One thing you should be convinced about is that negotiating skills can be learned. Some people do seem to have more natural ability to negotiate than others. But it is a misconception that great negotiators’ innate temperaments have endowed them with unique insight and skills. This romantic notion grossly undervalues the importance of systematic analysis and development of strategy, and it gives short shrift to the impact of learning by doing and formal training.

Regardless of inherent ability, everyone can learn to be a better negotiator. To ask, “How can we develop negotiating ability?” is in essence to ask about the nature and development of expertise. How does the expert mind differ from the novice mind? What mental capacities do skilled negotiators employ that are absent in their less accomplished colleagues? How might such capacities be enhanced?

Developing Individual Expertise

Research suggests that experts manage complexity better than novices and that they do so because of superior abilities at pattern recognition, mental simulation, parallel management, and reflection-in-action.

Pattern recognition is the ability to see patterns, such as potential coalitional alignments, in complex and unstructured situations.

Like expert chess players, skilled negotiators filter out irrelevant clutter; they see configurations that represent threats and opportunities.

Mental simulation is the ability to envision promising courses of action and to project them forward in time imaginatively. This skill equips experienced negotiators to develop provisional action sequences, anticipate reactions and contingencies, and refine or discard plans as necessary.

Parallel management is the ability to track the substance of a negotiation while simultaneously shaping the evolution of the process. In Education for Judgment, Roland Christensen calls this “dual competency” a central component of expertise of all kinds.

Reflection-in-action is the ability to “go to the balcony,” as negotiation theorist William Ury put it, during tense and difficult proceedings for perspective on what is happening and why, and to adjust strategies accordingly.

Experienced negotiators also adopt a continuous-improvement mind-set. They don’t merely collect and analyze information. They immerse themselves in information about their circumstances, searching for emerging threats and opportunities; they systematically identify and tap into good sources of information and build networks of relationships to support intelligence gathering. Perhaps most crucially, they reflect on their experiences in an effort to learn from them.

Skilled negotiators cultivate an integrated awareness that helps them extract useful knowledge from a combination of verbal and nonverbal information. They also recognize and control their own reactions to what their counterparts say and thus avoid creating unnecessary barriers to learning. They develop strategies for eliciting information at the table, such as through active listening. As one gifted negotiator put it:

You have to have the ability to look at the big picture—to set the strategy in accordance with concrete goals. From that goal to devise not only the strategy but also the tactics: how to achieve these goals. It’s the ability to combine the big things with the small things. I think it’s a rare quality. You have people who can deal very cleverly with the big things, with the forest, but they are getting lost while dealing with the trees. So you need people that can deal effectively with both.

Developing Expertise

How can you acquire all these capabilities? The best way is to experience a range of negotiations, real and simulated, and then to take the time to reflect actively on them and to absorb their lessons. Gary Klein, a leading authority on the development of expertise, observes:

If you want people to size up situations quickly and accurately, you need to expand their experience base. One way is to arrange for a person to receive more difficult cases. . . . Another approach is to develop a training program, perhaps with exercises and realistic scenarios, so the person has a chance to size up numerous situations very quickly. A good simulation can sometimes provide more training value than direct experience. A good simulation lets you stop the action, back up and see what went on, and cram many trials so a person can develop a sense of typicality.

Structured on-the-job training and formal development programs are the ideal combination. Formal programs are important because negotiations come in such a range of types and magnitudes that it can be difficult to generalize well from real-world work experience. Those who learn from experience alone are prone to developing characteristic styles that work well in some situations and not in others, without fully understanding why.

Developing Organizational Capabilities

Important business negotiations typically involve teams of people. Capturing learning synergies within a team of individuals with distinct skills (and preventing uncontrolled leakage of information to the other side) translates into increased effectiveness.

Furthermore, companies often have many negotiators who undertake very similar negotiations. Consider, for example, a real estate agency with many agents or a manufacturing company with many purchasing managers and salespeople. If these negotiators learn from their past negotiations, capture the resulting insights, and, crucially, share these insights among themselves, they will intensify the overall negotiating effectiveness of their organizations.

Understanding Organizational Learning

All too often, the expensive lessons that negotiators learn are not shared. There may be incentives for the best people not to share their knowledge; after all, expertise is a source of status. Some people are too busy to share what they have learned or awkward at teaching less experienced people. Important knowledge about how to negotiate may even be “forgotten” by an organization. When turnover of skilled people is high, for example, the risk of loss of institutional memory is very high.

