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Rethinking Negotiation Strategy

Author(s):

Jim Mullen


May/June 2008, eSide Supply Management Vol. 1, No. 3

Prepping for Negotiation: Too Much of a Good Thing?
For Boy Scouts, "be prepared" is a solid guiding principle — but supply management professionals facing negotiations would do well to take this advice with a grain of salt. Even though best-selling books on the subject tout preparation as the golden rule of successful negotiations, excessive preparation can actually backfire when all parties sit down at the table. This article examines the biggest drawbacks of excessive preparation: overconfidence, inflexibility regarding the supplier's objectives, and a rigid commitment to unattainable goals.

Why Over-Preparation Can Actually Sabotage Your Goals

For weeks, Helen and Mike prepared for the negotiation with their organization's health care provider. With annual double-digit increases in benefit costs, top management was looking to the supply group for an innovative solution. Given the outcome's impact on the bottom line, plus the visibility it promised with top management, Helen and Mike knew an effective negotiation strategy would be the most important step in the entire process.

Beforehand, they completed all the fundamentals — careful assessment of their interests and their supplier's, as well as the long-term implications of a relationship between the companies. What made their preparation efforts unique, however, was the implementation of a core concept learned at a recent seminar on winning negotiation: Effective negotiators not only play the game well, they design the game to end in their favor before sitting down at the table.

Unfortunately, the result was a disaster. Mutual opportunities were lost, and both sides left the table with a low opinion of the other.

Too Much of a Good Thing?

Pick up any book on negotiation and you will find the cardinal rule of effective negotiation within the first few pages: be prepared. Yet, you will be hard pressed to find advice that addresses two key questions pertaining to preparation:

Are all types of preparation good?
Is more always better?

Several recent bestsellers on the topic of negotiation advocate a process-control approach. In this approach, preparation still involves the traditional substance of the negotiation (identifying interests, etc.), but is primarily focused on strategic moves away from the table designed to alter conditions before the parties sit down together. It is tough to argue against this approach. It seems logical that all negotiations have an underlying structure, that the structure can be shaped, and that it should shape strategy in turn.

But are there limits to preparation? Can it be too much of a good thing? Certainly there is merit to the process-control approach; however, there is also a dark side to it, particularly when used to fuel an attempt to steer proceedings toward desired outcomes. The danger arises when negotiators place too much emphasis on strategy preparation and not enough on learning and adaptation at the table.

Helen and Mike: What Went Wrong

Now we return to our example of Helen and Mike. They were mistaken by the belief that they could engineer the outcome of the negotiation with rigorous preparation. Working backwards from their desired goal, they developed a timeline and identified a critical path. They believed it was simply a matter of controlling the flow of information and managing the interaction to channel the negotiation in their favor once they reached the table.

But Helen and Mike invested so much time and effort in their strategy preparation that they became overcommitted to the results of that process. Their strategy actually became an anchor that created rigidity in their beliefs, which caused them to lose flexibility. At the table, they were not receptive to the creative ideas and compromise essential to achieving mutually beneficial outcomes.

Another consequence of Helen and Mike's over-preparation was overconfidence. They mistakenly believed they understood the other party's interests and preferences, which fostered "selective perception" at the table. This is a common human bias which leads individuals to selectively seek information that confirms what they believe to be true. At the table, Helen and Mike did not listen carefully or ask diagnostic questions — they thought they already knew the answers. Over-commitment, combined with overconfidence, became a self-fulfilling prophecy. It sabotaged efforts to reach an effective agreement with their supplier.

Rethinking Strategy Preparation

Contrary to popular belief, it is possible to be too prepared. In books, the negotiation process is often portrayed as a linear approach, with discrete steps which build a model of planning, followed by implementation. This more-is-better approach to preparation paints strategy as a one-time "burst of learning" before arriving at the table. The result is a unilateral strategy whose inertia freezes beliefs and causes defensive routines when things do not go according to plan.

Preparing for Negotiations

Effective negotiators recognize the limits of planning and avoid becoming anchored by their potentially inaccurate initial assessments. They are willing to abandon their early strategy in the face of conflicting evidence. They view strategy preparation not as a snapshot, but as a continual process of learning and adaptation. No matter how much time, research or critical thought is put into preparation, an effective negotiator cannot predict what the other party will do or say. Successful outcomes, then, require continual preparation until the negotiation ends.

Effective negotiators adopt an interactive view of strategy preparation — that it is a continuous process of acquiring new information and adjusting expectations and strategies accordingly. All negotiations are strongly nonlinear; inherently, they are games involving incomplete information. Interests are never stable and known; instead, they change as new opportunities arise and new information is shared.

Effective negotiators know they cannot prepare for the nonlinear effects in negotiations; rather, they hope they can recognize and adapt to them as they arise. It is best to adopt an emergent view of strategy preparation when strategy evolves incrementally through learning and frequent adjustments versus attempting to design a comprehensive plan and then implement it.

Effective negotiators plan to learn throughout the negotiation and do not lock themselves into inflexible aspirations and positions. Their initial preparation is only a framework. They use it to test their understanding of their suppliers' interests and values, accelerating their learning to devise an appropriate strategy.


Jim Mullen

Jim Mullen is an assistant professor of management at Elmira College in Elmira, New York. To contact the author, please send an e-mail to author@ism.ws.

For more articles and resources on effective negotiating, visit the ISM articles database.

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