Negotiating Space

Today you'll negotiate with someone – unless you live on a deserted island – even then you'd probably have a few negotiations with yourself.

Think about all your meetings and interactions with co-workers, your boss, your spouse, your children or a best friend. There are negotiations you'll have with buyers, sellers, waiters, and taxi drivers.

OK, so you're participating in all these negotiations—every day. How much 'Negotiating Space' have you been leaving yourself? Negotiating Space (leaving yourself room to negotiate) is something that really impacts your ability to achieve satisfying agreements – for everyone in the negotiation.

Research proves that people who give themselves room to negotiate do better than those who don't (e.g. Chester Karrass the negotiating researcher).

If you are looking to buy something you will do better if you make a low initial offer. If you want to sell someone a product, service, idea, concept, or change-of-policy, start out high.

The case for starting high and making slow, reluctantly given concessions, is a strong one. This approach gives you a chance to test the strength of the other person's position and their willingness to stand firm. This process helps you gather valuable information about the other person's position and feelings. This is information that becomes really useful when you start looking for Both-Win opportunities.

Wherever you decide to start your negotiation (i.e. take a position), have a good, logical reason for starting where you do. This helps avoid an appearance of flippancy.

The Harvard Business School has questioned the value of 'positioned based bargaining.' Several articles have been published on what has become known as 'interest based bargaining' or 'principled negotiations.' Interest based bargaining theory states that one should never take a 'position' in a negotiation. One should only negotiate from common interests. This concept, originating in the academic world, has its roots in legal, political, and diplomatic negotiations. To a more limited extent "interest based bargaining" has been tried in labor negotiations.

It is really hard to establish 'Negotiating Space' if you don't take a position.

Contrasting with the 'interest based bargaining' approach is what Dr. Chester Karrass developed as 'Both-Win' negotiating. The Karrass style of negotiating evolved out of real-world business negotiations. The Both-Win approach stresses the importance of establishing an initial position. Your initial position helps you create 'Negotiating Space.' Then the negotiating process utilizes this 'Negotiating Space' to uncover optimal, Both-Win outcomes. The Karrass 'Negotiating Space' approach is much more practical and realistic in today's business world than the Harvard 'interest based bargaining' approach.

Think about it. How many of your negotiations allow you to not take a position? What about the pressures you have from your own organization, your boss, or the marketplace. That's simply reality. The Karrass approach recognizes this reality and provides an initial competitive negotiation phase to help establish a process that builds a relationship with the other party. This relationship then allows you to work towards discovering Both-Win opportunities.

First, you go through a competitive phase where positions are disclosed and defended. This helps you understand the position of the other party, what power issues exist, expectations, and pressures at play. This understanding helps you build a more trusting relationship with the other party that can foster greater sharing of information. Ultimately this is what permits "Both-Win" opportunities to emerge.

An 'interest based' negotiation starts by each party providing the other party complete information about their 'situation,' and the expectation that each party is obligated to share information. This immediately puts the negotiators at risk. If one party does not reciprocate, the other party has instantly given up most of their negotiating power. Interest based bargaining fails to address this issue of power and the impact power plays in the outcomes of negotiations.

Fisher and Uri, two Harvard authors, argue that establishment of trust is not essential to 'interest based bargaining.' It's hard to imagine interest-based negotiations working in the absence of trust. True Both-Win opportunities can only revel themselves when a trusting relationship has been established. Relationships don't just happen automatically—it takes work and it takes time to build a trusting relationship.

Some sources suggest interest based bargaining might be appropriate if:

* Each party to the negotiation has complete authority to strike a deal without further review by anyone else. (This is not usually the case in most business negotiations. Most of us are not Bill Gates or Donald Trump.)

* Each party has the ability to clearly and effectively communicate. In many cases a facilitator is necessary to provide guidance and assistance that helps lead to a successful 'interest-based agreement.' (With the billions of negotiations taking place each day that's a lot of facilitators to hire. Most people are less than ideal communicators. Is this is a practical approach to negotiating?)

* Each party must be willing and motivated to assume the behavior changes and risks associated with interest based bargaining. There can be no hostility and no hidden agendas. (Does this sound like what really happens in most day-to-day business negotiations?)

* Each party must have reasonable expectations. They should not expect interest based bargaining to result in agreements superior to those obtained through position based bargaining. (So if there is higher risk using the 'interest based' approach, and no expectation of greater rewards, why do it?)

The desired result of 'interest based bargaining' and Karrass Both-Win negotiating are very similar. However, the Karrass Both-Win negotiating process is superior in helping achieve the desired results on a consistent basis. It's a proven negotiating process that is both practical and powerful—and can be used by anyone. Everyday.