Training individual negotiators is a necessary prerequisite for organizational learning, but it’s not sufficient. You have to focus on management of organizational knowledge, not just individual competence. Knowledge sharing can be facilitated, and memory loss avoided, only through self-conscious management of the acquisition and dissemination of knowledge. Ask yourself about your own organization:

• How do new employees learn to negotiate?
• Are there incentives or disincentives for skilled people to share their knowledge?
• Are insights from past negotiations captured and shared among negotiators?
• How is knowledge preserved and forgetting discouraged?

Building a Learning Organization

If individual learning is to contribute to organizational learning, specific mechanisms must be set up to encourage collective knowledge sharing and reflection.⁶ The key is flexible, time-efficient processes for sharing knowledge, usually emphasizing person-to-person transmission over written documents. Flexibility and time efficiency are important because the pace at which most negotiators operate can crowd out time for reflection and discussion. Busyness is often the enemy of effective organizational learning.

Among the most useful mechanisms for enhancing organizational learning are common languages, apprenticeships, templates, and postmortems.

Common languages are conceptual frameworks that an organization’s negotiators all understand and use to communicate among themselves. Adoption of a common negotiating language (such as the lexicon used in this book) can dramatically streamline communication among groups of negotiators, and particularly between more skilled and less skilled people.

Apprenticeships are arrangements, formal or informal, between highly skilled negotiators (“masters”) and less experienced people (“apprentices”). For an apprenticeship to work well, the apprentice must work closely with and observe the master over an extended time. Apprentices can perform a useful support role, such as various forms of analysis, to make this arrangement an attractive bargain for the skilled negotiators from whom they learn. This sort of arrangement is common at investment banks and private equity firms, where partners teach (and simultaneously evaluate and leverage) associates. The basic model can be applied in any organization if there are incentives for masters to teach and for apprentices to learn.

Templates are documents that codify the fruits of experience, such as common traps to avoid in a given kind of negotiation. Good venture capital companies, for example, develop standardized approaches to doing due diligence on potential investments. Often templates take the form of checklists with which an organization’s negotiators ensure that certain bases are covered. Templates are a way of transforming tacit knowledge into general principles or rules that all of an organization’s negotiators can follow. As such, they must be carefully distilled from collective experience and kept simple and actionable. Crucially, they must be kept “alive”; they cannot be compiled in a one-time effort and then followed slavishly in perpetuity. The organization needs to devote ongoing effort to identifying and codifying new lessons learned (and to unlearning old rules that have been superseded).

Postmortems are post negotiation debriefings of the participants and others involved in similar negotiations. The point is to distill and share the lessons learned in specific kinds of negotiations. It is best to meet soon after a negotiation ends to discuss what happened and to translate what the team members learned into organizational learning. Here are some questions to ask during postmortems:

What to Ask After a Failed Negotiation

• Was not pursuing this opportunity a win or a loss for the company?
• If a loss, what could we have done differently?
• If a win, what did we do well that caused us to opt out of this situation?
• How could we have spotted the flaws earlier and spent less time on this opportunity?

What to Ask After a Successful Negotiation

• What did we do well?
• What problems did we overlook and when?
• How can we improve our ability to uncover such problems earlier?
• How does what we got compare with what we thought we were getting?

Common languages, apprenticeships, templates, and postmortems are the backbone of a system for effective development of organizational negotiating capabilities. When undertaken by good people dedicated to their own personal improvement, the result is a learning organization.

I hope that this book will help you become a better negotiator. Your agenda from this point forward should be to get diverse negotiating experience under your belt and to reflect on and organize it in your mind. Doing so will foster intuition and heighten your situational awareness. These capacities will equip you to develop workable options under time pressure—the true hallmark of the breakthrough negotiator—and to build superior negotiating organizations.

Jargons and Phrases used by Professional Negotiators

Action-forcing events

Clear breakpoints at which some or all of the participants must make hard choices or incur substantial costs. These breakpoints may result from outside forces or the actions of the negotiators.

Anchoring

Choosing an opening position that indicates a narrow zone of possible agreement to the other side. Studies have shown that the other side will adjust its perception of what is possible to coincide with this initial position.

