Negotiation really comes full circle.  Modern day hostage negotiation came into being after what we know as business negotiation and many of the models we apply came from the business world, including the basic bargaining model.

Now, before we get into it, please remember that bargaining is only a subset of negotiation, maybe 1/3 of the process at most.

The bargaining rules are to make your first offer at 65% of your target price and then calculating 3 raises, each 1/2 the amount of the one prior (20%, 10%, 5%).  These come from the real Godfather of international kidnapping negotiation, Mike Ackerman.  Mike shared this with my colleagues in our early days at a conference in Key West.

I recently had the pleasure of discussing this with Mike & he told me that he had shared this idea with Howard Raiffa a number of years back and Howard had concurred.  For those of you who have studied business negotiation extensively you know Howard Raiffa as one of the greatest minds to have ever contributed to the world of negotiation.  He is the author of numerous books (bibles!) including “The Art & Science of Negotiation”.  In the past some of the things he did included offerring to simply make deals better.  Business clients could bring deals they had consumated to Howard and he would simply make them better.  If he couldn’t improve them for both sides, he got nothing.  If he made them better for both sides, and both sides agreed, he was paid a fee.  He made a very good living doing this.

Anyway, Mike ran his model past Howard, Howard showed Mike a bunch of complicated calculations that Mike said made his eyes glaze over, and Howard decreed that Mike’s model was sound.

Since then, we’ve added some wrinkles and taken it a few steps further, but the basic model works for all types of negotiation across the board.  Almost every negotiation I’ve ever seen has about 3 rounds to it.  The form and time frame of each round varies and it takes good assessment to see where they are.  That’s one of the reasons that the real definition of negotiation is very close to the definition of navigation, because negotiation is moving to a goal and compromise is a poor solution.  You still need to get to the goal.

Regardless of how you get there, you’ve got about 3 rounds to do it.  The other side is very likely to walk away because they’re simply sick of the process if you don’t get it done.

If you get drawn into  bargaining, don’t expect to make big leaps in your postion & not make the other side think that there is more room to give ground.  Big jumps only make the other side hungry.  It’s only human nature and you ignore human nature at your peril. When you give up a lot, the other side want more.

And when they get to a goal to easily, they feel cheated and will have buyers remorse, even if they settle.  Leaving them with a bad taste in their mouth only makes them harder to deal with the next time, or worse, there is an inplementation failure in the deal you’ve agreed to.  In kidnapping negotiations, we call that a double dip.  You can’t sue a kidnapper so in that world we have to start over.  Now we have an opponent that is as hungry as a drug addict.

In any world, implementation failure is not someplace you want to be.  It takes less time to do something right then it does to do it over.  If you want to speed a negotiation up, slow down.