In this blog-post, an attempt is made to present a negotiation-cycle
comprising of following steps: -
Initial
State à Negotiation à Agreement à Execution à Final State
The
negotiation step in this negotiation cycle is further represented through
following 5 step negotiation process: -
Clarity à Trust à Risks à Conflicts à Convergence
The purpose is to present a possible process to negotiators dealing multiple stakeholders.
(1)
The Negotiation Cycle
Negotiation happens in many areas of life, such as business
deals, workplace discussions, conflict resolution, and even everyday situations
like deciding plans with friends. But, what exactly negotiation means?
“Negotiation is the process by which parties bargain in an
effort to reach an agreement. Parties often negotiate the terms of a contract
before entering into it.” (Ref – Cornell Law School)
We will assume that a negotiation is a structured process of
communication and bargaining between two or more parties intended to reach a
mutually acceptable commercial or legal agreement regarding rights,
obligations, or transactions.
Let us go deeper and try to build an understanding on
negotiation. Elaborating on the above definition, it may be reasonable to assume
that negotiation happens to reach from an “Initial State” to an agreed “Final
State” following the steps given as under: -
Initial State (Pre-Negotiation Arrangement) à Negotiation (amongst Stakeholders) à (Binding) Agreement à Execution (of Agreement) à Final State (Post Agreement
Arrangement)
We may call this as Negotiation Cycle and can be represented
as following 5 steps: -
Initial State à Negotiation à Agreement à Execution à Final State
The initial state is the given (AS-IS) scenario.
Usually there are problems in the initial state and negotiation takes
place to solve the problems by executing a mutually agreed agreement
to reach a final state (TO-BE). This final state is expected to solve the problems (which were
being faced when at the initial state).
In the next section, we will dig deeper into a possible
process any negotiator may consider to bring all the stakeholders to negotiate
and converge to an agreement.
(2)
The 5 Step Negotiation Process in Reference
to Negotiation Cycle
In this section, we attempt to develop step by step process
to help professional (and non-professional) negotiators, while conducting
negotiations amongst stakeholders. This process is executed under "Negotiation" step in the Negotiation Cycle. We may call this process as Negotiation Process and
the steps in the process are as under: -
Clarity à Trust à Risks à Conflicts à Convergence
These steps are explained under the following points: -
1.
Clarity
and Conviction for Intended Benefits (Clarity)
A negotiator must be convinced that there is a merit in
reaching Final State from Initial State in the Negotiation Cycle. So, to say,
that the transformation (reaching from Initial State to Final State and
sustaining at the Final State), which is brought about by the transition (executing
a binding agreement) has an advantage (which can also be considered as solving problems
being faced in Initial State). The endeavour to go through the Negotiation
Cycle is the motivation to reach position of advantage and benefit out of it. The
promise of this motivation is expected to foster and to bind the agreement
amongst the stakeholders.
Thus, a negotiator must first get a thorough understanding on
the mechanics of operations in the Initial-State to the mechanics of operations
in the Final-State and more importantly sustainability of Final-State to
produce intended advantage for the stakeholders.
This clarity is most important as a negotiator needs to be
perceived as convincing, credible and knowledgeable expert, who supports
stakeholders taking positions in the interest of transformative advantage
without any other motive.
Initially the negotiator may present the idea in letter and
in spirit that fuels the efforts to traverse the Negotiation Cycle. All the
queries, confusions and information relevant to stakeholders be addressed at
this step.
2.
Mutual
Trust and Intent to Execute (Trust)
Once things look clear to the stakeholders, trust is the next
important factor to take the negotiation forward.
The output of negotiation is agreement amongst stakeholders (as
per Negotiation Cycle). This is followed by execution than to reaching the
Final-State and eventually to reaping the outcome in terms of sustaining at
Final-State for perceived advantage.
In this process, assurance of holding-on to the agreed
positions in the agreement by stakeholders and going ahead keeping commitment
to play respective part during the execution are the two major apprehensions a
negotiator has to deal with during any negotiation. Further, keeping all the
stakeholders convinced that execution will continuously be focused on
achievement of outcome could be challenging.
Trust amongst stakeholders keep the negotiation engaged towards
a prospective agreement. Developing mutual trust amongst the stakeholders is a
subjective matter and may greatly get influenced by socio-cultural norms or impactful
legal dispute resolution system in place.
