Negotiation Matrix

Summary

This lesson introduces Lewicki and Hiam's Negotiation Matrix, a tool designed to help negotiators choose the right strategy for any situation. The matrix is based on two factors: the importance of the outcome and the importance of the relationship. The video explores five negotiation strategies—avoiding, accommodating, competing, collaborating, and compromising—each suited for different priorities. Practical examples show how to apply these strategies in workplace scenarios, such as dealing with suppliers or managing team conflicts. The lesson emphasizes preparation and strategic planning to achieve effective and balanced negotiations.

Takeaways

• 🤝 Negotiation skills are crucial in both big deals and everyday workplace tasks, like managing deadlines, solving team conflicts, and even choosing between pizza or tacos.
• 📈 The Hayam's Negotiation Matrix helps in choosing the best strategy for any negotiation based on two key factors: importance of outcome and importance of the relationship.
• 📝 Preparation is key for successful negotiations. 80% of a negotiator's effort should be spent on preparation, according to Lee Thompson's book *The Mind and Heart of the Negotiator*.
• 🎯 First step in preparation is setting a clear goal, knowing exactly what you want to achieve in the negotiation.
• ⚖️ Concessions: Be prepared to make compromises to achieve your desired outcome.
• 🔄 Look at alternative scenarios, which provide fallback options if the main goal cannot be achieved.
• 💪 Leverage: Understand your power versus your counterpart's power in the negotiation.
• ❌ Avoidance: If neither the outcome nor the relationship is important, it may be best to avoid negotiation altogether.
• 🙋‍♀️ Accommodating: When the relationship is more important than the outcome, it's best to accommodate, prioritizing the relationship over the result.
• 🤜🤛 Collaborating: If both the outcome and the relationship are important, a collaborative approach should be adopted to achieve a win-win solution.

Q & A

What is the purpose of Hayam's negotiation matrix?

Hayam's negotiation matrix is a tool designed to help you choose the best negotiation strategy based on the importance of the outcome and the relationship. It doesn't guarantee a specific outcome, but it helps you approach negotiations in the most effective way for the given situation.

Why are negotiation skills important in the workplace?

Negotiation skills are crucial in the workplace for various tasks, such as salary negotiations, resolving team conflicts, agreeing on deadlines, allocating responsibilities, and more. Strong negotiation skills can lead to better outcomes and even win-win situations for all parties involved.

According to the transcript, what percentage of a negotiator's effort should be spent on preparation?

According to the transcript and the book 'The Mind and Heart of the Negotiator' by Lee Thompson, 80% of a negotiator's effort should be invested in the preparation stage.

What are some key steps to follow when preparing for a negotiation?

Key steps for preparing for a negotiation include: 1) Having a clear goal, 2) Determining concessions you're willing to make, 3) Exploring alternative scenarios, 4) Understanding leverage, 5) Setting clear authority limits, and 6) Choosing the right negotiation approach.

What are the two main factors that determine which negotiation strategy to use according to Hayam's negotiation matrix?

The two main factors that determine the negotiation strategy are: 1) The importance of the outcome (e.g., money, time, or accomplishment), and 2) The importance of the relationship (e.g., maintaining or building rapport with the counterparty).

What is the 'avoiding' strategy in the negotiation matrix, and when should it be used?

The 'avoiding' strategy, also known as lose-lose, should be used when neither the outcome nor the relationship is important. In this case, there is no value in entering the negotiation, so you withdraw or avoid negotiating altogether.

When is the 'accommodating' strategy appropriate, and what is its goal?

The 'accommodating' strategy is appropriate when the relationship is more important than the outcome. The goal is to maintain or build the relationship, even if it means losing on the outcome, making it a 'lose to win' strategy.

What is the 'competing' strategy, and in what situations should it be applied?

The 'competing' strategy, also known as win-lose, is used when the outcome is more important than the relationship. It involves negotiating hard to get what you want, even if it damages the relationship with the counterparty. It is appropriate when winning the outcome is the priority.

What is the 'collaborating' strategy, and why is it considered a win-win approach?

The 'collaborating' strategy is used when both the outcome and the relationship are important. It involves working together creatively to find solutions that benefit both parties, ensuring that everyone gets what they want while maintaining a strong relationship. This makes it a win-win approach.

In what scenario would a 'compromise' strategy be most suitable?

