The Personal MBA

Master the Art of Business

A world-class business education in a single volume. Learn the universal principles behind every successful business, then use these ideas to make more money, get more done, and have more fun in your life and work.

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What Are The '3 Dimensions of Negotiation'?

The 3 Dimensions of Negotiation are setup, structure, and discussion.

Setup involves setting a stage for a positive outcome of the negotiation. The environmental factors play a huge role in the negotiation, so it pays to do appropriate research to gain as much knowledge as possible about your negotiating partner.

Structure is the terms of the proposal. By thinking on the Structure of your proposal in advance, you can have valuable options for your partner to consider, and eventually reach Common Ground.

Discussion is actually presenting the offer to the other party. This is where you work on the details, remove Barriers to Purchase, and more. Discussion continues until the parties reach an agreement or quit negotiating.

Prepare the Three Dimensions of Negotiation to increase greatly the chances of reaching an agreement that benefits both parties.

Josh Kaufman Explains The '3 Dimensions of Negotiation'

Most people think of negotiation as sitting down across from the other party and presenting offers and counteroffers. But that’s the last phase of the process; the other two happen well before you ever sit down at the negotiating table.

The Three Dimensions of Negotiation are setup, structure, and discussion. As David Lax and James Sebenius discuss in 3-D Negotiation, each of these phases is critically important: by creating an Environment that’s conducive to a deal and preparing your strategy in advance, you can dramatically increase the probability of finding a mutually acceptable solution.

The first phase of every negotiation is the Setup: setting the stage for a satisfying outcome to the negotiation. The more you can stack the odds in your favor before you start negotiating, the better the deal you’ll be able to strike:

Setup is the negotiation equivalent of Guiding Structure—the environment surrounding the deal plays a huge role in the eventual outcome, so it pays to ensure that the environment is conducive to getting a good deal before you ever reach the table.

By thinking about the setup, you can make sure you’re negotiating with the right person—the person who has the Power to give you what you want. Research is what gives this dimension of negotiation its power—the more knowledge you gain about your negotiating partner during this phase, the more power you have in the entire negotiation, so do your homework before presenting an offer.

The second dimension of negotiation is Structure: the terms of the proposal. In this phase, you put together your draft proposal in a way they’re likely to appreciate and accept:

Remember, your goal in creating the proposal is to find Common Ground: an agreement that both parties will be happy to accept. By thinking through the structure of your proposal in advance, you can prepare a few different options that you believe the other party will want, on terms you’re willing to accept.

If you’re expecting the other party to balk at the price, for instance, you can prepare arguments to overcome the objection, lower-cost options that provide less value, or alternative offers that would better fit their needs. When the time comes for you to discuss the deal with your negotiating partner, you’ll be ready for anything.

The third dimension of negotiation is the Discussion: actually presenting the offer to the other party. The discussion is where you actually talk through your proposal with the other party. Sometimes the discussion happens the way you see it in the movies: in a mahogany-walled boardroom, across the table, toe-to-toe with the CEO. Sometimes, it happens over the phone. Sometimes it happens over e-mail.

Whatever the setting, this is the point where you present your offer, discuss or clarify any issues the other party doesn’t understand, answer objections and remove Barriers to Purchase, and ask for the sale.

Regardless of what happens during the discussion phase, the end result of every round of discussion is either:

  1. “Yes, we have a deal on these terms,”
  2. “We don’t have a deal quite yet—here’s a counteroffer or another option to consider,” or
  3. “No, we don’t have a deal—there’s clearly no Common Ground, so we’ll suspend negotiations and reserve the right to talk to somebody else.”

Discussion continues until a final agreement is reached or the parties decide to quit negotiating, whichever happens first.

If you prepare the Three Dimensions of Negotiation (setup, structure, and discussion) in advance, you’ll be far more likely to settle on terms that benefit both parties.

Questions About The '3 Dimensions of Negotiation'


"The first thing to decide before you walk into any negotiation is what to do if the other fellow says no."

Ernest Bevin, former British secretary of state for foreign affairs


From Chapter 3:

Sales


https://personalmba.com/3-dimensions-of-negotiation/



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The Personal MBA

Master the Art of Business

A world-class business education in a single volume. Learn the universal principles behind every successful business, then use these ideas to make more money, get more done, and have more fun in your life and work.

Buy the book:


About Josh Kaufman

Josh Kaufman is an acclaimed business, learning, and skill acquisition expert. He is the author of two international bestsellers: The Personal MBA and The First 20 Hours. Josh's research and writing have helped millions of people worldwide learn the fundamentals of modern business.

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