Harvard Negotiation Project: 5 Lasting Rules For Negotiating Anything
, Sunday, May 25, 2008 at 9:00 AM PT Comments (6)
I recently had dinner with a friend of mine, a physician-turned-businessperson-turned-founder. We were discussing the virtues of transferable skills, and I asked him what management tools he brings to entrepreneurship from his earlier career in medicine. He pondered a bit before confessing that radiology skills don't, in fact, translate so easily. Instead he referred me to what he called "one of the most valuable books" he's ever read.
Turns out he was referring to one of the original publications to come out of the famed Harvard Negotiation Project, a seminal workshop that was started in 1979 with a mission to improve dispute and conflict resolution. Harvard's researchers focused on negotiation for all kinds of conflicts, from the interpersonal to the international geopolitical. But since conflict negotiation is something businesspeople do daily, it's not surprising that the fruits of their work were also published as a business book just two years later in the now classic best-seller, "Getting to YES: Negotiating Agreement Without Giving In," by Roger Fisher, Bill Ury and Bruce Patton.
I picked it up. As my friend suggested, it's as relevant as it always was, a common sense approach to effective negotiation rooted in five basic ideas. And if you can manage to absorb and apply these five rules, you'll be much better off going into your next deal.
1. Don't Bargain Over Positions
Most of us begin negotiation by identifying a position and arguing for it, such as: "I want to retain the CEO title." But such positional bargaining can limit your ability to arrive at a "wise agreement" that benefits both parties — the proverbial middle ground and the whole purpose of negotiation. Instead of thinking of a "position," identify the goal. You want remuneration for the sweat you put into your company. You want, for example, status (to remain CEO). But a specific position is binary — you either get it or you don't. A goal can be attained in many ways, giving you many more options for arriving at a solution.
2. Separate the People From the Problem
Most negotiation is emotional. You want something, after all. And emotion clouds our objectivity. But you can limit the emotional content of your negotiation by thinking of the person you're talking to as your partner and the problem you're trying to solve as an object. Take, for example, the question of how much a company's equity is worth. In this case, you're not negotiating against the investor over a position, you're engaged with that person to arrive at the right answer to the question. Some will urge you to make your negotiation opponent a partner, but this can lead to Stockholm Syndrome. Instead just think of engaging the other person, using their input to arrive at the right answer. Maintain your independence.
3. Focus on Interests
We all have interests. The pursuit to fulfill our interests leads up to adopt positions. But bargaining for stated positions, such as titles, will not necessarily produce a wise agreement that takes care of the interests that led you to adopt the positions in the first place. Think instead: I want to remain engaged in the business. There are many ways to achieve goals without having specific positions.
4. Invent Options for Mutual Gain
This is the creative part. You must examine each other's interests to come up with options in which both parties gain. Your investors have an interest in a pro-CEO who can sell into large corporations (you've never done that). You need funding, but also want to remain engaged. Both parties can draft a list of options for your new role that satisfy everyone's needs: COO, president, chief innovation officer, etc. Negotiate from this list.
5. Insist on Using Objective Criteria
We all have personal standards. CEO conveys more status than chairman, etc. The key is to let go of personal standards in favor of objective ones upon which both parties can agree. (Think of the Kelley Blue Book, a set of agreed-upon standards for those looking to buy or sell a car). But here you have to do some real homework and investigate the objective standards that apply to your negotiation ahead of time. Some to consider: market value; legal or business precedent; scientific judgments (patents); efficiency; and reciprocity.
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