The 'compromise' strategy is suitable when both the outcome and the relationship are important, but full collaboration is not possible. In this strategy, each party gives up a little of what they want to reach a middle ground, ensuring both parties get some of what they want while minimizing damage to the relationship.

Outlines

00:00

💼 Introduction to Negotiation Skills and Their Importance

The introduction explains Hayam's negotiation matrix, a tool for selecting the best strategy in various negotiation scenarios. It emphasizes that negotiation skills are valuable in both high-stakes deals and everyday workplace tasks, such as salary discussions, conflict resolution, and decision-making. The goal is to achieve desirable outcomes, often with win-win results, while maintaining positive relationships. The paragraph underscores the importance of planning for negotiations, quoting Benjamin Franklin's famous line about planning to prevent failure.

05:02

📋 Preparation Tips for Effective Negotiation

This paragraph focuses on the preparatory steps for successful negotiation. It highlights the need to have clear goals, understand concessions, consider alternative scenarios, evaluate leverage, and recognize one's authority limits. Choosing the right negotiation approach is essential, as there is no single best method. These factors help in navigating the negotiation process, ensuring that both outcomes and relationships are effectively managed.

📊 Overview of Hayam’s Negotiation Matrix

Hayam’s negotiation matrix is introduced as a framework for selecting the appropriate negotiation strategy based on two factors: the importance of the outcome (substantive results like money or accomplishment) and the importance of the relationship (building or maintaining it). Depending on how these factors rank, five negotiation approaches—avoiding, accommodating, competing, collaborating, and compromising—are suggested. The matrix helps guide decisions in any negotiation situation by balancing priorities between outcomes and relationships.

⛔ Avoiding Strategy in Negotiation

The 'avoiding' strategy is discussed, which is used when neither the outcome nor the relationship is of significant importance. This strategy is also called 'lose-lose' as no valuable results are expected from the negotiation. It's suitable for situations where participating in the negotiation wouldn't provide any meaningful benefits, so the best course of action is to withdraw or avoid the negotiation altogether.

🤝 Accommodating Strategy: Prioritizing Relationships

In this strategy, the relationship is prioritized over the outcome. Known as 'lose to win,' it involves sacrificing the outcome to maintain or strengthen the relationship. This approach is useful when preserving the relationship is more important than the immediate result, and the negotiator is willing to compromise on the outcome dimension to ensure long-term relational success.

🏆 Competing Strategy: Focus on Winning Outcomes

The 'competing' strategy is for situations where the outcome is more important than the relationship. This approach, known as 'win-lose,' involves negotiating hard to achieve the desired result, even at the cost of damaging the relationship with the counterparty. It is typically used when winning is the primary goal, and maintaining the relationship is not a priority.

🤝 Collaborative Strategy: Achieving Win-Win Outcomes

The 'collaborating' strategy aims for a win-win outcome, where both the result and the relationship are equally important. It involves working together to find creative solutions that satisfy both parties. This strategy fosters trust and long-term relationships while ensuring both sides achieve their goals. It is used when the stakes are high for both outcome and relationship.

⚖️ Compromise: Balancing Outcomes and Relationships

The 'compromise' strategy is positioned in the middle of the negotiation matrix. It is used when both the outcome and the relationship are important but collaboration is not possible. The aim is for both parties to make concessions, so each gets a part of what they want. While there may be minor relationship damage, the goal is to minimize this and reach a middle-ground solution.

📈 Real-World Examples of Negotiation Strategies

This paragraph provides practical examples of applying the negotiation matrix. In the first example, competing is used when negotiating with suppliers for office furniture, focusing on price over relationships. In the second, collaboration is favored when both the outcome and relationship are important, as in negotiations with a key supplier. The third example shows accommodating when a negotiator prioritizes the success of a larger project over their own objectives.

📝 Conclusion: Summary of Hayam's Negotiation Matrix

The conclusion summarizes Hayam's negotiation matrix, emphasizing its role in helping negotiators choose the right strategy based on the importance of the outcome and the relationship. While the tool doesn’t guarantee success, it provides a structured approach for entering negotiations with the best mindset and strategy. The lesson concludes with a positive note, encouraging viewers to use the matrix for future negotiations.

