preventive defense is the leader’s insistence that each team member discuss all positions fully, on a logical basis, and direct comments specifically to points at issue. The team leader should go around the table, requiring each participant to defend positions of both agreement and disagreement, allowing no member to pass or reserve judgment.

As in-house preparations go forward, the negotiator will amend the check-list of issues many times. Once satisfied that all data have been evaluated as objectively as possible, the negotiator will identify those elements on which he or she can afford to “give,” as well as those that are nonnegotiable. In this way, a comprehensive battle plan is developed.

Most negotiators will find that, in the process, they have become excellent negotiators for the other side. They have a good chance of winning the contest because they are aware of the reasons behind the opposing position and the probable form of counterpoints that opponents will raise, and have prepared logical answers to them.

SELECTING THE TEAM

In matters involving a personal concern (negotiating for a raise or promotion, negotiating for a larger staff or a better office location, or making a family purchase) negotiation is most likely to be a one-on-one situation. However, both sides generally have consulted with other resources available to them before sitting down at the table. In some situations one or another bargainer also may have his or her attorney, accountant, or office supervisor sit in.

Companies also use this technique, particularly when the transaction involves limited cost or is not expected to be troublesome. However, some companies cannot provide a number of supporting specialists, and they have little choice but to select one person they believe to be qualified to serve as spokesperson. Other companies with adequate personnel may send only one representative because they wish to suggest to the other side that the transaction is of little significance.

When companies have extensive support resources, there normally is an in-house staff, consisting of various disciplines, who participate in day-to-day management of the business. When an issue for negotiation arises, the person selected to serve as negotiator can draw extensively upon these in-house colleagues. The negotiator also has the benefit of this option because the matter of compensation for these experts is of no practical concern. Furthermore, he or she can presume that most colleagues asked to provide necessary data have a reasonable working knowledge of the issues involved.

As indicated, negotiators must bring something of their own to the mix. In general, their basic contribution will be a thorough understanding of the effect of market conditions, economic practicalities, political forces, and the like that may have significance in the outcome of the negotiations.

RESPONSIBILITIES OF THE TEAM LEADER

It is the team leader’s responsibility to arrange for the appropriate personnel to be present when negotiations take place. This can include a backup audit or finance representatives, and others.

The lead negotiator must consider the advantages and disadvantages of employing a full negotiation team. On the plus side are certain psychological factors: the presence of experts from many disciplines can ensure availability of quick, unassailable facts in response to an opponent’s questions; an agreement reached by a team is often more easily sold to top management, especially when the agreement does not represent total victory. An important disadvantage is that the opposition may succeed in dividing the team, causing dissension. A large team also may demonstrate the various usual drawbacks of committee performance. It is the responsibility of the lead negotiator to prevent this. A disciplined group can have only one spokesperson, the lead negotiator. He or she is responsible for the eventual outcome of the negotiations, and his or her leadership must be accepted by all team members.

When actual negotiations will involve a number of team members serving as a delegation at the bargaining table, the team leader should do everything possible to ensure benefit from the expertise available. Prior to the actual negotiations, a team meeting should be scheduled to conduct a mock session. Others from the staff can be designated to play the opposition. A significant effect on the outcome of the actual negotiations can be expected when team, as well as individual, strengths and weaknesses can be clearly seen.

The lead negotiator should remind all team members to be continually aware of the end objective of the negotiation process, that is, to obtain the best possible agreement for their side. New members should be alerted to the fact that they may have to muffle, modify, or postpone expressions of professional opinions in order that an agreement can be reached.

When negotiations ar actually underway, key elements that must be considered can be brought to the lead negotiator’s attention during recesses, when they can be incorporated into the overall tactical format. If necessary, team members may be given signals to use if they feel a recess for such purpose should be called. Negotiation involves a series of small battles in which some ground is gained and some relinquished, so backup experts can find it very difficult to maintain the passive position that sometimes becomes necessary to achieve the team’s objectives.

A negotiation team is a matrix organization; that is, it is a temporary group of specialists drawn from a variety of areas to accomplish a specific objective. Team members typically do not come under the continuing supervision of the lead negotiator, nor are they relieved from those day-to-day responsibilities that are not associated with the transaction at hand. For this reason, it is not uncommon for some team members to have organizational stature senior to that of the lead negotiator. The team leader must earn their respect and ensure their cooperation regardless of his or her position within the organization.

There are several positive steps lead negotiators can take to accomplish this and to function effectively in a very challenging management role.