Arbitrator

An objective third party, agreed to by the disputants, with the power to impose terms of agreement in a dispute. An arbitrator has no personal stake in the outcome and no bias toward either party.

Bandwagon effect

The sense of momentum that builds as more people commit to go in a particular direction and “get on the bandwagon.” As more support accumulates, the BATNAs of remaining holdouts get altered; they can’t stop something from happening and may prefer to be part of the winning side and not end up isolated.

Bargaining range

A hypothetical range of potential agreements in a given negotiation that would make all of the negotiators better off than their respective BATNAs. An agreement thus represents a solution to the joint problem of finding terms that all prefer to their best alternatives.

BATNA

(best alternative to a negotiated agreement) The best option available if an agreement is not negotiated. The better the alternative is, the higher the threshold of value that must be met in order to enter into an agreement.

Blocking coalition

An alliance of parties who may agree on nothing but their opposition to a specific outcome. Such parties band together to prevent the unwanted outcome and preserve the status quo.

Bootstrapping

Negotiating conditional commitments with two or more parties in order to gain agreement to move a project, deal, or initiative forward. See Conditional commitments.

Commitment tactics

Steps taken for the purpose of persuading the other side to commit, including ultimatums and deadlines, threats, staged agreements, and contingent agreements.

Conditional commitments

Commitments to enter into agreements conditional on some set of future events occurring, for example the willingness of other parties also to agree. See Bootstrapping.

Claiming value

The goal of the adversarial win-lose approach to negotiation characterized by a fixed pie that the winner will capture most of.

Competitive linkage

The relationship between two simultaneous negotiations in which agreement in one precludes agreements in the other.

Creating value

The basis of a creative approach to negotiation in which the parties jointly try to enlarge the pie through inventive trade-offs.

Distributive negotiation

A negotiation in which the parties’ interests are completely in conflict: there is a fixed pie of potential value to be divided, and anything one side gains, the other loses.

Driving forces

Escalatory actions that push a conflict toward all-out violence or conciliatory actions that push a conflict toward a state of peaceful coexistence.

Efficient frontier

The range of hypothetical agreements that maximizes the joint value the parties can create by making trades. Agreements are efficient only if neither side can be made better off without making the other worse off.

End-game effects

The tendency for negotiators to give primacy to value claiming if they anticipate that there will not be future interactions and if the amount of value to be claimed is significant.

Escalation

An often-abrupt increase in the intensity of conflict between contending parties.

Exploding offer

An offer that expires at a specific time. Exploding offers are a form of action-forcing event, designed to compel the recipients to accept before they have time to develop alternatives. See Action-forcing events.

Framing

The use of argument, analogy, and metaphor to promote a favorable definition of “the problem” to be solved and “the options” open to consideration. Negotiators often joust to establish the dominant frame in order to create and claim value.

Frame game

Competition among negotiators to establish the dominant framing of the problem and the options.

Informational asymmetries

Imbalances in contending negotiators’ access to information (about each other’s interests, bottom lines, and intentions). Informational asymmetries represent significant advantage for one side and generate perceived vulnerability and defensive reactions on the other.

Interests

The parties’ desires and goals (as distinguished from the positions they take).

Integrative negotiation

A negotiation in which the parties have shared interests or possess complementary resources but initially don’t know it. If they exchange information and discover their shared interests, the process shifts to joint problem solving and can produce a win-win outcome. Preoccupation with positions rather than interests, or refusal to share information about interests, can prevent joint gains from being realized.

Interveners

Outside parties who become involved in a negotiation. Interveners include mediators, arbitrators, and negotiators with partisan interests. See Co-mediation.

Joint gains

Results of mutually beneficial trades in which the parties exchange things that they value differently.

Learning-shaping dilemma

The difficulty posed by the fact that efforts to learn about the other side’s BATNA and walk-away can be confounded by counterparts’ efforts to shape one’s perceptions, and vice versa.

Linkage

Reciprocal linkage The relationship between two simultaneous negotiations in which agreement in either requires agreement in both.

Loss aversion

The tendency to be more sensitive to potential losses than to equivalent potential gains.

Mediator

An objective third party with no personal stake in the outcome whose role is to help the parties reach agreement. A mediator has no authority to impose or enforce agreement.

Mental models

People’s established beliefs about cause-effect relationships and the lessons of history. Mental models represent the crucial connection between objective reality and subjective perceptions. Negotiators view the situations they face through the lens of their preexisting frames and form beliefs accordingly about what is at stake (issues and interests) and how their counterparts will behave.

