The Negotiation Cookbook

The Negotiation Cookbook

A negotiation recipe based on a course held by Dr. Remigiusz  Smolinski.

Before enjoying a meal one needs to prepare it.

  • First, know your own preferences – fish or meat.
  • Second, think about, what happens if you oversalt the soup. Do you have to dine in a kebab shop at the train station, or in other terms, what is your best alternative to a negotiated agreement (BATNA)?

While you plan the menu you may also want to estimate the taste of your guest. What other restaurants in town could he choose, if he didn’t like your proposal?

  • Compare the interests of both parties. If they match at least partly you have found a zone of possible agreement (ZOPA).

 

Now, image yourself at the bazar, haggling over the price of carrots. The clever merchant opens bargaining with an outrageous price of 20€ per kilo carrots, thereby anchoring his number in your mind. Since you set yourself a target of 5€ per kilo you are not intimidated by his offer and immediately re-anchor at 2,5€. Now tensions are rising, both sides feel insulted, don’t want to loose face and thus do not reach an agreement above their respective walk-away price (reservation point).

[button type=”icon” icon=”question”] Is there a way out of this pure win-lose situation ?[/button]

 

 

Dr. Smolinski’s cook book recommends the “Principle based Negotiation“, or in Europe also known as “Harvard method“. This integrative negotiation method, described by Roger Fisher and William Ury in the famous book “Getting to Yes”, focuses on creating value to all parties of a negotiation. It builds on four major steps:

[box] 1. Be soft on the people and hard on the problem.

As the adage says: You always meet twice. So, establishing or sustaining a good relationship with the other side of the table is always worth a try.[/box]

[box] 2. Focus on interests not positions.

Imagine two sisters arguing about an orange. Both of them insist on getting as much as possible. In the end they decide to cut the orange into two halves. One girl uses the peel to flavour a cake and throws away the fruit while the other one decides to press out the juice and throws away the peel. Had they disclosed their real interests – flavour and juice – rather than sticking to their position – half of an orange – they would have been better of, both. All too often negotiators “leave money on the table”.[/box]

[box] 3. Invent options for a mutual gain.

Be creative to find concessions than will benefit one side without harming the other. It is easy for a vegetarian to compromise on apple strudel rather than chocolate mousse as a dessert as long as he can avoid the beef steak as main course. [/box]

Finally, principle based negotiation recommends to insist on using objective standards to determine the outcome of a negotiation. But HHL-alumni Remi Smolinski asks: is there such a thing like an “objective” standard? Nine out of ten sommeliers will recommend white wine to accompany fish: will you break an objective law by preferring red wine or is it rather a subjective question of taste?

Every step of the theoretical foundations presented by negotiation chef Remi was supported by practical exercises: MBA students haggled over a multi featured luxury automobile named Mustbach, airport extension in Hamburg Finkenwerder and a tariff dispute in a steel company. Soon after starting each of these negotiations students forgot this was only an exercise and got involved.

In my opinion the negotiation course is one of the most powerful courses in the MBA curriculum, because it directly applies to everyone of us in our everyday life and work. Though some of the negotiation tips we already unconsciously knew and applied, Dr. Smolinski made the mechanics visible and provided a useful framework to conduct future negotiations.

Key learning: for mutual satisfaction it always helps to enlarge the pie before cutting it into pieces. But claiming a bigger portion of the pie in an amicable way still is a necessary skill of every negotiator.

Now we can answer the question: While the merchant on the bazar certainly masters the pie claiming skill and fools his one time customer – the German tourist –  the wise diplomat knows: “Your goal is not to win over them, but to win them over”.

Clemens Schülke (P5)