KEY ELEMENTS OF NEGOTIATION – RELATIONSHIPS

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Too often, people believe that negotiation is all about doing the deal and nothing else – that a negotiation is successfully completed once we have made an agreement, and/or signed a contract to formalise that agreement – however, the deal is never done unless we establish and preserve the working relationships needed to perform the agreement.

Unfortunately, too many negotiators consider that a signed contract or formal agreement represents the consummation of the deal which cannot be further from the truth – the deal is not just the contract – it also extends to the working relationship that embodies and is committed to carrying out the agreed contractual terms.
Many people are often tempted to use all means at their disposal (including power, force, deceit etc) to obtain easy, short term gains at a cost to the other party (and long term relationships) – this follows the win/lose mindset of positional or distributional bargaining with its focus upon claiming value. It is worth noting however, that you may well encounter the same party again during future negotiations that may involve much higher stakes – without a good relationship your chances of success will be limited and much more difficult to achieve. So look to negotiate an agreement that delivers the best outcome while preserving long term relationships.

Strong relationships provide the foundation for joint problem solving and mutual gains value creation. They promote better outcomes by expanding the pie before it is divided, while long term relationships reinforce a commitment to the deal and support future deal making.

Drawing and building upon the work of Fisher and Brown (1988), it appears that the basis of a good relationship relies upon the following 8 elements:

• Balancing emotion with reason
• Good communication
• Mutual understanding
• Reliability and Trust
• Mutual acceptance and acknowledgement
• Affiliation and Rapport
• Integrative diversity
• Power with (side by side), not power over (control)

Balance emotion with reason:

It is important to separate the relationship (people issues) from the substantive problem (concerns) and pursue both independently – the long term relationship should not be motivated by or dependent upon reaching a particular agreement – if this was so, we would be more likely to damage rather than preserve relationships. The use of objective criteria and fair standards can effectively counter and balance emotional claims.

Ensure our emotions (bias, fear, greed etc) do not cloud reason when we negotiate and undermine our interactions and future relationship (Fisher and Brown: 1988). Negative emotions have the capacity to distract you from the substantive problems to derail negotiations and damage long term relationships. In contrast, Positive Emotions can strengthen relationships (Fisher & Shapiro:2005).

RELATIONSHIPS

Communication and Mutual Understanding: Listen actively and more than you talk – through listening we get to know the other party, their ways of knowing, values, interests, fears, aspirations etc. With this knowledge we can prepare to tailor our communication and negotiations so that we can. ‘Speak a language’ that both you and the other party understands. When we actively listen, we engage the other party, assuring them that they are being heard, acknowledged and valued – it also allows you to paraphrase and reframe comments you hear in more positive terms that you feed back to the other party. Active listening reduces defensiveness and promotes cooperation.

Relationships provide the necessary associations and connections through which we communicate and negotiate.(Lewicki, Saunders & Minton:1997), without strong interpersonal relationships we are less effective in our negotiations. Similarly, effective communication strengthens our relationships which in turn strengthens our communication and mutual understanding.

Mutual acceptance and acknowledgement: Fisher and Brown advise us not to rely upon partisan perceptions in the knowledge that people see things differently. Good working relationships acknowledge and appreciate (accept) that we all see the world through a different lens We must first seek to understand how the other party views the world differently (their way of knowing) if we hope to be understood ourselves.

Reliability and Trust: Trust is an element where you leave yourself vulnerable to another party in the belief that they can be relied upon to be benevolent, not take advantage of you and reciprocate by giving back to fulfil your expectations (Olekalns M. et al:2002) – trust is relied upon as a predictor of future behaviour. If parties cannot rely upon the other party to reciprocate, they have little trust, and relationships become derailed and mired by suspicion. Trust provides the lubricant to smooth communication, improve coordination and interpersonal relationships. The stronger our interdependence the stronger the trust will be.

Interestingly, reliability underpins trust – it provides a degree of certainty in future events or promises based upon past experience. To build reliability and trust you should say what you mean and mean what you say to – do not offer false promises or set out to deceive – remember, if you deceive another party to obtain a short-term result, you are likely to face your next encounter together as strong adversaries, where trust is absent and so is the motivation to work together. Contingent contracts or ‘bets’- i.e., penalties or rewards/incentives agreed upon as a guarantee to offset the level of risk associated with a future, promised event eventuating is a clear example of reinforcing trust in a relationship.

Affiliation and Rapport: Affiliation provides a sense of connectedness with others – it reduces the emotional distance that separates us and leads to disagreement, so that we feel closer and more comfortable working together side by side to solve problems and create value during negotiations. Work at finding and discussing the links and reasons that bring you together (Fisher & Shapiro: 2005).

Integrative Diversity: While strong relationships rely upon the development of a sense of affinity and affiliation (Fisher & Shapiro: 2005), this does not necessarily mean that we must all have shared values, think alike, minimise differences and agree easily. It is through diversity (resources, perspectives, knowledge, competencies etc) that we create value – we need to develop relationships that value and deal with differences and diversity (Fisher & Brown: 1988).

Power With: A concept proposed by the pioneer of integrative bargaining, Mary Parker Follett. Again, people rely too often upon using their power over others to influence or get what they want – this ‘power over’ approach is self limiting ( a finite individual resource) and produces limited outcomes (the fixed pie mentality) – in contrast the development and exercise of ‘power with’ presents both the opportunity to create more value and to effectively block seemingly more powerful singular sources of power.

Strong relationships (including relationship networks) increase your negotiating power. Examples of ‘power with’ include the development of supportive and/or blocking coalitions, collaborative networks, joint ‘mutual gains’ problem solving approaches to negotiation etc – we can satisfy our interests far better by pooling our diverse but complementary perspectives, knowledge, skills, expertise and resources than what we could possibly achieve alone.

Sometimes the relationship is worth much more than a certain agreed outcome, either as intrinsic value ( the pleasure the relationship provides) or instrumental value (the benefits it promises) (Lewicki, Saunders & Minton:1997). Strong long term relationships also support the accumulative deal effect associated with repeat negotiations/business that outweigh ‘one off’ deals. Accordingly, relationship interests often mean more than a singular deal.

If you would like to have Peter Spence as a speaker, advisor/coach or trainer at your company, group or organisation please contact Peter via the website contact form or by email at pmspence@bigpond.com and learn to become a better negotiator.

The key to success

SPANS will provide you with the key to negotiation success by helping you to become a more proficient negotiator, assist you to achieve better outcomes from your negotiations and strengthen your relationship network.

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