Midpoint rule

The tendency of a final agreement to occupy the middle of the zone of possible agreement.

Moves at the table

Actions taken during a face-to-face negotiation that have a direct impact on the other party, such as offers, ultimatums, threats, and concessions.

Moves away from the table

Actions taken during a negotiation that do not involve face-to-face interaction but can affect the outcome, such as involving other parties and building coalitions, gathering information that could affect a bargaining position, and invoking force.

Negotiator

A participant in a negotiation who has a partisan interest in the outcome.

Negotiator’s dilemma

A fundamental tension between cooperating to create joint gains (and thus enlarge the pie) and competing to secure maximum gains for one’s own side.

Outcome

The resolution of a negotiation. Outcomes include agreements, breakdowns, and deferrals.

Over commitment

Irrational continued commitment to a failing course of action.

Partisan perceptions

Perceptions on the part of the contending parties, transformed by the experience of conflict, that tend to make the conflict self-sustaining. The combatants accumulate psychological residues—emotional associations, expectations, and assumptions—that irreversibly alter their attitudes toward each other.

Pattern of concessions

Usually, large early concessions followed by progressively smaller concessions, signaling increasing resistance.

Perceptual distortions

Profoundly biased perceptions and interpretations of information about each other on the part of contending parties in a sustained conflict.

Position

The stated objectives of a party to negotiation, which may or may not reflect the party’s true goals (interests).

Principal-agent problem

The inevitability of differences of interest between representatives (agents) and the decision makers they represent (principals). This conflict leads principals to try to create incentive systems to align interests and to monitor agents, both of which represent agency costs.

Ratification tactic

Assertions that key decision makers who are not directly involved in the negotiations are demanding more than their representatives. This is a commonly used approach to claiming value. See Claiming value.

Reactive devaluation

Active discounting of gestures by the other side that are intended to be conciliatory.

Restraining forces

Resistance to escalation or to efforts to make peace.

Sequencing

The order in which issues or parties are dealt with in a negotiation, which can affect the outcome and build momentum toward agreement.

Sequencing plan

A plan to interact with negotiators in a specific order or deal with the issues on the agenda in a particular order, or both.

Sequential linkage

The relationship between two negotiations in which (1) the outcome of a past negotiation affects a current negotiation, or (2) the outcome of a current negotiation affects the negotiators’ scope of action in a future negotiation.

Strategy

A plan that integrates goals and action sequences into a cohesive whole.

Structure

The terrain on which the negotiator operates, whose key features are parties, issues, type of negotiation, information, action-forcing events, and linkages.

Trade-offs

The relative value of gains and losses on different issues. In multi-issue negotiations, negotiators may have different tradeoffs, which create the opportunity for mutually beneficial trades.

Unbundling

The process of subdividing complex issues into their component parts in order to identify possible trades or reach agreement on individual issues.

Vicious cycle

A type of feedback loop in which uncertainty and vulnerability lead the negotiator to behave defensively, evoking a similar response.

Virtuous cycle

A type of feedback loop in which effective learning bolsters confidence and fosters judicious information-sharing, promoting reciprocal responses.

Walk-away

The minimum value negotiators need to get to enter into an agreement. Walk-aways are established by translating the BATNA (the best alternative course of action in case no agreement is reached) into an equivalent minimum value in the negotiation.

Winning coalition

An alliance that represents a critical mass of support for an agreement. In a multiparty situation, an agreement can be achieved only if a critical mass on both sides supports agreement.

Suggested Readings

Negotiations

Bazerman, M., and Neale, M. Negotiating Rationally. New York: Free Press, 1992.

Cialdini, R. B. Influence: The Psychology of Persuasion. New York: Morrow, 1984.

Fisher, R., Ury, W., and Patton, B. Getting to Yes: Negotiating Agreement Without Giving In. (2nd ed.) New York: Penguin, 1991.

Hammond J., Raiffa, H., and Keeney, R. Smart Choices. Boston: Harvard Business School Press, 1999.

Kolb, D. M., and Williams, J. The Shadow Negotiation: How Women Can Master the Hidden Agendas That Determine Bargaining Success. New York: Simon & Schuster, 2000.

