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Negotiate Interests, Not Positions

by John Maynard, Georgia SBDC

Have you ever considered how much time we consume negotiating? At home, we debate over what restaurant to go to, argue with the kids over bedtime, or haggle over the price of a used car. In business, we're negotiating contracts, pay raises, or what constitutes casual attire.

Most of us are lousy negotiators, including me. But I've improved over the years thanks to a little book I find myself rereading from time to time. It is called Getting to Yes: Negotiating Agreement Without Giving In, by Roger Fisher and William Ury. My copy is 12 years old. The latest edition has an additional author (Bruce Patton), 45 more pages, a bigger publisher (Houghton Mifflin Co.), and a bigger price tag! But believe me, it's worth it.

Most recently, I pulled out my dog-eared copy after meeting with a client who was complaining about how much time he and a partner wasted arguing over what percentage ownership each should have in a new holding company they wanted to start. I asked the client how he and the partner worked it out.

"I finally threatened to walk unless he gave me what I wanted, which was 67 percent," the client said.

Unfortunately, the two are at it again. Now they're trying to decide how to divide up the ownership of the holding company's subsidiaries. Because the other partner believes he gave up more than his fair share in the first round, he's pushing for a bigger share of the subsidiary companies. My client's fed up again.

I told him that he and his partner need to start over and negotiate based on their individual and joint long-term interests, rather than fighting over arbitrary positions (based on percentage ownership).

Negotiating based on interests, rather than position, is the mantra of Getting to Yes. By focusing on percentage ownership (position), the business partners are behaving like a buyer and seller at a flea market haggling over a velour Elvis painting. According to Fisher, Ury and Patton, parties engaged in positional bargaining attach their egos to their positions. Criticism of a position comes off as a personal attack. Communication fizzles. Depending on the personalities involved, one party tends to give in or both butt heads until the deal falls through. Whatever the outcome, bitterness prevails, making future deals even more problematic.

Case in point: my client.

So how do you move from positional bargaining to interest bargaining, or what the authors call "principled negotiation"?

First, separate the people from the problem. For my client and his partner, the problem is how to get their new business off the ground. Instead, they're focusing on whether one partner is getting more than he deserves. How do you get around the people problem? The authors suggest putting yourself in the other party's shoes.

Second, focus on interests, not positions. For example, the authors describe how the Camp David peace treaty between Israel and Egypt succeeded only after both parties stopped arguing over possible boundaries within the Sinai Peninsula (positional bargaining) and instead focused on their interests. Israel's chief interest was security. It didn't want Egyptian tanks sitting on its border. Egypt's primary interest was regaining sovereignty of Israeli-occupied territory. The solution: return the Sinai to Egypt, which agreed to demilitarize the area.

Getting to Yes provides lots of examples and useful tips, such as how to handle other parties when they're more powerful or don't want to play by the rules.When my children were younger, our "negotiating" sessions ended with my statement "Because I said so." That doesn't work anymore. If my client keeps up his "take it or leave it" stance, his dream of launching a new business will likely stay a dream.

To obtain small business assistance contact a consultant at a Small Business DevelopmentCenter.




John Maynard is a business consultant in the Athens office of the Georgia Small Business Development Center (SBDC) Network. Tofind your local SBDC call the state office at (706) 542-6762 or via the webat www.sbdc.uga.edu.

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