Leadership Lesson: Preparing for Successful Negotiation
(part 2 of a series of 3 lessons on negotiation)

Case Study Synopsis: A negotiation that secured a women’s health care program.

How did they do that? -- Roberta Jacobs, M.D., Ph.D., MPH, now serves as the course director for a new institution-wide instructional program in gender-based health care. Her work is now funded in part by federal grants that support research, clinical care, and education in women’s health and through the funds generated by the new Women’s Health Clinic. She shares administrative responsibilities for the Clinic with Dr. Anderson, the clerkship director of Obstetrics and Gynecology and Women’s Health. While investigating options for the development of the residency program two years ago, Dr. Jacobs discovered she and Dr. Anderson had mutual interests. Both were negotiating with the same parties who perceived that they were in competition. They joined forces and carefully prepared for each step of their negotiations with the hospital, the medical school, and a variety of departments. The Women’s Health Clinic and the institution-wide instructional program in gender-based health care are manifestations of the negotiations. Review the case.

Skills of Negotiation: Preparing for negotiation by considering interests and standards, generating alternatives, and using of leverage

In the January 2005 issue, Faculty Vitae addressed the four basic stages of negotiation: preparation, exchanging information, bargaining, and obtaining commitment. This lesson discusses fundamental skills of negotiation that have a key role in the first stage of negotiation, preparation, and that position you to be more effective as you move through the remaining stages of negotiation. Review the basic stages of negotiation. Download Skills of Negotiation (PDF, 3 pages, 102kb).

Professor Steven Blum addressed the basics of negotiation strategies in his sessions for the AAMC Executive Development Seminar for Associate Deans and Chairs. He reminds us to always look beneath the surface of The Bargaining Pyramid to the other party’s interests!

	The Bargaining Pyramid Always look beyond the stated position to the real interests of all parties when negotiating.
	Position: What you want.
	Issues: Why you want the action or item.
	Interests: The problem you are trying to solve.
Adapted from materials from the Legal Studies Department of Wharton School of Business

As you prepare, it is important to understand why the party you’re negotiating with would not agree with your position and to discover the other party’s goals. You stand a greater chance of meeting your interests if you minimize the other party’s objections and if you can align your interests with the other party’s goals. As you prepare for negotiation, keep the following terms and phrases in mind from the perspective of your role in the discussions and from the perspective of the other parties:

Positions are generally the concrete action or item you want. Focusing on position rather than interests can lead to a “line in the sand” approach in which both parties end up with only sand.

Interests are intangible motivations that lead you to take a particular position—your needs, desires, concerns, fears, and aspirations. Interests are often revealed when one explores the true underlying motives of each party. The more interests are known, the more options can be considered in negotiation. Effective negotiation considers shared interests as well as those in conflict.

Options are all of the many possibilities for structuring the agreement. The most creative options are those that satisfy the interests of both parties. They solve a problem or enhance an opportunity. Sometimes this opportunity is one that neither party was aware of until the brainstorming of possible approaches to addressing mutual interests began. Options include the original ideas as well as all new possibilities considered for addressing the problem.

BATNA, the Best Alternative To a Negotiated Agreement, is the alternative you have identified as your fallback position; it is an option you can take if unable to reach an agreement in the negotiation. The better your BATNA, the better your leverage.

Tips for exploring the other party’s interests:

• Identify the decision maker.
• Identify how it may serve the other party’s interests to help you achieve your goals.
• Determine why the other party might say “no.”
• Determine low-cost options to remove the other party’s objections.

Identifying the other party’s standards and goals helps you to frame your needs in ways consistent with those goals. This works in two ways. First, as we have a need to appear to be consistent (the “consistency principle”), articulating your goals in ways consistent with the other party’s goals or prior statements is an effective means of meeting his/her need to be consistent. Second, you gain leverage by identifying standards and norms that the other party finds relevant and articulating your approach in ways that advance those standards or norms. Standards provide a common measure of fairness of the potential agreements. Standards that the other party finds legitimate form a basis by which you may cast your needs and resolve differences. Examples of fair terms/standards (from Getting to Yes) include market value, precedent, scientific judgment, professional requirements, cost and efficiency, legal opinions, moral codes, and expectations of reciprocity.

Tips for using standards and norms in negotiation:

• Survey applicable standards and norms and identify those viewed as legitimate by the other party.
• Prepare supporting data and arguments regarding those standards and norms.
• Be prepared for the arguments the other side will make.

Leverage is a dynamic balance of needs and fears of all parties negotiating, the perception of power, or ability to deliver or remove options from the negotiation. It need not be based on facts alone; rather, leverage is often based on the parties’ perceptions of the circumstance. Leverage can be positive, based on disclosed wants. Indeed, “every time the other party says, ‘I want’ in a negotiation, you should hear the pleasant sound of a weight dropping on your side of the leverage scales.” Leverage may also be negative, or threat-based. Leverage is a situational advantage and is always relative to what the other party needs or has to give and can change as the conditions and players change.

How can you evaluate the changing dynamics of leverage? Shell offers a checklist:

• Which side has the most to lose from no deal?
• For whom is time a factor?
• Can I improve my alternatives or make the other party’s worse?
• Can I gain control over something the other party needs?
• Can I commit the other party to norms that favor my result?
• Can I form a coalition to improve my position?

Review these concepts in action: Read the case of the new program and clinic.

Resources

Fisher R, Ury, W. (1991). Getting to Yes. New York: Penguin Books.

Ury, W. (1993). Getting Past No. New York: Bantam Books.

Shell, G.R. (1999). Bargaining for Advantage. New York: Penguin Books.

Golde, C. Be Honorable and Strategic, from The Academic Scientists’ Toolkit in Science, Next Wave on the World Wide Web: http://nextwave.sciencemag.org/cgi/content/full/2001/08/22/7. The Toolkit is available on the web at http://nextwave.sciencemag.org/feature/cdctoolkit.shtml.

Negotiation Basics, (January 2005) Faculty Vitae www.aamc.org/members/facultydev.

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