Lax, D. A., and Sebenius, J. K. The Manager as Negotiator. New York: Free Press, 1986.

Lewicki, R. J., Saunders, D. M., and Minton, J. W. Essentials of Negotiation. Boston: Irwin-McGraw-Hill, 1997.

Mnookin, R. H., Peppet, S. R., and Tulumello, A. S. Beyond Winning: Negotiating to Create Value in Deals and Disputes. Cambridge, Mass.: Harvard University Press, 2000.

Raiffa, H. The Art and Science of Negotiation. Cambridge, Mass.: Harvard University Press, 1982.

Salacuse, J. W. Making Global Deals: Negotiating in the International Marketplace. Boston: Houghton Mifflin, 1991.

Schein, E. H. Organizational Culture and Leadership. (2nd ed.) San Francisco: Jossey-Bass, 1992.

Shell, G. R. Bargaining for Advantage: Negotiation Strategies for Reasonable People. New York: Viking Press, 1999.

Thompson, L. The Mind and Heart of the Negotiator. Upper Saddle River, N.J.: Prentice-Hall. 1998.

Ury, W. Getting Past No: Negotiating Your Way from Confrontation to Cooperation. New York: Bantam Books, 1991.

Walton, R., and McKersie, R. 1965. A Behavioral Theory of Labor Negotiations. Ithaca, N.Y.: ILR Press, 1965.

Walton, R., McKersie, R., and Cutcher-Gershenfeld, J. Strategic Negotiations: A Theory of Change in Labor-Management Relations. Boston: Harvard Business School Press, 1994.

Zartman, I. W., and Berman, M. The Practical Negotiator. New Haven, Conn.: Yale University Press, 1982.

Zimbardo, P., and Lieppe, M. The Psychology of Attitude Change and Social Influence. New York: McGraw-Hill, 1991.

Dispute Resolution

Arrow, K., Mnookin, R., Ross, L., Tversky, A., and Wilson, R. Barriers to Conflict Resolution. New York: Norton, 1995.

Fisher, R., Kopelman, E., and Schneider, A. K. Beyond Machiavelli: Tools for Coping with Conflict. Cambridge, Mass.: Harvard University Press, 1994.

Moore, C. W. The Mediation Process. (2nd ed.) San Francisco: Jossey-Bass, 1996.

Robinson, R. J. “Errors in Social Judgment: Implications for Negotiation and Conflict Resolution. Part 1: Biased Assimilation of Information.” Case 897–103. Boston: Harvard Business School Publishing, 1997.

Robinson, R. J. “Errors in Social Judgment: Implications for Negotiation and Conflict Resolution. Part 2: Partisan Perceptions.” Case 897–104. Boston: Harvard Business School Publishing, 1997.

Rubin, J. Z., Pruitt, D. G., and Kim, S. H. Social Conflict: Escalation, Stalemate and Settlement. (2nd ed.) New York: McGraw-Hill, 1994.

Ury, W., The Third Side: Why We Fight and How We Can Stop. New York: Penguin, 2000.

Crisis Management

Augustine, N. R. “Managing the Crisis You Tried to Prevent.” Harvard Business Review on Crisis Management. Boston: Harvard Business School Press, 2000.

Fink, S. Crisis Management: Planning for the Inevitable. New York: American Management Association, 1986.

Kanter, R. M. Note on Management of Crisis. Boston: Harvard Business School Publishing, 1988.

Mitroff, I. I. Managing Crises Before They Happen. New York: AMACOM, 2001.

Mitropoulos, D. “The Reporter’s Dilemma: News Gathering as Negotiation, “ Negotiation Journal 1 (July 1999): 229–243.

Van Der Heijden, K. Scenarios: The Art of Strategic Conversation. New York: Wiley, 1996.

Developing Expertise

Christensen, C. R., Garvin, D., and Sweet, A. (eds.). Education for Judgment: The Artistry of Discussion Leadership. Boston: Harvard Business School Press, 1991.

Garvin, D. A. Learning in Action. Boston: Harvard Business School Press, 2000.

Goffman, I. Frame Analysis: An Essay on the Organization of Experience. Cambridge, Mass.: Harvard University Press, 1974.

Klein, G. Sources of Power: How People Make Decisions. Cambridge, Mass.: MIT Press, 1998.

Schön, D. The Reflective Practitioner: How Professionals Think in Action. New York: Basic Books, 1983.