Internal Negotiations: Win, Lose, or Collaborate

On 06/14/2010, In Advanced Concepts, High Dependency, Negotiation Strategy, By Andrew Boughton

Internal negotiations can include:

  • Resource allocation discussions
  • Project management and implementation
  • Labor relations
  • Influencing and persuading
  • Recruitment and promotion
  • Etc.

The problem starts with the structure of most corporate firms.  Decisions tend to follow a pyramid like hierarchy, even in flat or modular organizations.  As a result, disputes and conflicts are escalated for resolution.  The two sides submit their conflicting views and recommendations for consideration.  The decision maker chooses.  One side wins, and one side loses.  At the risk of over-simplifying the problem, this process creates win-lose outcomes when clearly win-win is appropriate given the circumstance.  (see Wheel of Negotiation)

Change the Decision Process

In order to avoid a win-lose outcome, the first step is to begin treating the discussion as a negotiation.  Instead of relying on delegated authorities to solve the conflict or issue, agree with the parties involved to reach a consensus as a group.  Leave escalation as a means for resolving deadlock or last resort.  If deadlock occurs, a “last best offer” style for the decision can be very effective at minimizing the lose factor.  In treating the issue as a negotiation a formal process needs to be followed to maximize the potential result. (Details below)

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How to Negotiate Your Salary

On 01/15/2010, In Hard Bargaining, High Dependency, Negotiation Basics, By Andrew Boughton

Salary negotiations are a bit of an enigma.  They have all of the elements of a Hard Bargaining situation:

  1. Limited variables
  2. Price is the main focal point (Salary)
  3. There are usually multiple applicants vying for the same position

Yet a salary negotiation also consists of elements of a High Dependency situation:

  1. Focus is on long-term gain and results
  2. Both parties are dependent upon each other
  3. Trust and relationship play a critical role in the negotiation

There is no ONE way to negotiate a salary; each situation will vary depending upon the circumstance surrounding the negotiation.  I’m going to first look at a situation where the applicant is a new hire from outside the company.   Step one is to determine how much leverage you have in the negotiation.  To assess your leverage you’ll need answers to the following questions:

  1. How many other qualified applicants are in the final stages
  2. What are your alternatives to this position
  3. What is your breakpoint
  4. What is their breakpoint (you’ll have to guess unless you are able to question effectively to unlock this information)

If there aren’t any other applicants and you have multiple options, you have quite a bit of leverage and can effectively set the bar very high.   (more…)

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Characteristics and Behaviors of High Dependency Negotiations

On 01/15/2010, In High Dependency, Negotiation Basics, By Andrew Boughton

High Dependency negotiations are nothing more than a Collaborative Negotiation where the parties are mutually dependent upon each other.  The consequences of deadlock are often substantial.  Typical situations falling into this category are joint ventures, partnerships, union negotiations, strategic alliances, etc. (marriages if you count personal situations).  The difficulty with High Dependency situations is that information is transparent, the other side sees the P&L and knows how much each item costs.  Therefore discussions are often emotionally charged.  Even though it is emotion that generally creates potential impasses during the discussions.  It is paramount to manage the climate and take responsibility for how you say everything.  The danger is that emotionally heated discussions may cause the negotiation to devolve into a Hard Bargaining situation causing strikes, lockouts, dissolution, or legal action.  The words that you choose in delivering proposals and responding to proposals become more important than the meaning of the words.  You must eliminate all words that have a negative implication like “no, don’t, can’t or won’t”.  You must constantly think “under what circumstance could I accept that proposal” and even ask the other side that very question.

EXTERNAL CHARACTERISTICS: The balance of power is equal.  The deals are based on a mutual dependency.  All the characteristics of a Win Win negotiation are present with the added pressure that the parties cannot afford to deadlock.  Any alternative or substitute would be financially constrained.  Information is open to all parties.  Typical negotiations include Joint Ventures, Partnerships, Strategic Alliances, Labor Negotiations, etc.

BEHAVIORAL ELEMENTS: High Dependency requires a high level of trust as relationship plays a important role in shaping the business.  Satisfaction is received through understanding priorities, creating incremental value, and sharing value on primary issues.   (more…)

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