How to Use the Master Negotiator's Preparation Form

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How to Use the Master Negotiator’s Preparation Form™ [MNPF]
One of the main values of preparation is determining, if in fact, negotiation is
necessary or if there are any other courses of action that you can take to solve the
problem. If negotiation is necessary, then being fully prepared will make you more like
Master Negotiators who come to the table incredibly well prepared while their more
amateur counterparts come to the table overly confident and under-prepared -- and it is
much better to find out that you need to do more preparation before rather than during the
negotiation. That said, no one would want to use the Master Negotiator’s Preparation
Form™ (MNPF) for every negotiation they were in, as that would clearly be a great
waste of time. In fact, for most negotiations, you may only need to fill in the interests,
prize, options and BATNA sections in order to be as well prepared as necessary for the
negotiation. For example, if negotiation is necessary and you don’t have a good BATNA
it can help put the importance of the negotiation into perspective. We should always be
able to answer the question – What will we do if we are unable to negotiate a suitable
agreement?
However, for your most important negotiations, not only will you want to fill the
form in, you will want to go over the form with a trusted advisor(s). In fact you may
even want to role-play the negotiation in order to be fully prepared. The use of the form
will also help you to determine how many negotiations you may need to undertake in
order to solve a problem. For example, sometimes you may have to negotiate with your
boss in order to negotiate with a client.
Identifying Your and the Other Party’s or Parties’ Interests
Identifying your and the other party’s or parties’ interests is key to developing
creative options and negotiating successfully. Positions are rigid and tend to be either
your way or my way. While positions lead to escalation and stalemates, interests lead to
creative solutions.
Although identifying interests is integral to the negotiating process, one of the
most common mistakes that negotiators make is not accurately or thoroughly identifying
both parties’ interests. Interests answer the question why that particular issue is
important to us. More specifically, interests are based on one’s goals, expectations,
aspirations, hopes, needs, and fears.
Let’s say that a contractor did some work on your home and you found the work
less than fully satisfactory. Asking for a $400 refund would be an option and/or a
position. Asking for fair compensation would be an interest. We know that fair
compensation is an interest because it can be met in various ways such as a cash refund,
the contractor could do additional work on the house, and/or the contractor could
purchase things for us that we would need for the house at a discount, and/or the
contractor could make a donation to our favorite charity.
 2003, Brad McRae, McRae & Associates, Inc.
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The Prize
The Prize is the ultimate outcome you want from the negotiation. It is not the
same as your interests, even your interests all lumped together. The prize can be at a
concrete level, an abstract level, or both. For example, in the case of Andrew’s CD
player, my concrete prize was his safety; the abstract prize is to enhance the relationship I
have with my son. That is by having a creative, mutually acceptable outcome; he will
feel freer to approach me with problems that will arise in the future. Also, in this
particular negotiation, we had a robust outcome that can serve as a “mental model of a
creative solution” that we can use in future negotiations. In a business, the Prize may
be to become a Centre of Excellence. Therefore, you will negotiate much more
proactively and purposefully by keeping this goal in mind.
Options
Options refer to options for a settlement at the negotiating table. Options are
developed by brainstorming. The three rules for brainstorming are: 1) no criticism, 2)
every option is worth considering, and 3) deciding which options are valid takes place
only after the brainstorming session is completed. In many cases, seemingly unrealistic
options are the catalyst for a creative and practical solution.
The purpose of the “Rule of Four” is to generate a final solution that is robust and
creative so that gains are maximized for both parties. There will also be times when
neither party will be able to think of creative solutions. In cases like this, the parties can
take a break from the table and/or ask for creative ideas from third parties. We have all
had the experience when we thought a negotiation was hopeless, however, when we
mentioned the issue that was deadlocking the negotiation to a colleague, friend or
advisor, that person will come up with a creative solution that we may never have thought
of in a million years. The major difference is that Master Negotiators are more likely to
take timely breaks from the table and/or to ask for advice than their less successful
counterparts.
Standards/Objective Criteria
Objective standards or objective criteria can make the negotiating process much
less difficult by helping the parties look at the negotiation much more objectively. Let’s
suppose that you had a 1998 Honda Civic and you had decided to sell it privately and I
wanted to buy it. Rather than pick a price out of thin air, we both could look up the retail
value of the car and that would be one possible standard. We could also go to the
classified section of our local newspaper and see what comparable cars were selling for,
and/or we could go online and get an estimate of what the car was worth. And there are
many other standards we could look at, such as the recommended selling price in books
like Lemon Aid. These objective standards could help us determine a range in which the
selling/purchase price of the car should reside. However, most sources have different
prices depending on which options the car has and how good or poor shape the car is in.