Keywords

💡Negotiation

Negotiation is the process of two or more parties coming together to resolve a difference of opinion or achieve a mutual agreement. In the video, negotiation is described as an essential workplace skill, whether for major deals like business contracts or everyday tasks like salary discussions. The video emphasizes the importance of approaching negotiations strategically to reach win-win outcomes.

💡Negotiation Matrix

The Negotiation Matrix is a tool designed to help individuals choose the most suitable negotiation strategy based on two factors: the importance of the outcome and the importance of the relationship. In the video, this matrix is explained as a guide that helps negotiators plan their approach, ensuring they consider both the desired result and the potential impact on relationships with the other party.

💡Outcome

The outcome refers to the substantive results of the negotiation, such as money, time, or achievements. In the video, the importance of the outcome is one of the two key factors in the negotiation matrix. Depending on how critical the outcome is to the negotiator, different strategies are recommended, such as competing when the outcome is the primary focus.

💡Relationship

The relationship in negotiation refers to the importance of maintaining or building a positive connection with the counterparty. The video highlights that if the relationship is crucial, strategies like accommodating or collaborating may be more suitable. Preserving relationships is essential in many workplace settings where long-term cooperation is required.

💡Avoiding

Avoiding is a negotiation strategy where neither the outcome nor the relationship is important, and the best course of action is to withdraw from the negotiation. In the video, avoiding is presented as a lose-lose approach because it means that nothing of value can be gained from engaging in the negotiation.

💡Accommodating

Accommodating is a strategy where the relationship is prioritized over the outcome. The negotiator is willing to 'lose' on the outcome to 'win' by maintaining or strengthening the relationship. The video describes this as a lose-to-win approach, suitable when building or preserving a relationship is more important than achieving the desired result.

💡Competing

Competing is a negotiation strategy where the outcome is more important than the relationship, and the negotiator aims to win at all costs. This approach, known as win-lose, is appropriate when getting what you want is crucial, even if it damages the relationship with the other party. An example in the video is negotiating a new deal where price is the primary concern.

💡Collaborating

Collaborating is a win-win negotiation strategy where both the outcome and the relationship are important. The goal is to work together to find solutions that satisfy both parties. The video highlights this strategy as the most effective when mutual gains are possible and both parties want to preserve a long-term relationship.

💡Compromise

Compromise is a middle-ground negotiation strategy where both the outcome and the relationship are important, but collaboration is not possible. In this approach, both parties give up something to reach a mutually acceptable solution. The video describes this as splitting the difference, where each side makes concessions to ensure both the outcome and the relationship are somewhat maintained.

💡Leverage

Leverage refers to the balance of power between negotiating parties. The video advises negotiators to understand their own leverage—how much power they hold in comparison to their counterpart—as it affects their ability to achieve favorable outcomes. Recognizing leverage helps in choosing the appropriate negotiation strategy, as it influences how hard one can push for their desired result.

Highlights

Hayam's negotiation matrix helps choose the best negotiation strategy based on the situation.

Negotiation skills are valuable for everyday workplace tasks such as salary negotiations and conflict resolution.

Negotiation strategies are useful even for minor team decisions, such as deciding whether to order pizza or tacos during late work hours.

Strong negotiation skills allow individuals to achieve outcomes they want while fostering win-win results.

80% of a negotiator's effort should be focused on the preparation stage, as per Lee Thompson's book 'The Mind and Heart of the Negotiator'.

Key preparation tips include having a clear goal, understanding concessions, considering alternative scenarios, evaluating leverage, and defining authority.

The negotiation matrix is based on two factors: the importance of the outcome and the importance of the relationship.

Five negotiation strategies: avoiding, accommodating, competing, collaborating, and compromising are suggested based on outcome and relationship importance.

Avoiding strategy is used when neither the relationship nor the outcome is important (lose-lose scenario).

Accommodating strategy prioritizes the relationship over the outcome, choosing to 'lose' the outcome to 'win' the relationship.

The competing strategy is employed when the outcome is more important than the relationship (win-lose scenario).

Collaborating strategy is used when both the outcome and relationship are important, aiming for a win-win result through creative problem-solving.

The compromise strategy is used when both the outcome and the relationship are important, but collaboration is not possible.

Compromise requires all parties to give up a little of what they want to ensure a balanced outcome.

Practical examples show how to apply different strategies in business contexts, such as negotiating deals with suppliers or managing project priorities within a team.

