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Thoughts on Negotiation

Three woman sitting around an office table

A few years ago my ex-Lookahead colleague Georgina shared some great tips on asking for a payrise. It's got some excellent feedback.

Asking for a payrise isn't something we're born knowing how to do. It can be difficult and uncomfortable, and sometimes even agonising. Though, like any skill, asking for a payrise, or negotiating in general is something that can be learned, practiced, improved and iterated upon.

When any negotiations takes place - whether it's with a boss, colleague, customer, client, neighbour or family member - it's good to learn some basic principals, strategies and tactics of negotiation, in order to improve the chances of a positive outcome.

In Georgina's article she mentions Rebecca Shambaugh's four-step framework:

  1. Assess your situation,
  2. Understand your counterpart
  3. Be effective in asking; and
  4. Have a backup plan.

Be sure to check out the article for more info.

To expand upon this framework, I'd like to present the ideas of ZOPA & BATNA.

ZOPA - the Zone Of Possible Agreement

This is the range in which two or more parties can find common ground. If for example you're negotiating salary, it's the zone in which your desired salary range intersects with the salary range your employer or potential employer is willing to offer you.

BATNA - the Best Alternative To a Negotiated Agreement

This is the course of action a party will take if the negotiation talks break down, or no agreement can be reached. If for example you're offered a new job by Company A, the BATNA could be deciding to stay in your current job, or accepting a different job from Company B. In simple terms, it's what will happen if either party walks away from the negotiation.

These can be visually represented like this:

So how can understanding ZOPA and BATNA help you in a negotiation?

Well, it's a huge advantage to know the upper and lower boundaries of a ZOPA. If you can get towards the higher end of your desired outcome, and still keep your negotiating partner happy, isn't that the best of both worlds? A true Win-Win.

BATNA can protect you from accepting terms that are too unfavorable, and from rejecting terms that would be in your interest to accept. On the unfavourable side, you can simply walk away from the negotiation in favour of the status quo. And, on the other side, if the terms aren't as great as you were hoping, but still far better than the status quo, it will hopefully stop your ego from turning down an agreement that's still in your favour.

Negotiating is complex. There are many factors that can contribute to the final outcome. Gaining knowledge on negotiating principles, strategies, tactics and terms - such as ZOPA and BATNA - can help make you a better negotiator over time. It can turn those potentially agonising experiences, into more of an interesting game, helping you to create maximum value in the negotiations and future agreements you reach.

Sources & Further Reading: