Pre-Negotiation Strategy Plan CheckList (Part 1)
This checklist will help you prepare a successful negotiation strategy for any potential conflict and attain the best possible agreement.
To perform well, and perform well consistently, we must first learn to prepare. Ask any athlete who spends countless tedious hours preparing for a competition, or a lawyer about to step into a court room. At the end of our negotiation training courses we implore our soon to be graduates to book time into their busy calendars to prepare for their negotiations. While many colleagues, clients and suppliers will demand your time on a daily basis, very seldom will they remind you to invest more time preparing for your negotiations with them. Yet this is precisely what we need to do to create our successful negotiation strategy.
Let’s look at a negotiators check list to see how we might better prepare for our negotiations.
Negotiators Preparation Check List
1. Assess the situation
Each negotiation is going to be different, no matter how often we’ve addressed similar situations. We will always be negotiating with people who have different styles, goals and objectives, and who are coming from different circumstances and have different standards. So, always take stock and gauge which negotiation skills each negotiation will demand from you and your team.
2. What Kind of Negotiation?
There are 3 kinds of negotiations to prepare for:
- Is it a one time negotiation, where we will unlikely interact with the person or company again?
- Is it a negotiation that we are going to be repeating again?
- Is it a negotiation where we are going to form some kind of long term relationship?
Most of our business negotiations are likely going to fall in the last two categories. We will be handling a lot of repeat negotiations, where we negotiate with regular suppliers, or engage in labour negotiations with the same union reps for example. Or, we will be seeking a long term negotiated agreement such as a joint venture, where we will be mutually entwined over a long period of time. More time is required to prepare your negotiation strategy for the third type.
3. What Type of Conflict Will We Face?
There are basically two types of conflict situations we may encounter in a negotiation. Conflicts can present themselves singularly, or may be a mixture of the two. It is vital that the negotiator carefully analyse the conflict issues, both individually and collectively, to fully appreciate the unique challenges they present.
The first form of conflict might simply be called agreement conflict, where one person’s views or position are in conflict with another’s, or other members of a group. This is a situation that takes into account their conflicting views relating to opinions, beliefs, values and ideology.
For example, two executives may have different views about whether a strategic initiative should be prioritised. Another example may consist of a trade dispute between two countries, and entail ideological or religious based differences. Or, the conservative viewpoints of management might conflict with the more left wing approach of union leaders.
The second form of conflict entails the allocation of resources like money, quantity, production or simply put – things. Any physical commodity will fall into this category of conflict. Other issues might entail the allocation of resources, as a separate segment of the trade dispute. Resource issues though, are more tangible as they comprise knowable items, or particular products.
One blaring example occurs when subsidized farmers of one country, ‘dump‘ cheaper products onto the market of another country, at the expense of the indigenous farmers of that country.
By analysing the types of conflict into categories, negotiators can have a better understanding of the real measure of the disputes, and frame or focus their strategies more effectively.
4. What Does This Negotiation Mean to Us?
There are only two reasons why we enter into a negotiation.
The first reason occurs when out of necessity, we have to.This could be due to either some immediate need, such as urgency to find a particular supplier, or it could be that we face severe cutbacks in personnel, if we can’t increase our business.
The second reason occurs when we are seeking out an opportunity. This situation may arise simply because an opportunity has sprung up, where we can increase our overall business at an opportune time,
The reason for entering into a negotiation will affect both our approach, negotiation strategy, and also our relative negotiating power in comparison to our counterparty.
5. The Ripple Effect
We also need to ask ourselves whether the results of the negotiation we are conducting, will affect other negotiations or agreements later. Many companies today have international interests. An agreement with a company in one country, may affect how talks will impact or be influenced, with negotiations that will transpire later. with other countries.It’s vital that we, as negotiators, consider the impact or consequences of an agreement in developing our strategy.
6. Do We Need to Make an Agreement?
We either enter into negotiations because we have to, or because we want to. Part of our strategy will involve a careful analysis of our BATNA (Best Alternative to a Negotiated Agreement). If an agreement is absolutely essential, and we have few alternative options, in the event of talks collapsing, this will affect our strategy. Or, if the negotiated agreement is not essential because we have a strong option, and can walk away with confidence, this also influences the approach to our strategy.
7. Do Other Parties Need to Formally Approve the Agreement?
Many agreements made during the negotiated process require formal approval, or ratification before an agreement is official. Once negotiating management and union members have reached an agreement, union members may need to vote before the agreement is accepted. A Board of Directors, CEO, stakeholders, or other outside constituents, may also need to review and ratify an agreement, before the agreement can come into effect.
8. Is the Clock Ticking?
Time has an impact on the course of negotiations from two perspectives. First there are deadlines that might be imposed, to either make or break an agreement. Offers with expiry dates may be tendered. Time can be both a tactical weapon (who does it hurt more to delay?), and strategic imperative (who risks missing the boat to competitors?).
Lastly, we all know that ‘Time is money‘. Negotiations consume our time, and if a factory or production line is shut down while the negotiation clock is ticking, then this is costing money. The point to remember is that the longer the negotiations drag out, time will negatively affect the bottom line.
Ready to continue to part 2?
- Harvard Business Essentials ‘Negotiation’ Harvard Business School Press, (2003).
- Leigh Thompson, ‘The Heart and Mind of the Negotiator-2nd Edition’, Prentice Hall Business Publishing, (2001).
- J. Lewicki, A. Litterer, W.Minton, M. Sauders, ‘Negotiation’, 2nd Edition, Irwin, (1994).