Editor’s Note: Sam Bayer is the founder and recently retired CEO of Corevist, a Durham-based bootstrapped software company launched in 2008. Bayer launched his career in 1980 working for IBM, which he left when he founded his first entrepreneurial endeavor Axiom Systems in 1987. Axiom would eventually be taken public through an initial public offering. Bayer notes that his entire 42-year professional career was guided by his determination to negotiate win-win value with his customers and fueled by his thirst for knowledge and scientific approach to problem solving. Now, he will be recounting his entrepreneurial leadership experiences in his “Stories at Work” series for WRAL TechWire. You can also follow Bayer on instagram @sam.bayer and at firstname.lastname@example.org any feedback about this series.
DURHAM – A child gets dessert if she eats all her vegetables. A client earns a discount if they sign a multi-year contract. An employee receives a bonus if they meet their objectives. A municipality gets a new school if citizens vote for a bond referendum.
These are all negotiated agreements. A process by which two or more parties have discussions leading to an agreement that satisfies everyone’s interests.
Negotiations are all around us and we’re engaged in them more often than we realize… or care to admit. Until, that is, the day you’re made aware of them. Then you see them everywhere.
My awakening came in the late 1980’s when I came across Roger Fisher and William Ury’s “Getting to Yes. Negotiating Agreement Without Giving In.”
My negotiation mindset was cemented a few years later when I attended an in-person workshop, Harvard Law School’s “Program on Negotiation”, based on the concepts of the book.
To say the workshop changed my life is an understatement.
The goal and the anti-goal
I learned I didn’t need to be louder, faster, stronger, smarter, richer, braver or a boss to win a negotiation. In fact, arm wrestling an opponent into a win-lose submission is not the goal, it is the anti-goal. The goal is to strive for a win-win agreement where all parties have their respective interests addressed and satisfied.
From that day forward I’ve been negotiating by:
- Defining and working towards a common goal
- Empathizing with my negotiating partner(s) and uncovering and embracing their interests as if they were mine.
- Starting every negotiation with a well-defined “best alternative to a negotiated agreement” (BATNA) in place.
BATNAs are the worst case outcomes of a negotiation that you’re happy to live with if you have to walk away from the negotiation table.
Kenny Rogers established the BATNA anthem with these toe tapping lyrics from the Gambler (bet you can’t read them without singing them):
“You gotta know when to hold ’em,
Know when to fold ’em,
Know when to walk away,
And know when to run.”
Best alternative to a negotiated agreement
But how do you know? How do you really know when it’s time to hold ‘em, fold ‘em, walk away or run?
Let your BATNA be your guide.
If you can see your way to an agreement that leaves you in a better position than your BATNA, by all means stay in the negotiation and keep working towards a win-win solution.
However, if negotiations are proving fruitless, your BATNA is your saving grace. Execute your BATNA. You get to decide if you walk away or run.
What is the BATNA for the dessert craving child? In the worst case, her BATNA is she leaves the table without eating her vegetables and gets no dessert. But she knows her parents won’t let her starve and will probably renegotiate the deal. Besides, she probably has some leftover Halloween candy stashed away in her room somewhere.
What’s the BATNA for the vendor negotiating a discount for a multi-year contract? Enhanced cash flow that a multi-year contract affords may be preferred, but a one year renewable contract at a higher price and greater margin is certainly acceptable.
What is the BATNA of the bonus seeking employee? If the employee manages their personal finances so they don’t need the bonus to accommodate their standard of living, living on their base salary is their BATNA. If they earn their bonus, well… that will be a bonus! If they don’t, there are probably bigger things to worry about in the organization.
What is the BATNA of the municipality vying for a new school via a bond referendum? Another year of overcrowded classrooms? Defection of students to private schools? Teachers leaving the profession? Sometimes your BATNA isn’t great, but it shouldn’t kill you.
If you’re going to play…
As the Gambler would advocate:
“…If you’re gonna play the game, boy
You gotta learn to play it right”
“Every gambler knows that the secret to survivin’
Is knowin’ what to throw away and knowing what to keep
‘Cause every hand’s a winner and every hand’s a loser
And the best that you can hope for is to die in your sleep”