Negotiating Tournament Deals: The Three-Phase Model

Most players’ conception of negotiations is much too narrow. They focus almost entirely on the discussions, but expert negotiators work on three distinct phases:

1. Preparing
2. Negotiating
3. Reviewing

The Model

Let’s look at the entire model before discussing each phase.

Preparing

Since an earlier column discussed preparation, I’ll just summarize the four major preparation steps:

1. Define the issues.
2. Set your objectives.
3. Analyze the situation from their perspective.
4. Plan your strategy.

Define the Issues: Usually, this step is unnecessary because the only issue is money. Occasionally, someone wants glory (or something else) more than money. Look for these motives. They let you trade a ring, trophy, bracelet, or something else for more money.

Set Your Objectives: Carefully set your Walk Away Point (WAP), the worst deal you’ll accept. Try for more, but don’t take less.

Analyze The Situation From Their Perspective: How do they see the situation? You’ll probably revise your answers as you get more information.

First, estimate their WAP. It’s the most important information.

Second, how much do they want a deal? Consider their stack size, skill, playing style, and self-confidence. The more they want a deal, the tougher you should negotiate.

Third, analyze their personalities and probable strategy. What kind of players are they? How will they probably negotiate? Most people negotiate the same way they play (such as aggressively, passively, or formulaically).

Plan Your Strategy: Determine which atmosphere is best and how you’ll create it. Ask yourself, “What information do I need? How will I get it? Then decide whether you’ll make the first offer and how much it will be. Carefully plan when and how you’ll make concessions.

Negotiating

This phase contains three major steps:

1. Implement your original strategy.
2. Use the Feedback Loop.
3. Conclude the negotiations.

Implement Your Original Strategy: Many players don’t implement their plans well. For example, they plan to appear indifferent, but sell hard. Or they plan to be friendly, but act aggressively.

Make sure that everything fits your plans, and remember that players often become skeptical during negotiations. You may believe you’re being reasonable and flexible, while they feel you’re aggressive, rigid, or even hostile.

Use the Feedback Loop: The model contains a line from “Continue Analysis” to “Analyze Situation.” That line plus the ones to “Plan Strategy” and “Implement Strategy” is called a Feedback Loop. Use it to revise your strategy.

The Feedback Loop is often neglected. Many players continue ineffective strategies because they don’t ask enough questions, misinterpret the answers, ignore the new information’s implications, don’t adjust their strategy, or don’t implement the revised strategy well.

A major difference between weak and strong negotiators is their ability to use the Feedback Loop. Strong negotiators adjust their strategy to fit the situation; weak ones continue ineffective strategies.

Conclude the Negotiations: Sooner or later, you either make a deal or decide to keep playing.

If you don’t reach a deal, don’t get nasty. Keep the door open to negotiate other deals or restart this negotiation without making anyone lose face. Saving face has killed countless deals.

The Beginning, Middle, And End Games: The negotiating phase can be divided into three, quite different, games.

The Beginning Game sets the stage. Its three tasks are:

1. Create the right atmosphere.
2. Communicate your position.
3. Learn their position.

The Beginning Game communicates the gap, the distance between your positions. Everyone should know how far apart they are.

During the Middle Game close that gap by:

1. Creating momentum.
2. Maintaining it.
3. Controlling it.

Create momentum by having both sides start moving toward a deal. “Both” is emphasized because too many people either move unilaterally or demand that the others move first. Both extreme are mistakes. Moving unilaterally produces bad deals. Demanding they move first causes deadlocks.

Creating momentum often depends upon how well you performed the Beginning Game’s tasks. If you create the wrong atmosphere, or don’t communicate your position clearly, or don’t understand their position, momentum is unlikely.

After creating momentum, keep it going by avoiding obstacles to momentum such as offending people or not understanding each other’s position or motives.

Control the momentum to move toward the right deal. Any idiot can put together a bad deal, but it takes hard work and discipline to put together the right one.

The End Game is the final, often stressful, period when both sides make the painful concessions that they strenuously resisted earlier. You have three tasks:

1. Test their limits; learn how far they can be pushed.
2. Communicate finality; make them believe you can’t be pushed any further.
3. Let them save face; make them feel good about the deal and the way it was reached.

Because each game makes different demands, modify your approach as the negotiations progress. For example, change the way you communicate your positions.

• In the Beginning Game communicate that you’ll negotiate, but be firm enough that they take your opening position seriously.
• In the Middle Game move in a deliberate, controlled way.
• In the End Game make them believe you’ve run out of bargaining room and can’t go another inch.

The need to change your approach often causes serious psychological and strategic problems. The personal qualities that help you in one game may hurt you in another. Actions that fit the Beginning Game often clash with the End Game’s demands. Expert negotiators understand how the game changes, and they adjust their approaches to fit these changing demands.

Reviewing

Regardless of how a negotiation ends, immediately review it to:

1. Plan adjustments for future negotiations with these opponents.
2. Develop your skills.

Planning adjustment’s importance depends upon whether you’ll negotiate again with them. If so, now is the ideal time to make your general plans. Your memory is fresh; you now know more about how to negotiate with them than you’ll remember if you wait until your next negotiation.

Carefully write notes about what happened, what it means, and how to adjust in future negotiations. For example, should you be more friendly or aggressive? Which computer formula should you use? Should your first offer be more or less reasonable? What tells are most revealing? A few minutes spent reviewing can greatly improve your next negotiation’s results.

Develop Your Skills: Critically review your performance. What did you do well? What mistakes did you make? How can you become a better negotiator? This review will help you to build on your strengths, reduce your weaknesses, and become a much better negotiator.

Summary

Your negotiations should be clearly structured, and they should include much more than the wheeling and dealing that people generally regard as the essence of negotiations. Take steps in three phases: Preparing, Negotiating, and Reviewing.

Use the Feedback Loop. Acquire, interpret, and use information to revise your strategy. Then correctly implement that revised strategy.

During every step try to understand the other players and adjust your strategy. If you correctly take all these steps, you’ll get deals that satisfy everyone, while giving you most of the money (and other things) on the table. ♠

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