Communications of the ACM
Seven Keys to Effective Negotiation
Credit: The Early Stage
The four men and two women judiciously negotiated their seats at the rectangular meeting table. No one sat at the head.
The parties, representing a Middle Eastern beverage distributor and a multinational beverage company, respectively, exchanged pleasantries, and then got down to business. Could they negotiate a contract in less than an hour?
In this MIT classroom simulation, they came to a verbal agreement, or a commitment, one of the seven elements of negotiation taught by MIT Sloan Professor Jared Curhan in Negotiation Analysis, a new three-day crash course offered during MIT's Independent Activities Period in January.
Curhan explained how to prepare for a negotiation, sharing a framework developed at the MIT-Harvard Program on Negotiation. He emphasized that the framework is not a sequential set of procedures, but rather a set of elements to consider when preparing for a negotiation.
Here, the seven key factors to consider:
- Parties/Interests: Who are the potential stakeholders? Don't just consider who is sitting at the table with you, but consider others who relate to that person. If negotiating with a firm, consider not just the CEO but also the COO and perhaps the needs of the clients.
- Alternatives: "Before any negotiation, ask yourself, 'What am I going to do if I don't reach a deal?'" Curhan says. Consider your "Best alternative to a negotiated agreement." For example, if you are acquiring a product on behalf of your firm, before you approach your preferred vendor, solicit offers from backup vendors.
- Options: Consider creative ways of addressing the interests of the parties. Imagine you ask your boss for an extra week's vacation. If he or she says "no," think of the underlying interests behind your boss's answer and how you might address them. Perhaps you could take an unpaid vacation, or you could train a colleague to do your job in your absence.
- Legitimacy: Prior to any negotiation, develop a list of objective criteria for determining a solution to the problem. For instance, if you are selling your house, think about all the different ways to determine the value of the home, such as assessed value, comparables, and proximity to good schools.
- Commitments: Decide in advance what form your agreement might take. Will it be a contract? A verbal agreement? A handshake? If it's a contract, have a lawyer draw up a term sheet in advance.
- Relationships: Ask yourself if you are negotiating with someone you will interact with a lot in the future or someone you will never see again. What is the cultural background of the person you may be negotiating with? What are their norms and expectations?
- Communication: Decide what mode of communication will work best for achieving your objectives. There are times when face-to-face is the best way to negotiate, and other times when email might be better.
Eighty-two students from across MIT, including undergraduates, master's students, and doctoral students, from chemistry to nuclear science, took the course. Nearly 400 students were on the waitlist, according to Curhan, who was amazed by the demand for the class. "It was such a great mix of students," Curhan says. "That fits the philosophy of the course: no matter what your area is, you can always benefit from learning how to negotiate."
Daniel Lerner, a junior in electrical engineering and computer science, agreed. "I really liked the hands-on experience . . . and I think practice will make perfect," he says.
Other students agreed, giving the course an average subject rating of 6.8 (on a 7-point scale) and an average recommend professor rating of 5.0 (on a 5-point scale). Summing up the experience, one student wrote, "This was probably the most useful three days of my life."
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