Building the Foundation for Successful Negotiations
When you’re working on a negotiated settlement for any type of transaction, you want to approach it in a manner that maximizes your chances of achieving your desired outcomes. Whether it’s handled through a mediator, negotiator, arbitration, or attorney, you want to ensure that beyond the facts and structure of your intended deal, you also develop a strategy for working with the opposing party.
The Power of Patience in Deal-Making
Frequently the most effective efforts and results emerge from a deliberate, unhurried process. You don’t want to rush it. You want to collect information from the other side. On the screen, you’ll see an example of a proposed timeline of a discussion with a counterparty in a negotiation.
Day One: Setting Collaborative Expectations
On day one, you have a message that tells the other side you’re intending to resolve it. You want to give them positive reinforcement that you want to resolve this. You’re not being combative. You’re not trying to resist. You want to resolve this. So it puts them in a frame of mind that you’re both working together. But you want to redefine the expectations. You want to let them know that they’re not going to rush you into a deal. Maybe prior negotiations are going to be started over.
Information Gathering Phase
Then you want to wait a few days and you want to send a message that asks them some questions. Gather some facts. What is of interest to you? What are you trying to accomplish? You want to create some uncertainty because if you come out offering things or forcing things now the other side can have some stability in what they know about you. You want to get information about them first.
Strategic Pressure Application
And you want to wait another couple days and you want to state a fact about the case, something you know about them, something you know about the contract, something you know about the circumstances that is not beneficial to them. Basically, you want to find some dirty laundry about the deal and you’re going to put that out there. What does that do? It’s going to create some imbalance for that person. It’s going to create some throw them off kilter a little bit.
The Confidence Restoration Technique
And then the next day, you want to come back and do the opposite. You want to create some confidence by telling them something that helps them. You want to put them on a little bit of a roller coaster. Maybe wait another day or two and then ask their thoughts.
Eliciting Their Position
Going to elicit their position on the matter. You want them to tell you where they stand. There’s an old saying in negotiations, the first person that talks loses. So, you want to get them to put their position out there. By going through the last few days, you put them in the best opportunity to have them tell you things. They’re going to try to rush it now. They’re going to want to get out of this chaos of this conversation.
Position Lock-Down Strategy
Then maybe wait a few more days after that and go back and ask them qualifying questions about their position. If they said, “Here’s what I want to do for this deal.” You can say, “What do you mean by that?” very open-ended question. Now, they’re going to fill in some of the blanks about their position, about their point of view. So, now they can’t change it later. It’s called locking down the position. And again, this is oversimplified. And in a real negotiation, each of these would have very carefully worded, thought out, scripted language to go into it. But this is just a deal flow example.
Confirmation and Leading Questions
Then wait another couple days and ask a leading question. Are you saying that this is what you want to do? So again, you want to reconfirm where they stand once they’re locked down.
The Hypothetical Offer Presentation
Now you can at this point and here it’s day 16, could be two weeks later. You’re going to present your offer, but in the form of a hypothetical. It’s going to be if I could do this, would you? You’re not committing to anything. You’re putting it out there as an option for them to commit to. And you want to create some doubt. Look, I’m not sure if I could do this. I don’t know if I want to do this. This seems like a very big stretch for me, but if I could somehow find my way to do this, would you be willing to whatever? Right? And it’s an if I could, would you? And it creates a model of that resolution that now people can wrap their head around.
Closing with Directive Leadership
And then once you see that the other person’s agreeable to it, then you’re going to close the transaction with a directive solution. You’re going to say, “Here’s what we’re going to do. We’re going to do this. I’m going to create the paperwork. We’re going to sign it.” You want to take the lead, but you can’t take that shot unless you know it’s going to work. And that comes from the if I could, would you?
Strategic Planning is Essential
So, this is just one example of a structure strategy of a negotiated settlement. We work on these all the time. If you’re in the middle of a hard deal, a hard negotiation, and you want to execute it properly, don’t just fly by the seat of your pants. Don’t just take it day by day and be reactive. Have a strategy to begin with what you’re going to want to accomplish. It’s kind of like a football team not having a plan for what plays they want to run. You want to have the next five plays that you’re going to run already scripted and strategized so you get the best result from your negotiation or mediation.