Therefore, many times the focus of the negotiation is how can we agree as to which
 2003, Brad McRae, McRae & Associates, Inc.
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standard or standards should be applied in this particular negotiation. Many negotiations
can be more effectively and efficiently resolved once the parties can agree on external
criteria or on a method or process to measure the potential cost savings to one or more
parties.
BATNA (Best Alternative To a Negotiated Agreement)
Your BATNA is your walk away alternative. Your BATNA is what you will do
if you can’t reach agreement. One good way to put your BATNA into perspective is to
imagine the worst case scenario.
For example, suppose my spouse and I need to sell our house because my spouse
has been transferred to another city. We then subsequently found and purchased the
house of our dreams in the city we are moving to. Let’s further assume that the bottom
suddenly drops out of the housing market in the city in which we currently reside, and
you, as an astute negotiator know we are desperate to sell our current home because we
can not afford to pay mortgage, heat and insurance on two houses. You also know that
we have not received any other offers on our current house and you make an offer that is
substantially below the fair market value for our home.
If I didn’t have an alternative, you would be able to purchase the house at a great
discount, but since we live across the street from the local university; my BATNA would
be to rent the house until the housing market improved.
However, just because you have a BATNA, does not mean that you should use it.
If fact, if both party’s BATNAs are clearly unattractive, you may have a WATNA.
WATNA (Worst Alternative To a Negotiated Agreement)
Your WATNA is a powerful technique to get the parties back to the table and
bargain in good faith because the WATNA is a clearly unattractive outcome for all of the
parties, and by helping the participants see how attractive it is to have a negotiated,
mediated, or arbitrated outcome.
Trade offs/Concessions
Negotiations are often about trade offs and concessions. By writing down your
trade offs/concessions you will be more likely to make sure that you have at least four
options, it forces you to think of the correct priority in which you should offer your trade
offs/concessions, and it protects you from putting offers on the table prematurely and/or
being overly generous. For example, if I am negotiating with Mark, and we suddenly
have a breakthrough in the negotiations because Mark puts a creative solution on the
table, if I reward Mark by putting a concession on the table, and then realize that I was
being too generous, it is very difficult to take that concession off of the table. Lastly,
when you prepare with advisor(s), they may see a concession that you could make that
would be of great benefit to the person(s) you are negotiating with and of little cost to
 2003, Brad McRae, McRae & Associates, Inc.
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you, or a trade off/concession that the other party(s) could make that would be of great
benefit to you at little cost to your negotiation partner(s).
What Type of Relationship would I like to have with my Partner during the
Negotiation and long-term?
The answer to this question will help us look at the negotiating process more
proactively. And in fact, the more I study the negotiation process and Master
Negotiators, the more long-term my outlook has become. In fact, one of the things that
the Master Negotiators I interviewed said again and again, was to be very careful about
burning our bridges because we never know when we will need to drive over that bridge
again. One other expression that is relevant here is that, “We can all learn to disagree
without being disagreeable.”
We can enhance our relationship with our negotiating partner(s) by being
courteous, respectful, listening attentively, and being open to persuasion. In fact one of
the best ways to get the other party to be open is to be open to persuasion ourselves.
What is My Partner’s Negotiation Style in This Particular Negotiation?
Master Negotiators assess their partner’s negotiation style as early as possible in
the negotiation. Diagnosing your partner’s negotiating style is critically important
because you will then be able to chose your style, and the elements therein, in a more
strategic and proactive manner than in a reactive manner.
Muscle Level
Muscle Level is how much power or force you need to bring to the negotiating
table. There are two mistakes with muscle level: too much too soon and too little too
late. Therefore one of the best things you can do is write down how much force or power
you are going to use and the order in which you are going to use it. This is especially
true if you find that you are getting angry.
An example of writing down what you would do at each Muscle Level is:
1. Muscle Level I is a polite request: “I’d like you to let us know when you can’t
come to a steering committee meeting.”