However, a negotiator may assess the stakeholders for any issue
with trusting fellow stakeholders or the viability of proposed benefits in the
end of the Negotiation Cycle. All the possible efforts for alignment must be
done at this stage. In case, it is observed that there is an extremely vulnerable
stakeholder (with respect to issues pertaining to trust), the negotiator may
try to build address concerns of this stakeholder with others in a consensual
way.
Sometimes, a possibility of introducing a mechanism for
compensation to extremely vulnerable or risk averse stakeholders in case of
unforeseen circumstances can be helpful.
3.
Articulation
of Ground Realities and Realistic Prospects with a Neutral Position (Risks)
Once clarity on negotiation cycle and mutual trust has been
achieved it is worth deliberating on execution (as per negotiation cycle) and executional
risks.
The proposition of benefits of transformation looks promising
but the ground realities to reach to a position to reap the benefits are often grounded
on rough realities coupled with unforeseen risks hidden in futuristic promises.
A negotiator may maintain information symmetry and neutral
position in articulating the risks associated with the agreement, execution
plan, sustainability of Final-State and with reaping the benefits (through the
advantages achieved after reaching to Final-State).
Mitigation to known risks be allowed to be part of
negotiation discussions. To address
unknown risks, agreement on guiding principles be finalized so that in case of occurrence
of such unknown risks, a resolution be achieved with minimal conflicts amongst
the stakeholders.
A transparent monitoring plan with options to renegotiate in certain
circumstances (like – situation get unfair to any stakeholder with respect to
spirit of the initial agreement) could be helpful. A communication plan tuned
to the monitoring plan also helps in keeping stakeholders adequately informed
with the proceedings and guide them with possibilities in foreseeable future.
4.
Reduce Differences to Core Conflicts and
map them to Vested Interests (Conflicts)
Once the deliberations on execution and executional risks
have been rigorously conducted, the entire negotiation cycle is expected to be
crystal clear to all the stakeholders. Probably, this is good time to start
understanding the differences amongst the stakeholders.
Differences are natural and more so when stakes are high on
an endeavour. Differences amongst stakeholders may be reflection of
underlying conflicts. Therefore, a negotiator may try reductional approach to
breakdown differences to lesser numbers of conflicts and conflicts to still fewer
numbers of core conflicts.
Core
conflicts can be understood in terms of vested interests. The negotiator may decode
the core conflicts and objectively link them to vested interests but may refrain
from any attachment to the interests of stakeholder. It is better to remain at
a distance and illustrate the facts in polite, firms and indifferent way. The negotiator
be seen as solely concerned about the achievement of intended benefits by
making the agreement to happen with mutual consensus.
While understanding
the vested interests and working towards resolution be left to the stakeholders
themselves, a negotiator may try to help in rational understanding of interests
and related consequences to the larger objective of the negotiation cycle. Illustrations
on how competitive interests can be made collaborative and how to shift attitude
towards interests from compromising to accommodative could present helpful guidance.
5.
Allow Deliberations to Foster an
Agreement (Convergence)
Having elaborated
on clarity, trust, risks and major areas of conflicts with utmost honesty and complete
fairness, a negotiator has set the stage for open discussions, debate and deliberations
amongst the stakeholders to converge at in-principle agreement.
By now, all
the stakeholders can see through the end-to-end negotiation cycle with clarity and
understand the dynamics of negotiation cycle with the help of above-mentioned
negotiation steps. They have developed a thorough understanding of core conflicts arising from vested interests (or interest groups). Thus, they are well prepared to bid for investment, positions and stakes in the endeavour.
In this stage
stakeholders conduct give and take of vested interests to manage conflicts,
dissolve differences and eventually come to a broad stake holding arrangements
with an outline of roles, responsibilities and duties to be performed for realization
of promise of transformation the negotiation cycle proposes.
It is not unlikely
that power dynamics and social positioning may have had influence in resolution
of vested interests, stake-holding pattern and conditions of the agreement. Sometimes,
these factors may have shaped the agreement in such a way, which may not be in
the best interest of outcomes of the exercise being undertaken though the
negotiation cycle or even may not be as per the prevailing notion of justice. However,
in the capacity of a negotiator, it is better to ignore such aspects leaving them
to be handled by the society at large.
Once an in-principle agreement has been reached amongst the stakeholders with broad agreement on conditions, provisions and schedules of the agreement, a draft agreement with finer details be prepared (with due consideration to legal, commercial, social aspects) and put-up for formal approval by stakeholders after following the due process.
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