Negotiation Stages Introduction
- There are five collaborative stages of the negotiation process: Prepare, Information Exchange, Bargain, Conclude, Execute
- There is no shortcut to negotiation preparation
- Building trust in negotiations is key
- Communication skills are critical during bargaining
There is no magic or mystery to negotiations or to what makes a master negotiator. There are 5 steps and practices that consistently work. The model presented here identifies the five stages of any negotiation in a simplified framework that helps you to analyze, absorb and apply the Best Negotiating Practices (BNPS).
This model was built from diverse client experiences at organizations around the globe since 1993. It is circular because it depicts the fluid movement of all negotiations. Collaborative negotiations are an ongoing process, which build confidence, trust and strong relationships.
The 22 Best Negotiating Practices (BNPs) principally fall into a negotiating stage – although some apply throughout the negotiating cycle and others cross over from one stage to the next.
|Five Stages of a Negotiation|
|Stage 1: Prepare||
Identify potential value
Stage 2: Information Exchange and Validation
Discovering and creating value
|Stage 3: Bargain||
Create and distribute value
|Stage 4: Conclude||
|Stage 5: Execute||
Stage 1 – Prepare
There is no good short cut to Preparation. It is the first stage of any negotiation, though people often don't give it the time it warrants. They often charge into the Information Exchange Stage, or even directly to Bargaining.
Preparation starts with determining if this is a potential collaborative situation so that you can select the better strategy. Next, you spend time researching information, analyzing data and leverage, and identifying interests and positions. Finally, you have to consider the relationship you want to build.
Five Key Elements of Negotiation Preparation
- Initial points to consider
Should I be negotiating?
What I need to know
- Research covers
Players and stakeholders
The fact base
Standards and benchmarks
- Analysis includes
Anticipating what will happen
Assessing strengths and risks
- Identification of your and their
Positions: Goals, Most Desired Outcomes, and Least Acceptable Agreements
Best Alternatives to a Negotiated Agreement
- Know the relationship you want to build
Plan to build trust
Prepare for emotional reactions
Develop Probes to discover "Don't knows" and test Assumptions
Stage 2 – Information Exchange
The Information Exchange Stage occurs when you begin to engage the other side, share information and explore options that address interests – what you each need, as opposed to positions – what you each ask for later in the Bargaining Stage. We will discuss the difference between interests and positions and how critical they are to successful negotiations in depth later, but here is a brief example:
Employee’s position: she has asked to be assigned to Project Beta.
Employee’s interest: to get promoted, she needs to succeed on a project of high visibility.
It is critical here to focus on building rapport and trust, without which neither party will feel comfortable sharing interests. One way to build the relationship is to do your "social homework" in this stage by finding out and showing interest in the other party's business culture, personality, outside interests and values.
Four Critical Assessments are made in the Exchange Stage:
- Trustworthiness – Are they honest and dependable?
- Competency – Are they credible and able?
- Likeability – Can you work well together?
- Alignment of Interests – Are your interests aligned with theirs?
The master's tool in the Exchange stage is trust building and the Negotiator' s Probe.
One definition of Probe:
... a technique employed to encourage the respondent to give a more detailed answer to a question and elaborate on his previous response. Example: "Anything more?" “Why do you think that is fair?” “How did you come up with that solution?”
A Go/No-Go Decision Time in Exchange
If your assessment in this stage of the negotiation process is negative, you make adjustments or implement your Best Alternative to a Negotiated Agreement (BATNA).
If your assessment in this stage of the negotiation process is positive, you move forward. With trust developed, you explore for creative solutions that address interests and see the potential to create real value.
Dive into Bargaining Now?
You will be eager at this point to dive into the Bargaining Stage. Pause to create one critical tool that will guide and protect you for the stages that follow. That is the development of a joint agenda.
Stage 3 – Bargain
Bargaining is where the "give-and-take" happens. If you think success means all take and no give, you won't capture real value. You make and manage your concessions in bargaining. When you give and take that which satisfies both parties' interests, you will build a lasting relationship and a fruitful outcome. During the Bargaining Stage, you continue to create value, and with trades, finally capture value.
- To be trusted, you must be generous.
There are two tools you will need from your negotiator's toolbox in the Bargaining Stage, the Probe and Creativity.
Bargaining is your "face-time" with the other person, even when you are not face-to-face.
Like all interpersonal relations, emotions can help or hinder progress. Specific negotiator's tools and behavioral skills matter greatly here. Finely tuned communication skills are critical at this juncture as you explore options to create value and execute trades to capture value. You will be most successful when solutions satisfy everyone's needs.
Stage 4 – Conclude
Stage 4 is the point in the process when you reach an agreement. It is important to find out if the other side has the capacity to follow through with the things they said they would do. This is the time to put down in writing the common interests and produce a comprehensive summary of the agreement. Sometimes you have to consider strategies here to lock-in a commitment. Be sure to agree on next steps as well. And never forget to thank the other party for their willingness to negotiate – even when no agreement is reached.
Stage 5 – Execute
Stage 5 is implementation of the agreement. This stage may also be viewed as preparation for the next negotiation opportunity. You must ensure that you follow through on promises made in order to strengthen the relationship and to build trust. You will learn more in this stage about the other side. This will lead to easier negotiations next time around. And remember that during execution you are likely to apply the total negotiation process and Best Negotiating Practices (BNPs) to unexpected events, failures in performance and the inevitable changes.
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