Working backward from the desired outcome (halting sales of infringing products in significant markets), the patent holder realized that although it couldn’t dissuade manufacturers from making unlicensed DVD players, it could persuade large importers and distributors to stop buying and selling those products. And even when the Chinese manufacturers were successfully challenged and subjected to a legal process, they would simply close shop and then reopen under a different name. Initially, it tried to negotiate with those manufacturers, but in most cases it was simply ignored. How can we engage, directly or indirectly, with parties that share some of our interest in achieving those outcomes?Ĭonsider how the holder of key patents necessary to play movies and music on DVDs sought to prevent low-cost manufacturers in China from infringing on its intellectual property (and competing unfairly with its duly licensed partners).Who can do something to bring about those outcomes?.What business outcomes do we seek through this negotiation?.To devise one, negotiators should answer the following questions: We need an approach that encompasses all the parties that can and will help us fulfill our objectives. But we often overlook many others in the ecosystem surrounding the negotiation: our competitors, suppliers, and customers-and their competitors, suppliers, and customers. If we’re sellers, we search for a buyer if we’re borrowers, we search for a lender. People tend to pursue deals with the obvious parties. Here are the key strategic principles negotiators should apply to their next complex deal. They’ll be able to prepare for the worst but not trigger it-and to identify the actions most likely to have a significant impact on deal outcomes. With well-thought-out strategies, negotiators can suppress the urge to react to counterparts or to make preemptive moves that are based on fears about the other side’s intentions. Negotiators should start developing them well before the initiation of talks, but the process is dynamic and iterative and should continue until the final deal is inked-and in some cases beyond. In the 30 years we’ve spent as advisers on hundreds of negotiations, ranging from agreements to resolve armed conflict to multibillion-dollar commercial deals, we have codified what makes negotiation strategies effective. Just like business, political, and military leaders, negotiators need a strategic framework that illuminates the key choices they must make to achieve their ultimate objectives. In those situations they require a much more robust approach. But from time to time dealmakers find themselves in complex negotiations with higher stakes. When the stakes are low, skilled negotiators can pivot with relative ease from one tactic to another as the opposite side makes moves, and often that’s enough to ensure that the final deal fully captures value for them. For most routine negotiations, a reactive approach is sufficient. What we hear most often is “It depends on what the other side does.”įair enough. But beyond that, they feel limited in how well they can prepare. Most reply that they’ll do some planning before engaging with their counterparts-for instance, by identifying each side’s best alternative to a negotiated agreement (BATNA) or by researching the other party’s key interests. When we advise our clients on negotiations, we often ask them how they intend to formulate a negotiation strategy.