People & Skills
Negotiation for the Public Sector: Positions, Interests and Developing Options

We started this series recently when we commented on the need for negotiation skills amongst many people and areas in public sector organisations. “Getting to Yes”, the book from Fisher and Ury of the Harvard Negotiation Project, is still the best introductory book on negotiation that we know, and we are now into an analysis of the basic principles they describe in their work, to see how they apply to typical public sector situations. The five are:

– Separate the people from the problem (see our previous post here).

– Focus on interests, not positions.

– Invent options for mutual gain.

– Insist on using objective criteria.

– Know your BATNA (Best Alternative To Negotiated Agreement)”

So today, let’s look at the next two principles.

Focus on interests, not positions – a position is “I must have a 5% saving”. An interest is “we need to achieve more outcomes for the money available – that would help this important public policy to succeed”.

Starting with a position tends to make the other party in the negotiation take their own position, which is likely to be quite different to our own. That then encourages “positional bargaining”, where the parties look at how to split the proverbial cake, and can lead to negotiation that is very power-based and aggressive. Looking at interests, on the other hand, allows the negotiation to explore options that might lead to a solution that satisfies both parties.

For example, imagine an IT services contract with a government provider (the contracting authority). Because of a lack of available funding, the public body wants to reduce costs, but the contract has a minimum volume or spend level which the buyer might not hit under the new plans. A “position” might be “we want to cut volume by 10% but have the same pricing”. That leads straight in to the supplier refusing and saying “the contract is clear – you must spend at least 2 million to get that pricing”.

A discussion of “interests” might be quite different. If the authority explains its position, the supplier might explain that of course, they have a profit expectation from the contract and that was how they determined their own bid initially. So perhaps there are ways of satisfying both. Perhaps the specifications and the way some services are delivered could be changed to reduce costs for both parties. Or could the contract be extended (obviously that depends on the original terms), which benefits the provider – and in return some price reductions might be offered?

They are just examples of course, but illustrate the idea that a discussion of interests is likely to open up the negotiation much more than taking positions.

Invent options for mutual gain – that last example takes us nicely into this principle. The most successful negotiations occur where the discussion about interests leads on to a creative process which develops as wide a range of actions and options as possible. The more options that can be created, the more likely it is that some will provide the mutual gain we are seeking.

Often this part of the process looks at finding negotiation points that have more value for one party than the other. For instance, suppliers often value highly a good reference or testimonial from an existing customer. A contracting authority that is prepared to provide such a reference (which costs nothing at all in monetary terms) has a negotiating “chip” that is of value. So a discussion around “if you can just help us with that issue, we would be happy to provide a reference for that large bid you are undertaking”.

Or going back to our example of a contracting authority looking to reduce costs, maybe there are elements of the contract that are expensive for the suppler to provide? If some of those could be reduced, the supplier might even benefit and the buyer reduce spend. An open discussion to seek and develop options around re-shaping the package of services provided (without moving too far out of the originally contracted scope of course) might well arrive at that “mutual gain” we are seeking.

In the next part of our series, we will look at the BATNA – perhaps the single most important “secret” of good negotiation, in public or private sector.