Getting to Yes (part 1 of 4)
Wed, Mar 23, 2011This semester at RMIT, I took a very interesting course, Negotiating Transnational Agreement. Many times in my life, I would need good negotiation skills. I bet a lot of insights would be gained from this course.
In the 2nd week, I had my first team-exercise. We were members of a team of agents representing the Lyric Opera (LO), a local opera house. We would meet a team of agents for a singer named Sally Soprano (SS) who wanted to sing in LO’s next opera. Our team was to negotiate with the other team on the package to pay SS in order to hire her for the primary role of the opera. A lot of information surrounding the case was provided. Choosing which to use was the challenging part of the exercise, since a rule of thumb during a negotiation was “only give up information about us and our position that will enhance our bargaining power”.
Our team prepared for the negotiation by identifying clearly our Best Alternative To the Negotiated Agreement (BATNA), Reservation Price/Position, and Target/Aspiration Price. If we could not reach the agreement with SS’s agents, our BATNA would be to get the secondary role singer to sing as primary role and pay $28,000 as maximum. Nevertheless, that would be our last choice, and we would do our best to get Sally.
The other team was really tough. According to Thomas-Kilmann Questionnaire, they must have had approached us with competing/forcing style, also known as sharks style. There were 5 negotiating styles but none of those was perfectly fit for every situation. I wished I had known which was the best style to deal with sharks. Our team decided to use the method of principled negotiation from Getting to Yes: insisting on fairness. We discussed about why their offer was unreasonable. With their first offer of $50,000, I knew I could push it under $45,000. As another rule, however, you should never accept the offer too quickly. Therefore, we tried to lower the price. In the middle of the session, I felt we were falling in positional bargaining. I got out of that situation by investigating more on our interests and theirs. Our team wanted to ensure good ticket sales and opera’s reputation, whereas they wanted good salary and reputation as well. As a result, we made them contribute more to the opera’s revenue by dividing the salary into 2 parts: fixed salary and bonus (when sales target was achieved).
Being the first to offer doesn’t mean that you can set the price range. In fact, the last one to give a number has an edge in negotiation. We should have known this better. Besides, we should have requested for a confidentiality agreement: because this is an urgent case, the other party must keep the salary a secret so that we won’t overpay other singers in future deals.
Whether to resolve a dispute or negotiate with someone, one of the skills that I always use is listening. It works beautifully; because by listening carefully, I let them know my willingness to collaborate with them to find the solution. Our same opponent is the problem itself, and our mission is to work together to fix it.
Personally, I can’t think of any complaints about this course. It has been more than what I had expected before the semester began. The idea of principled negotiation is so innovative, and it can be applied in every situation.
Bruce Lee once said:
I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.
I will start practicing this negotiation kick from today.