Knowing your negotiation environment is critical to using the most appropriate strategy. We call this "Situation Awareness." In most situations you have a choice of negotiation strategies. You will be a much more effective, creative negotiator if you have a good grasp of the situation and surroundings.
Don't confuse Situation Awareness with negotiation trivia. You've probably been told that you should, for example, wear a dark suit with a touch of red to emanate power, or sit at a round table to convey willingness toward teamwork. You may have been told to avoid crossing your arms because it could be interpreted as being closed to ideas, or to use other body language to exude self-confidence.
Really understanding a situation means more than what clothes you wear, the shape of the table or interpretive body language. It means thinking clearly about the relationship or potential relationship you have to the other party and grasping the relative importance of the outcome (i.e., Is it a one-time low-stakes negotiated agreement or is it an important transaction with a great deal at stake for both sides?).
Use the grid below to help you assess situation factors for any negotiation. The grid provides guidelines to help you determine what to do in various situations. Situation Awareness – meaning being fully aware of where a particular negotiation falls in the grid – will help you reach a successful negotiation outcome or help you realize that you shouldn't be negotiating.
- Negotiating trivia, like round tables, the "power suit" and purposeful body language, provides a superficial touch that can momentarily send a message, but is not nearly as important as awareness of your situation, consistency of process, and mastery of Best Negotiating Practices (BNPs.)
- If you do use trivia to send a message, think about whether your message will mean the same thing in another culture as it does in your culture. You don't want to send an unintended message.
Negotiation Situation Awareness
- Situation Awareness is helpful in choosing the most effective approach to negotiate an outcome. Situation Awareness is critical in collaborative (win-win) negotiations because the situation can change in an Internet second. Take a position of power and flaunt it today, and you pay for it tomorrow.
Five Negotiating Styles and Strategies
Competitive (win-lose): Assert your interests and position with no concern for other parties'. Use this approach when there's a need to: 1) make unpopular decisions, 2) stand up for vital issues, or 3) protect yourself. This strategy can only succeed, however, when:
- You have all the power and you know you are right, and
- It is a one-time transaction, and
- You have strong alternatives, and
- You value the outcome more than the relationship, and
- The other side has no way to retaliate.
Avoidance: Find no value in addressing conflict. Use this strategy when interests are not aligned or you need more time to gather information:
- You have little interest in maintaining a relationship or trust building, and
- The outcome holds little value to you, and
- You decide that confrontation is not worth it and would likely end in deadlock or an unproductive relationship.
Accommodation: Focus on the other parties' interests with little concern for your own immediate interests in order to preserve a relationship. Use this strategy when:
- There is a high level of trust between the parties, or
- Outcome, while always important, is not as critical as the relationship, or
- In order to build goodwill for a later time, or
- When you realize you were wrong or made a mistake.
Collaboration (win-win): Satisfy all concerned parties' interests and gain real commitment. The goal is to expand the pie before you divide it.
- Power, information and interests are shared, and
- Relationships are ongoing, and
- Both sides have strong alternatives, and
- Much can be learned by working together, and
- There are creative options for linking common interests to expand the pie.
Compromise (win-lose/lose-win): Make an effort to partially satisfy all parties' interests. A compromise is similar to "splitting the difference." This strategy can be helpful when:
- Stakes are small, or
- Time is of the essence and therefore you need a quick solution, or
- Only after collaboration has failed to produce an agreement, or
- When equally strong parties have mutually exclusive interests and goals, or
- When goals are moderately important but not worth the effort of a more assertive strategy, or
- When much has been discussed and agreed on and only a few issues keep you from moving forward.
Skilled negotiators typically take on all five negotiating styles during a negotiation, They
- Collaborate >> to create value
- Compete >> for the biggest slice of the pie
- Compromise >> when necessary
- Accommodate >> to create goodwill
- Avoid >> when there is no value in an agreement