Negotiation Bootcamp

Will Latham, principal of Latham Consulting Group (Charlotte, NC), is in the business of helping medical groups make decisions and resolve conflicts—which means teaching the art of negotiation. Latham suggests that preparation and organization are more important than the use of specific negotiating tactics. Negotiators, however, must recognize tactics when others use them to counter them. The most important part of the negotiation process, he says, comes before you sit down at the table.

“Preparation is about collecting information,” Latham says. “Who are the key people involved in the negotiation process? Find out who they are, their background; consider your impressions of them if you’ve met them before.

“Think about the strengths and weaknesses of your own team. What is their history with this other party? What has been negotiated before? What are the conditions and dollar amounts that will be discussed? Many people don’t know what they’re trying to accomplish, aside from the big picture.”

Latham, who shared his expertise at a meeting of the American Association of Orthopedic Executives several years ago in San Diego, explains that 99% of his clients are physician groups. He warns his clients that payors believe they can manipulate physician groups because they’re disorganized. Preparation, organization, and planning therefore are indispensible. Most important is to go into the negotiation with a best alternative to negotiated agreement (BATNA) in mind. Your BATNA is what you’ll do if you and the other party can’t make a deal.

“Your BATNA is sometimes so bad that you’ll need to rethink your position,” he warns. “Or, sometimes, your BATNA is so good that you’re at an advantage.”

Latham advises making a list, prior to the meeting, of issues that might come up, and ranking them according to importance. Then, consider the situation from the other side’s perspective, and try to determine which issues will be most and least important to them. If your top issue is also their top issue, the situation could get contentious. But if your top issue is well down on their list, perhaps they’ll concede it in exchange for a top issue of theirs that’s less important to you.

A common mistake, says Latham, is to negotiate point by point: for example, determining a rate of payment, then the length of the contract, then some other issue. Creative and successful negotiators “bundle,” negotiating several points as a package. He advises clients to determine their best, most reasonable bundle, and be prepared to explain to the other side, “Here’s why it’s good for you to accept this bundle.”

“You always want to go back to ‘and this is why it’s a good deal for you,’” he says. “If you bundle, you’ll come up with a result much closer to what you want.”

Style and approach

It’s also important to know the other party’s negotiating style, and compare it with your side’s style. In general, negotiators can be divided into those who are seriously invested in the outcome of the negotiation, and those who aren’t—and those who are seriously invested in the relationship with the other side, and those who aren’t. On top of that, five basic styles of negotiation can be identified: the competitor, the accommodator, the avoider, the collaborator, and the compromiser.

The competitor takes an I-win, you-lose attitude; the accommodator assumes a for-your-sake, I’m-willing-to-lose attitude; the avoider assumes a why-bother attitude; the collaborator tries to achieve maximum happiness for both sides; and the compromiser wants to ensure that both sides are equally inconvenienced.

“If I’m working with a competitor,” Latham says, “I will hoot, howl, and complain as much as I can. Any time you have to concede something, let them see you bleed.

“Accommodators want to hear you talk about the relationship. Avoiders like to be asked about their feelings. Don’t ask them directly, ‘Will you do this or that?’”

With a compromiser, Latham explains, it’s important to appear unhappy about what’s going on, because he’s working toward the least unhappiness for both sides. Collaborators, on the other hand, thrive on creative ideas and solutions.

“Your default is to assume the other party is a competitor, who will try to eat you alive in the process,” says Latham. “Know your style, too, to see how you match up.”

Latham recommends opening negotiations by asking for the other side’s agenda, their wish list. It’s usually to your advantage to let the other side put their cards on the table first—but often they’ll refuse to do this, on the grounds that, “This is about what you want/need.” If you have to show your cards first, Latham advises saying, “Here’s what we want, and here’s how it’ll be good for you.”

Beware tactics

“Another way to start is to seek common ground and stress that you’re just negotiating the small stuff,” he says. “Also, be aware of tactics. They can be subtle and hard to identify. But the other side will use them to throw you off.”

Common tactics include the bluff, in that someone asserts something that is not true, such as, “We have another offer we might take.” “Final offer, take it or leave it,” is another commonly used tactic. Other tactics include:

• Drama—reacting oddly or loudly
• Nibbling—continually picking away at what you’re asking for
• Bondage—“My hands are tied.”
• Pleading no authority—“I need to talk with my manager.”
• Deadlines—real or contrived—set up to force your hand

“Every negotiator has to deal with tactics,” Latham says. “Just relax and recognize that it’s a tactic. Don’t get fooled into thinking it’s real. The second step is to acknowledge: ‘I know how you feel. I understand.’ Third, repeat your original offer, stressing the best advantages: ‘We want ABC, which will allow you to do XYZ.’”

 “If you make a concession, they’ll keep using that tactic again and again,” Latham warns. “You might make concessions later, but at the time the tactic is being used, don’t. Repeat the original offer and point out what in it is best for them. Think about the other side’s interest, rather than their position. Then you can develop creative solutions. For example, someone might say, ‘I don’t want to work on Saturday,’ but his interest might be his desire to spend more time with his family. So, find ways to let them do that, while getting them to work on Saturday.”

In general, there are several basic ground rules to keep in mind. “Ask for more information than you give,” Latham continues. “Concede slowly, complain loudly—especially if you’re dealing with a competitor. Sometimes you’ll reach a deadlock; that’s when it’s important to know your BATNA. If you don’t know your BATNA—especially if you’re negotiating as a team—you won’t know when to walk away.”