NINETY PERCENT OF EXECUTIVES LEAVE VALUE ON THE TABLE.
MOST DON'T EVEN REALIZE IT.
During KIN Global 2017 at the Kellogg School of Management, executives and innovation leaders from around the world joined in a workshop to increase their capacity to negotiate and make better deals. Below is a summary of the concepts and tools presented in the special session.
The best negotiators are the ones who come to the table most prepared. They have done their homework, analyzing not only their own goals, bargaining chips and range of possible outcomes, but also those of their counterpart. By the time the actual negotiation process begins, they have a confidence that only comes with a thorough familiarity with the issues.
Through a series of questions that provide a 360° perspective of the issues, the Negotiation Canvas is designed to help even novice negotiators reach better deals. The canvas is a one-page, easy-to-use tool that includes all the essentials you need to be prepared for a negotiation. For more complex negotiations, more time and effort can be spent going into detail in each step of the canvas.
Developed by Pablo Restrepo and Stephanie Wolcott, founding partners of Colombia-based consultancy Aluna Catalyst, the Negotiation Canvas was inspired in part by a similar tool that takes a systematic approach for developing business models. They wanted to bring the same clear-headed rationality to preparing and conducting negotiations. For more than twenty years, Restrepo has been teaching negotiation strategies at universities and for companies all over the world. Recognizing and unmet need for practical tools, he has distilled complex theory and decades of experience into a step-by-step process that can be used to prepare and conduct any negotiation.
Restrepo and Wolcott created a separate business, Negotiation by Design, to focus specifically on negotiation training, consulting and capacity-building services. Negotiation by Design has two core tools: the Negotiation Canvas and the Negotiation Process. The Negotiation Canvas works for any negotiation, whether personal or professional.
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THE NEGOTIATION CANVAS
The ten fields on the Canvas are set in symmetry:
THE NEGOTIATION PROCESS
The second core tool is the Negotiation Process, outlining the seven steps for more complex negotiations:
• Strategic Positioning
• Relationship Building
• Information Exchange
• Review & Value Offer
Preparation begins by filling out the Negotiation Canvas. The first run will help you clearly define your goals, show where information gaps are and identify potential obstacles.
Strategic Positioning is about solidifying and improving your bargaining position. Any imbalance of power must be corrected, which can be done either through finding ways to (legitimately) weaken your counterpart's walkaway alternatives or by boosting your own.
Relationship Building is a subtle but critical part of any negotiation. It is easier to get to an agreement when there is trust and goodwill between the parties. To build trust, you must understand potential cultural differences, look for opportunities to find common ground and meet in person.
Information Exchange also focuses on research, but expands it to include everything there is to know about the other side's organization as well as the team. The more you know the better. Identify the decision-makers and the implementers as all are important to making a sustainable deal. It can be helpful to create a culture of reciprocity and share information about your company and team. Good negotiators are very open about their interests, their preferences and their priorities, and they understand very well the interests, preferences and priorities of their opponent.
Review & Value Offer is about applying what has been learned to determine whether assumptions made during the initial preparation are valid or whether they require updating. This will require reviewing the Canvas again to make sure it is as complete as possible. Once that's squared away, it is time to design an initial offer.
Negotiation is the time to put everything to use to reach a deal that meets your desired outcomes. Navigating the climate of the table is both a skill and an art. This is where the groundwork laid by good relationship-building can really pay off, making it easier to find creative "out of the box" solutions that benefit both sides.
Agreement is perhaps the most delicate part of the process. Never rely on memory. Summarize the terms in writing and document roles, responsibilities, timelines, payment terms and any other issues important to the deal and its implementation. For important negotiations, have a lawyer review before signing.
by Jacob Meschke, Medill School of Journalism