2. Muscle Level II is a request that is stronger in word choice, voice
characteristics and body language: “When you don’t let us know that you’re going
to miss a meeting, we sometimes end up meeting without a quorum, which is
useless. I need to know when you can’t make a meeting.”
3. Muscle Level III is a statement of consequences if the behaviour doesn’t
change: “If you can’t let us know when you’ll miss a meeting, we will have to ask
you to resign from the committee.”
 2003, Brad McRae, McRae & Associates, Inc.
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4. Muscle Level IV is the application of the consequences stated in Level III:
“Since you have not been keeping us informed about your attendance, I will have
to ask you to leave the committee.” (Negotiating and Influencing Skills: The Art
of Creating and Claiming Value, 1998, pp 58-59)
Note that by writing down what you will do at each Muscle Level, you are more
likely to escalate consciously and pro-actively rather than unconsciously and reactively.
One sign that you should call a time out in the negotiation is if you find that you are
becoming overly angry. During the time out, you can write down what you would do at
Muscle Level I, II, III, IV, etc. on the MNPF or on a separate piece of scrap paper.
My Opening Statement
Your opening statement is critical to the success of your negotiation for two
reasons. First, your opening statement sets the tone and tenor for the entire negotiation.
Secondly, 90% of the way a negotiation turns out depends on how it begins. It is for
these reasons that both parties should prepare a good opening statement.
For example, imagine that a private practitioner in staff training and development
experienced a dispute with their client regarding the late cancellation of a course. He
hopes to negotiate a settlement with the Director of Training as compensation for lost
revenues/opportunities. Imagine now that you are that Director of Training. How would
you respond to the following opening statements made by the trainer?
Trainer: “I have a problem with the late cancellation of the course, but enjoy
teaching for your organization. I’d like to talk about getting this problem resolved.”
Chances are you wouldn’t respond very well to this negative approach. That’s
because the dispute is framed as the foreground and the fact that you like teaching for the
“X” corporation is in the background.
Now what would your response be to this opening statement?
Trainer: “Thanks for making the time to see me today. I enjoy working for the
“X” corporation because you are well organized, treat both myself and the participants
with respect and as a result, I am free to concentrate on getting to know the participants
and would like to discuss the late cancellation of the most recent course.”
This opening statement puts the working relationship with the “X” corporation in
the foreground and the late cancellation in the background.
In sum, what you chose to put in the foreground and the background and the
specific and precise language that you use will go a long way in setting the tone and tenor
of that negotiation. The reason that both parties want to carefully prepare their opening
statements is that if the other party opens with an opening statement that sets a poor tone,
you can then use your opening statement to set a better tone.
 2003, Brad McRae, McRae & Associates, Inc.
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The Master Negotiator’s Preparation Form™
™
Interests
Our Interests
Their Interests
1.
1.
2.
2.
3.
3.
4.
4.
The Prize: The Ultimate Outcome from the Negotiation
Our Prize
Their Prize
Options at the Table
Our Options
Their Options
1.
1.
2.
2.
3.
3.
4.
4.
 2003, Brad McRae, McRae & Associates, Inc.
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Standards/Objective Criteria
(Objective standards or objective criteria help the parties look at
the negotiation much more objectively and make it easier to reach an agreement)
1.
2.
3.
4.
Offers
•
Aspire to?
(The best arrangement you could get)
•
Content with?
(Satisfactory)
•
Live with?
(Acceptable minimal settlement)
BATNA (Best Alternative To a Negotiated Agreement)
Our BATNA
Their BATNA
 2003, Brad McRae, McRae & Associates, Inc.
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Leverage
Our Leverage
Their Leverage
Possible Trade Offs/Concessions
Our Trade Offs/Concessions
Their Trade Offs/Concessions
Type of relationship I would like to have during and after the negotiation
 2003, Brad McRae, McRae & Associates, Inc.
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My Partner’s Negotiation Style is?
The style I will use in this negotiation is?
Muscle Level: The amount of Power or Force I will bring to the table
1.
2.
3.
4.
Our Opening Statement
Dr. Brad McRae, President, McRae & Associates, Inc.
5880 Spring Garden Road, Suite 400, Halifax, NS, B3H 1Y1
Telephone: (902) 423-4680 Fax: (902) 484-7915
E-mail: brad@bradmcrae.com Website: www.bradmcrae.com
 2003, Brad McRae, McRae & Associates, Inc.
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