• They must develop a better overall grasp of the transaction at hand than any other one member of the team.

• They must not hesitate to ask advice, admitting to uncertainties about specific points outside their area of expertise. Once the advice is provided, they should digest it, measure it against the balance of information on the point, and, if the idea is sound, accept it.

• When expert suggestions do not appear to be fully logical and realistic, or if they cannot be fitted into the battle plan, lead negotiators must have the courage to ignore them, making sure they are able to defend this decision. This may require extra homework.

• Team leaders should avoid any temptation to make defensive arguments in areas where they are knowledgeable or to belittle opinions that do not agree with their own.

• They should be plainspoken and direct, but never rude.

• They should carry through on every promise they make. This is a major factor in maintaining credibility, and it is essential if negotiators are to be accepted in leadership roles.

DEALING WITH CONFLICTING PERSONALITIES

It is an interesting fact that negotiators’ first battles often involve members of their own team. During highly charged in-house sessions, these battles give team leaders the opportunity to sharpen the skills they will need to deal with their opponents’ points of view. It is excellent practice for the negotiations that will follow.

For example, engineers think that equipment compatibility is more important than cost. Accountants insist that the cash-flow position will not tolerate additional expenditures. Lawyers are apt to require absolute protection against patent infringement. From their point of view, all engineering wants is for the lawyers to find a loophole so the engineers can do what they want. And so it goes. These particular specialists are mentioned because what they have to say is so often correct and should be given the most careful consideration. Every staff member with an interest in the objective of the negotiation could be considered as a possible source of conflict.

The point is that real divisions exist regarding basic questions such as planned obsolescence versus product quality, increased automation of equipment versus programs to provide more jobs, or the security of dealing with known equipment versus programs to provide more jobs, or the security of dealing with known equipment versus the promise of something new and potentially better. Negotiators must find the means of picking through these considerations, responding to them, and incorporating in the negotiation plan those that will most significantly add to bargaining strength.

Robert Blake and Jane Mouton identify five principal methods by which interdisciplinary conflicts can be resolved:

1. Withdrawal—retreating from actual or potential disagreements and conflict situations.

2. Smoothing—deemphasizing differences by identifying and stressing areas of agreement.

3. Compromising—considering various issues, bargaining, or searching for solutions to bring some degree of satisfaction to each of the conflicting parties.

4. Forcing—pressing one’s viewpoint at the expense of another’s.

5. Confrontation—addressing a disagreement directly, recognizing a problem, and permitting conflicting parties to work through their disagreement.

These techniques for resolving conflicts also have a very important place at the negotiation table. They will be referred to later.

PRENEGOTIATION DISCUSSIONS WITH OPPONENTS

Sometimes it is necessary to meet informally with the opposition prior to actual negotiations. This often happens when the person who must approve a transaction finds ambiguities in the proposal of the person offering to do business. Such meetings may also take place when a question is brought up in prenegotiation preparations by a team member on either side.

If such a prenegotiation meeting is to resolve an obvious point, the matter can be addressed directly and the person offering to do business can be pressed for clarification. If, however, the prenegotiation discussion deals with matters that can affect the negotiating position of the person approving the transaction, the issue should be addressed indirectly. It is often camouflaged with questions that are of little importance. The real point is hidden among less important questions. In such a case, prenegotiation discussion can be a very useful tool.

Leaders of negotiation teams must be able to evaluate the adequacy of data they receive from their resources. They must be alert to conflicts among team members and be adroit in dealing with these conflicts in advance of negotiations. They must also head off the effects of the “Abilene Paradox,” the tendency of team members to withhold disagreement so as to preserve team harmony, yet by doing so, actually to hinder team effectiveness.

As part of the prenegotiation preparations, negotiators should develop a list of issues and the way in which they expect to handle these issues. This list should include any data available regarding the use of specific team members.

Successful negotiators should determine how the various specialists available will function as a team. This includes setting up mock negotiations, if possible. In this way, negotiators can test their own capabilities, challenge the team, and subject the team and themselves to the stress that will be found at the negotiation table.

Successful negotiators will also learn as much as possible about the opposing team—its composition, strengths, and weaknesses—and about the issues that are likely to be raised.

Once the negotiator has completed the full details of this work, it will be necessary to provide the in-house resource personnel with a general overview so they will know the role each is expected to play at the negotiation table. But, in order to ensure against premature disclosure, no other participant should know the full negotiation strategy.

Review Questions