In this article from the Program on Negotiation from the Harvard Law School blog by Katie Shonk, she summarizes four key points from Northwestern University professor Leigh L. Thompson’s book The Mind and Heart of Negotiation. It is worth the quick read. The four points are:
1. Assess and improve your Best Alternative to a Negotiated Agreement (BATNA)
2. Calculate – but do not disclose – your reservation point
3. Research the other party’s BATNA and reservation point
4. Evaluate the Zone of Potential Agreement (ZOPA)
I find when assisting with negotiations that many of my clients need help doing their homework on these types of items. It is important to stay focused and keep your eye on your goals.
What is our BATNA? Why is this important? Can we expand on our BATNA with other areas beyond your original ideas? Consider: timing, quality, recommendations, future work, relationships, etc. Brainstorm with your team.
Calculate not only your reservation point, but a host of alternatives. I usually recommend that you use your BATNA, the other side’s starting point, and four alternatives in between. Include what this article refers to as your reservation point. By developing various alternatives that make sense to you factually, you often discover some breaking points that make more sense than others for various reasons.
Do explore what you think is the other side’s BATNA. Often my side makes assumptions that prove to be inaccurate in the course of negotiations. That doesn’t mean to forgo this step. Rather by discussing this up front this can help with what questions to ask in the course of the negotiations. For example are you aware that of all of the estate and gift tax cases audited by the IRS about 20% are in the taxpayer’s favor, about 20% are no changes and about 60% result in additional tax? Did you know that if significant time is spent on an examination by and estate and gift tax agent, a no change case can negatively impact an employee’s evaluation? Having a refund case or an adjustment is preferable to a no change case under these circumstances. Doing homework ahead of time can provide some interesting insights.
As negotiations take place expand on your point of reference and consider your zone of possible agreement considering what you have learned over the course of the negotiations. Often times your point estimate has expanded and so has the other party’s. This may offer a potential zone of possible agreement for both of you to explore.
I found this article and the summary of key points from Professor Thompson to be right on point to the negotiations I assist with business to government (IRS), business to business and within businesses. Consider these key point not only in your dealings with businesses, but in any negotiations Doing your homework up front, developing alternatives, developing a good working relationship, listening to the other side and then educating the other party, go a long way towards resolving conflicts and having a more successful negotiation.
Michael Gregory, ASA, CVA, MBA is an expert in conflict resolution dedicated to making individuals, organizations, thought-leading entrepreneurs and executives more successful. Michael’s books, including his NEW BOOK Peaceful Resolutions: A 60-step illustrated guide to conflict resolution are available at this link. Free resources are available online at www.mikegreg.com. Check out the blog. Contact Mike directly at firstname.lastname@example.org or call (651) 633-5311.
About the author
Mike Gregory is a professional speaker, an author, and a mediator. You may contact Mike directly at email@example.com and at (651) 633-5311. Mike has written 12 books (and co-authored two others) including his latest book, The Collaboration Effect: Overcoming Your Conflicts, and The Servant Manager, Business Valuations and the IRS, and Peaceful Resolutions that you may find helpful. [Michael Gregory, ASA, CVA, MBA, Qualified Mediator with the Minnesota Supreme Court]