Negotiation

In an attempt to expand my toolbox, I decided to take part in my college’s negotiation workshop. It was 3-day long and really intense. Nonetheless it was an experience worth having.

It is not possible to summarise everything that I’ve learnt in the past three days, but here are the main takeaways.

Claiming & Creating Value

How hungry are we for value? Once that is established, we can then provide reasons and justifications for that. We will then claim as much value as possible. The likely end result will be a win-lose situation.

Whereas by creating value, we expand the pie. By increasing the amount of beneficiary goods, we can come to a win-win situation instead. This is usually achieved by making the ZOPA smaller, which is explained below.

BATNA and ZOPA

The two terms stand for Best Alternative To Negotiated Agreement and Zone of Possible Agreement.

BATNA is kind of like Big-O, your worst case scenario. What will happen in the worst case that no agreement comes out from the negotiation? Knowing my own BATNA gives me the power to assess the strength of my position. If my BATNA is really bad, means in the case that the negotiation fails, I’m pretty much screwed. In other words, having a good BATNA gives you power in a negotiation.

On the other hand, knowing the opponent’s BATNA allows me to assess how desperate he/she is in this negotiation. Understanding the difference gives me much more power than a good BATNA on its own. This is something I should have applied more in the simulation cases.

Before understanding ZOPA, we have to understand the concept of Reservation Point. It is the minimum value to “sell”. In a more general term, it is the limit. Cross this limit and there will not be a deal. In the case of a buyer/seller negotiation, there will be a zone where the reservation points of both buyer and seller overlaps. This zone is called the Zone of Possible Agreement.

In most negotiations, knowing where this zone lies is important. Once the ZOPA is clear, the negotiation can come to a conclusion at a faster rate. But to determine the ZOPA is where the difficulty comes. How much should we trust each other, and what if one party is giving a ridiculous offer?

The skills in determining ZOPA comes with experience and practice, however to keep to the reservation point requires discipline. Knowing one’s own limits is fundamental in negotiations.

Most importantly, when the ZOPA cannot be reached, it is always okay to impasse. Having no deal is a good deal sometimes.

Awareness of Situation (AoS)

This was brought up by one of the facilitators. I cannot remember if it was awareness/assessment, but in my very (very shallow) opinion, this is one of the really important part of negotiation.

Negotiation is not an algorithmic process. My brain is wired to think that all problems can be solved with algorithms, but in negotiation, it is more of thinking on the spot, adapting to the dynamic nature of the conversations. Being aware of the situation allows me to react appropriately to what others say or request.

There are many negotiation tricks out there to be applied in different scenarios. It is crucial to understand which strategy suits which scenario, and apply accordingly.

Position (the What) vs Interest (the Why)

This was brought out once more by another facilitator. During negotiation, it is important to find out both parties’ position, and the reason behind why they want it. This affects the style of negotiation and outcome. By differentiating between the two, it is possible to expose the real goals and find the best possible solution.

Negotiation is 90% preparation

The workshop demanded us to complete insanely long readings within one night. The first was 50 pages long, while the next was 20 pages.

Information is power. Knowledge is power. 

Understanding the case and situation aids me in finding out more about the opposing party’s interest and positions, BATNAs and power. These will not be possible if I were to enter a negotiation without first understanding my opponents. All of the techniques mentioned above cannot be applied if I don’t have the knowledge.

If there is something I would want to improve on, it would be my ability to consume large amount of content in a short period of time. Even after two semesters of doing long readings, I have not developed the ability to read fast and critically.


Another key takeaway from the workshop is self-discovery. I found out a bit more about myself and my style, my weaknesses and strengths. Being a person who gives in to others most of the time, I should find ways to exploit my personality. Being more vocal is also something to work on. Once again, it takes time and experience to build these skills, but this workshop gave me a good start.

Overall, this workshop should not be the end of the journey, but the start. Negotiation is an addition to my toolbox, and to master this tool takes time and effort.

To end off this summary of what I’ve learnt, a quote from John F Kennedy:

Let us never negotiate out of fear. But let us never fear to negotiate.

On the side note, I’ve just moved back home from Tembusu. Summer begins. 🙂

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