Negotiations Training

The Negotiation Process:
Five Phases of a Negotiation

Every negotiation has five distinct phases. These phases range from those activities that take place before one sets foot at the negotiating table through to those last moments when one determines if a negotiation was a success or a failure. These five phases are as follows:

Phase One: Preparation

Phase Two: Discussion

Phase Three: Proposal

Phase Four: Bargain

Phase Five: Evaluation

Depending on the negotiation that is taking place, each of these five phases may be more or less distinct than others. In complex business negotiations, one is more likely to spend a great deal of time on each phase. In less complex negotiations, the distinction between the Proposal and Bargain phases may be somewhat blurred. Either way, novice and seasoned negotiators should understand each phase.

Phase One: Preparation - We have already talked about items such as your Wish, Aspiration and Bottom line and the BATNA and WATNA. This is the phase when that information is formulated. There are countless questions you need to ask yourself when preparing for a negotiation. A few examples include:

* What are my objectives?
* What do I define as agreement?
* Are there any conflicts or issues among my team that need to be ironed out before negotiating?
* What are my strengths and weaknesses? What are the other party's strengths and weaknesses?
* Do we have any mutual areas of interest?
* What can I concede? What items are non-negotiable? What can the other party concede?
* Which concessions can I make first?

Phase Two: Discussion - During this phase, you lay the groundwork for your discussions and how your meetings will flow. Besides, making an opening statement, it is at this point where you should confirm the reasons for your meeting, identify common problems and issues, establish ground rules and accepted procedures and verify areas to be negotiated. At this point, your just getting warmed up and making sure that each party is essentially on the same page.

Phase Three: Proposal - During the proposal stage, each side is starting to lay out their possible positions. Often, "trial balloons" are used to feel out the other party's willingness to negotiate particular areas or items. Options are just starting to be thrown out and considered.

Phase Four: Bargain - One could consider this the "meat" of the negotiation. It is the phase when the true negotiating takes place and various options are discussed, negotiated and worked out. Concessions are made and the parties work together to come up with a negotiated agreement. This, along with the preparation phase, is often the most protracted phase in a negotiation. Specific areas to watch for during the Bargain phase include:

* Focus on a mutual agreement that creates a true win-win for both sides. Flexibility and willingness to consider all options is key
* Watch for dishonest tactics and techniques designed to give the other party an unfair advantage
* Don't be afraid to ask for a time out when necessary. At times, either party may want to regroup, consider a proposal or step away  from conflict or pressure.
* Look for ways to provide items of high value to the other party that are "inexpensive" for your team
* Ensure that all agreements are formalized on paper. Contracts, statements of work or letters of intent are preferred.

Phase Five: Evaluate - The ink is barely dry on the contract but the negotiation is essentially over. How did your side do? Did you achieve your goals? What did you learn from your negotiation? What can you use in future negotiations with this party or other parties? A bit of introspection can lead to a great deal of valuable lessons.