Clarify Your Positions and Theirs

YOUR POSITIONS are the starting points. They include where you are coming from, where you are going, and how much or how little you can or will accept. These are your criteria or “boundary conditions,” as described in the Harvard Negotiation Project chapter. They are the constraints, the limits, the factors that must be dealt with and resolved in the agreement.
Your position consists of your best and worst outcomes, plus the minimum and maximum range of prices and terms that you can accept in reaching an agreement.

Clarity Is King

What are your essential conditions for a successful negotiation? What must you get out of this process in order to make it worthwhile? What are the most important things that you must not give up, no matter what happens? And what are you willing to concede in order to get your essentials?
What sort of tie-in concessions can you ask for or offer? The rule is to never give a concession in a negotiation without requesting another concession in return. If you concede anything in a negotiation without requesting something in return, the other party will consider this a sign of weakness and will demand additional concessions for that reciprocation.

Know What You Are Dealing With

What are the essential desires or outcomes of the other party? Do everything possible to discover and consider the other side’s minimums and maximums. What must they absolutely achieve or receive in this negotiation?
Some time ago, I negotiated a lease for office space. In my pre-negotiation analysis, after some research, I found that the owner could only lease the premises under certain terms and conditions. He had to receive a certain amount in the lease agreement or the mortgage holder would not approve it. With this information, I knew that the owner’s essentials were within specific parameters.

There were many factors in the lease agreement that could be negotiated by the landlord. But the basic rent was controlled by the mortgage holder. I could discuss the amount of free rent, parking, and so on with the building owner, but the rent had to be at a specific minimum or no approval was possible.

I also knew that the building owner was going through certain financial difficulties, and in order to keep the building, he had to lease out more than 80 percent of the building within a short time. Knowing the owner’s essential requirements made it possible for me to negotiate a much better lease in terms of tenant improvements, common-area expenses, and parking for my staff.

REVERSING THE SITUATION

One of the best ways to improve the results of any negotiation is for you to argue the case of your opponent before you begin preparing your own case.
In law school, students are taught to take the case of the opposing party and put together a complete argument based on the facts of the case as if they were acting for the other party. Only after they have prepared the case for the other party do they prepare their own case.

This exercise enables an aspiring lawyer or negotiator to think through honestly and objectively the strengths and weaknesses of the opponent in a negotiation. This same technique can give you a far better perspective on what you will be discussing with your counterparties, enabling you to anticipate what they are likely to ask for and the strength of their arguments.

Always reverse the situation before you begin. Put yourself in the position of the other party. Imagine that you are the other person and you want to get the best deal possible out of this negotiation. If you were the other person, what would you be asking for? What are the strengths and weaknesses of your position? What is more important, and what is less important?

LESSONS FROM NEGOTIATING A LEASE

When I was negotiating a new office lease, I was up against a landlord who was difficult and demanding. My weakness was that I wanted the convenience of staying in my existing offices, but I did not want to be tied to a five-year lease. I wanted the flexibility of being able to move to larger space or to downsize if necessary.
Before the negotiation, I sat down with a piece of paper and wrote out everything that I could think of that the landlord would ask for. My list came to about twenty items. Then, I prepared my own side of the negotiation on another sheet of paper.

To this day, I look back in some amazement at how much better a deal I was able to negotiate by thinking through his position in advance. Instead of spending several hours in discussion, we managed to resolve all the issues in about thirty minutes.

Think It Through in Advance

In each negotiation where I have used this technique, the results have been the same. I have always gotten a better deal for myself and created a win-win situation for both of us. Remember that, in a negotiation, each party has issues that are extremely important and other issues that are of medium to low importance. The reason that a negotiation is successful is that both parties are able to achieve their most important goals while compromising on the less important goals. By writing all of these large and small goals on paper before you begin, you will think with greater clarity, negotiate with greater effectiveness, and get a better deal.

Ideal Outcomes for All

Some years ago, I was preparing to fly to New York to negotiate a contract that would result in revenues to me in the hundreds of thousands of dollars. I sat down with a piece of paper and wrote out exactly what the ideal solution would be for me. We had set aside an entire day to negotiate the terms of this contract. But instead of starting with the contract, I instead asked my counterparts, “If this discussion was completely successful, what would be the perfect outcome for you?”

They were a bit surprised at the question, but they answered honestly. If this contract discussion worked out perfectly well, they said, it would be at this price (which they stated) and these terms. That would be ideal for them and, in their mind, ideal for me.

In return, I told them what would be the ideal outcome for me, which was not very far off from their goal for the negotiation. We quickly agreed on all of the small details and then finalized the major issues. Instead of eight hours, the entire discussion took less than two hours, and everybody was happy and satisfied at the end.