All negotiations tend to follow seven sequential stages. Every negotiation has to go through all of these stages whether the participants realise it or not. Problems arise when one or both sides don’t know what stage they are at, or try to skip a stage. Then the chaos stage takes over.
- The seven stages are:
- Climate setting – what is the atmosphere in which the negotiation is to be conducted. Will it be open and friendly? Cool and objective? Hostile or cheeky? What is the timescale for the deal, and the agenda? Who is going to be involved and what’s the venue?
- Exploring wants and needs – what are the items people want in the deal, and more importantly why do they need it? If they want a certain price and you can work out why they need that price then maybe there are other ways apart from price to meet that need
- Coinage – are there any concessions you can make which are of low value to you but meet a high value need or motivation on the other side
- Bidding – making offers
- Closing the deal
Chaos reigns if people skip the first stage of preparation. Many people feel they don’t have time for preparation in our busy world full of emails to send, calls to make and meetings to attend. However, missing out on preparation means preparing to miss out:
Who is in your team? What roles will they play? What’s the bargaining power on both sides? What are your risks of doing the deal? What are the alternatives? What is your ideal outcome? What is your bottom line? What does the other side really need? Is there any history? How are they likely to behave as individuals? All of these issues are much easier to think about in advance rather than in the heat of the haggle. Failing to prepare will leave at least one side very confused.
A similar problem arises if the climate stage is skipped, if I think the negotiation is going to last 3 months and you think it is going to last two hours then that mismatch of expectations will prove disruptive later on.
A further problem arises if we are at different stages of the negotiation. If I think we are just getting to know each other and you think it’s time to get down to some serious bargaining then I may not respond to your pressure to get on with it very well.
So, if the negotiation seems somewhat chaotic, check whether everybody is at the same stage, or if any stages have been missed go back and address those before dealing with anything else.