ARTICLE REVIEW : SIX HABITS OF MERELY EFFECTIVE NEGOTIATOR

Author: James K. Sebenius

Negotiation plays an important role in business, from resolving disputes with stakeholders to
managing a merger and acquisitions. The article “Six Habits of Merely Effective Negotiators” by
James K. Sebenius explores the art of negotiation and identifies key mistakes that even experienced
negotiators commit thus rendering the negotiation ineffective. The key to addressing these
mistakes is to identify the right negotiation problem(s) that distract the negotiators and result in
damaged relationships that could have prevented through foresight.

The author identifies the problems as:

❏ Neglecting the other side’s problem
❏ Letting price bulldoze other interests
❏ Letting position drive out interests
❏ Searching too hard for common ground
❏ Neglecting BATNA
❏ Failing to correct for skewed vision

Addressing these problems is not going to be simple. Managers know the basics of negotiation- to
persuade the other party to agree to the full set of one's interests, but bad habits creep and
experience can further ingrain those habits. During any negotiation, each party has two options:
either to accept a deal or take its best no-deal option. And as a negotiator, it is in our interest to
persuade the other party to agree to our proposal.

The article goes on to explain that we need to spend time trying to understand the goal of the other
side to model an approach of "golden bridge" to reduce the gap between where our counterpart is
and our desired endpoint. It is necessary to avoid too much focus on our own problem but instead
focus on solving the other side’s problem as the means of solving our own. Less experienced
negotiators often undervalue the need for developing working relationships and put relationships
at risk by aggressive tactics. A successful negotiation process is a result of the quality of the
relation, the ability to resolve conflicting issues, and attitudes. One of the common attitudes of
tough negotiators is to dismiss the other side's problem, which undercuts their ability to profitably
influence how the other side approaches the negotiation.

It is also equally important to avoid treating negotiations only in pure price terms. Negotiators
shouldn't restrict their view to just the price perspective but also weigh-in the important interests
at stake, work with subjective views with the process as well as the relationship and the "social
contract". The solution to prevent such negotiations is to bring multiple issues into the deal. The
move to negotiate multiple issues allows both parties to increase the benefits to both parties
through the mutual agreement as well as getting the best deal for your side. The focus should be

Group number - 5
Roll no. - 2018PGP034, 2018PGP137, 2018PGP216, 2015IPM091, 2015IPM106
 ARTICLE REVIEW : SIX HABITS OF MERELY EFFECTIVE NEGOTIATOR
Author: James K. Sebenius

on four important non-price factors i.e. The Relationship, The Social Contract, The Process and
The Interest of the full set of Players. A good negotiator can often influence whether price will
dominate or be a component of a larger, long term perspective.

As from the 3rd mistake of letting position drive out interest, the author highlights three key
elements that drive a negotiation - Issues, Positions and Interest. Positions on issues reflects the
interest of the underlying issue but they might not be the same. Through a negotiation parties can
bargain over the underlying issue but they have a bias of placing their own positions first where
either of the party gains or losses. They fail to realise the compatibility issues and both parties
walk away from the deal. Therefore to reconcile the interest to create value we must research about
the other side and have patience for the same

Mistake 4 elaborates on how hard we try to search for a common ground during a negotiation.
Though a common ground necessary but we must also draw values from the differences between
the two parties. Finding out joint gains can break the ice when the deal is purely economic.
Sometimes the two parties may have differences in projecting the future health of a company
during a merger where the party who is a potential buyer may be pessimistic view about the future
in contrast to the party that is being bought. The less risk averse party in the deal should ensure the
more risk averse, which can be done driving the less impatient party to gain profit in the shorter
period with the counterpart to gain over a longer term. Therefore according to the author, in
addition to finding a common ground we must also emphasize over “differences inventory” to
drive the deal.

Mistake 5 makes us aware that a party should consider their BATNA (best alternative to a
negotiated argument) while driving a deal. BATNA gives us several possible alternatives in a deal
including that of going away from the deal or approaching another potential parties. It generally
sets the minimum threshold level where we can agree upon the deal terms, which therefore
provides us the zone of possible argument. A strong BATNA makes our interest more credible to
the other party which can again be leveraged by us. We should also assess the other parties BATNA
to point out different possibilities of why the other party can move out of the agreement. A real
negotiation comprises of “Deal vs BATNA” and not either of the two sides, because we spend
fairly a considerable amount of time in improving the deal terms rather than assessing our and that
of other party’s BATNA.

Failing to correct for skewed vision which is regarded as the 6th mistake highlights about the
inability to understand the other party’s BATNA, valuations and likely action and the author has
pointed out two prophecies which can lead to the above mentioned situation.

Group number - 5
Roll no. - 2018PGP034, 2018PGP137, 2018PGP216, 2015IPM091, 2015IPM106
 ARTICLE REVIEW : SIX HABITS OF MERELY EFFECTIVE NEGOTIATOR
Author: James K. Sebenius

1. Self serving bias : People tend to consider the information on their side in a strong way
neglecting other party’s interest. The traits which can lead to self serving bias is
overconfidence on the deal terms or becoming overcommitted to our own point of view.
2. Partisan Perception : It can lead to self-fulfilling bias because we can make mistakes in
understanding our interest but we are even worse in understanding the interest of opposite
party. Unconsciously we tend to treat our own side and biases as superior and neglect the
viewpoint of the opposite party
A stubborn opposition party with a biased viewpoint on both sides can lead to disagreement and
conflict which can hopefully be removed by taking views from an outsider party who is uninvolved
in the deal.

Critical Review:

Negotiating is a part of everyday life, but in business it's absolutely critical to one’s success.
Poor negotiation can cripple a company just as quickly as losing key customers. The article “Six
Habits of Merely Effective Negotiators” by James K. Sebenius addresses key mistakes that act as
a hindrance to an effective and efficient negotiation. The article quotes the Italian diplomat,
Daniele Vare, that negotiation is “the art of letting them have your way”. Throughout the article,
the author has quoted previous literary works in the field of negotiation and cited real life
business use cases. This leads to better understanding of the reader on the six mistakes made by
negotiators and also delivers some level of credibility to the issues stated in the article. Even
though the article piques the interest of readers by asking the basic question of “How to sharpen
your deal-making skills”, it fails to deliver an answer for the same. The six mistakes often
committed by the negotiators as mentioned in the article are insightful but it lacks the common
mistakes that people make in everyday negotiations. The article fails to discuss the emotional
aspect of the negotiation process like impulsive display of emotions like anger by the people
involved or the winner’s curse or even the irrational escalation of commitment by negotiators.
The article’s last section, “From Merely Effective to Superior Negotiation”, also fails to provide
any tool or framework that can help resolve or curb the mentioned mistakes. In conclusion,
though the article highlights the pitfalls of negotiators through examples and recommends
theoretical solutions, it lacks the tools for practical application of the same.

*****

Group number - 5
Roll no. - 2018PGP034, 2018PGP137, 2018PGP216, 2015IPM091, 2015IPM106