Negotiation: Starting from Interests
An essential skill for any negotiator is the ability to negotiate based on interests, rather than positions. If you’ve taken a negotiation class or training, you are probably already very familiar with this concept. (If you haven’t, keep reading.) But do you know how to pull off the skill?
Here are three reasons you might be negotiating from positions instead of interests, even if you know it’s better to be an interest-based negotiator:
First, a lot of negotiators don’t truly understand the difference between a position and an interest.
If you think of negotiating as a problem-solving activity, a position is the pre-determined solution you bring into the negotiation. It’s what you think you want before you even know what the other side has to offer.
Interests are the “whys” behind the positions. They are the reasons for whatever your position is. In fact, interests are the reasons you’re negotiating at all. Again, if you think of negotiating as a problem-solving activity, interests are the problems you’re trying to solve.
Example: suppose you want to negotiate a discount on an order from a long-time supplier. Your position going into the negotiation might be: “I want a 5% discount.”
That is not the same as your interests. Your interests are likely to be things like: “I have a budget I need to stay under” or “I’ve been asked to save the company 10% overall, and this helps me reach that goal” or “I’ve been doing some market research, and I believe I’m being over-charged for this product.”
In a business negotiation, it is almost always better to negotiate from interests than positions, and usually, you should even share some of your interests with the other side. After all, the person you’re negotiating with might have a different way to meet your interests than what you’ve already thought of on your own. Also, if you learn more about their real interests, you may be able to find a win-win solution that will be good for both of you.
But even if you know the difference between interests and positions, and you believe it’s better to negotiate from interests, you might still not be doing it. Why?
The second reason people don’t negotiate from interests is that doing so takes far more effort than it takes to negotiate from a position.
A negotiator has to expend energy and time to decide how to explain their interests to the other side. In our experience, the more transparent a negotiator is, the better. But there are things you’re not going to tell the other side, perhaps because you don’t want to appear naive or maybe because some of your interests involve confidential information that you cannot reveal. If you’re going to start from interests in a negotiation, you’re going to have to consciously and strategically decide which of your interests you can talk about and how. You won’t be able to do that in the moment, though. You’ll have to think about it in advance.
If you were the negotiator in our above example, you might decide that it wouldn’t be very smart to start your negotiation by explaining your budget to the other side. Why? Because you don’t want to have to negotiate all the way up to your budget! Likewise, while it might make sense to explain that your company is making an effort to reduce costs right now, you don’t need to give the other side the specific numbers you are targeting.
On the other hand, it would make a lot of sense for you to be forthcoming about market research that reveals you’re being over-charged. That kind of information is likely to make the other side feel that you are being (a) reasonable and (b) fair about what you are asking for. So when we analyze our interests in this example, we may conclude that you should share information about interests related to fairness and market data, and you should give the other side some information about your cost-reduction efforts, but you should not reveal your budget.
But back to our original problem: how much time did it even take you to read and think through the previous two paragraphs? It would have taken a lot less time simply to start your negotiation with: “I’m looking for a 5% discount” and leave it at that. To start from interests, you have to put in the front-end effort to think through what you’re going to say.
It’s worth it. Skimping on the prep isn’t going to get you the best deal. Still, you’ll have to be proactive about doing that work if you want to be an interest-based negotiator.
The third reason people fail to negotiate from interests is that they don’t recognize the difference between an interest and a position coming from the other side.
The result is that the other side might state a position that leads you to make false assumptions about their interests. For example, if someone states the position: “I’m not authorized to provide more than a 2% discount,” you might assume their interest is in sticking to 2% or less, no matter what.
That’s a mistake! The “why” behind that hard line is probably something like “because my boss told me we need to stay below 5%, and I’m afraid of giving you my bottom line too early.” Or, it might be “because given the order quantities you want, any lower than 2% is below the acceptable profit margin for us for this product.” However, if you don’t recognize the initial statement as a position, you may not realize you need to ask questions to uncover these true interests.
Luckily, there are cues you can listen for to figure out when someone has stated a position. Here are some common ways people begin position statements:
“I want X.”
“I cannot give you Y.”
“I can only give you Z.”
“Unless you can give me A, I cannot give you B.”
Note that the word “because” hardly ever appears in a position statement and that most of these statements sound like final offers. If you hear something like this in a negotiation — particularly in the early stages — be careful not to assume that your negotiation is going to flop. Dig for interests and see where you can go!
Want to see this skill in action? Check out our video on starting from interests here:
Call to Action:
Don’t let lack of preparation stop you from being an interest-based negotiator! Explain what you really need to the other side, and don’t assume they are going to be upfront about what they really need to begin with. Ask questions to uncover interests.
Interested in negotiation training or coaching customized to you? Email firstname.lastname@example.org and let’s talk! You can also check us out at www.vashmc.com.