Transcripts

hello and welcome to today's lesson

where we're looking at the negotiation

matrix

and hayam's negotiation matrix is a tool

that can help you become a better

negotiator

it works by helping you to choose the

best negotiation strategy for any

situation

now the tool doesn't guarantee that

you'll get the outcome you want but it

will help you approach the negotiation

in the right way

now in the workplace negotiation skills

are useful every day

yes it could of course be that you're

negotiating a billion dollar business

deal

but negotiation skills are also helpful

for everyday tasks like salary

negotiations agreeing on a deadline with

your boss

solving conflicts with your team

allocating responsibilities to members

of your team

dissipating potentially explosive

differences of opinion within your team

agreeing on suitable vacation dates with

the team member

and even simply deciding whether to

order pizza or tacos if your team is

working late

in short if you work in a team

containing one or more people having

strong negotiation skills will help you

achieve the outcomes you want and

additionally as a skilled negotiator

you'll often be able to achieve win-win

results where the other parties are

happy too

now negotiation occurs every time two or

more people come together to resolve a

difference of opinion

and in any negotiation you will aim to

reach a satisfactory outcome from your

perspective now sometimes you will need

to make compromises along the way to

achieve a good result but not always

benjamin franklin said

if you fail to plan you're planning to

fail and this is especially true when it

comes to undertaking any serious

negotiation that's important to you or

to your organization

in fact according to lee thompson author

of the 2009 book the mind and heart of

the negotiator roughly 80 of a

negotiator's effort should be invested

in the preparation stage

so here are some tips or steps you can

use when you're planning to undertake a

negotiation so first off have a clear

goal work out exactly what it is that

you're actually after

number two concessions work out what

compromises you're prepared to make to

achieve what you want

thirdly look at scenarios what other

options might be available as an

alternative outcome if you can't achieve

your main goal

next consider leverage so understand

your power versus the power of your

counterparty

next we have authority and that means

set very clear limits on what you do and

do not have the authority to agree

and the final one is to choose your

negotiation approach now many people

wrongly assume that there is just one

best way to negotiate but that isn't the

case and it's essential to choose your

approach

based upon the unique situation of your

negotiation and this is the purpose of

the wiki and heim's negotiation matrix

to help you select

your negotiation approach so let's take

a look at the matrix the negotiation

matrix first appeared in a book entitled

mastering business negotiation by roy

lewicky and alexander hayam

it's a tool you should use before you

enter any negotiation and it helps you

choose the best negotiation strategy

based on your priorities now according

to the model you choose your negotiation

strategy based on two factors the first

of which is the importance of the

outcome so how important substantive

results are such as money time

accomplishment etc and the second factor

is the importance of the relationship so

how important relational outcomes are

such as building or maintaining your

relationship

with your counterparty now according to

how you rank these two factors the

negotiation matrix suggests one of five

approaches

to take

towards negotiating so let's take a look

at those approaches

so the first approach is avoiding if

neither the relationship nor the

substantive outcomes are important to

you then the negotiation really isn't

worth entering into at all

this negotiation strategy is also known

as lose-lose because you've nothing to

gain from the outcome or the

relationship it isn't possible for

anything of value to come from the

negotiation

so you implement this strategy by simply

withdrawing from active negotiation or

avoiding the negotiation altogether the

second approach is called accommodating

if your relationship with the

counterparty is more important than the

outcome then you choose this negotiation

strategy and with it you choose to be

relaxed about the outcome in order to

maintain or build the relationship now

this negotiation strategy is known as

lose to win because you deliberately

lose on the outcome dimension in order

to win on the relationship dimension

the third approach is called competing

and when the outcome is more important

to you than the relationship you may

decide to negotiate hard for what you

want even if that results in your

counterparty not getting what they want

and the relationship is damaged so you

use this strategy basically when you

want to win at all costs and it's known

as win lose because whilst you win the

outcome you lose on the relationship

dimension

the fourth approach is called

collaborating and it's appropriate for

when both the outcome and relationship

are very important

it's called a win-win approach as the

aim is to collect to collaboratively

work together until everyone gets what

they want and so everybody is happy

creative problem solving will be needed

to find win-win solutions and you must

invest to build or maintain trust and

your relationship you use this approach

when both parties have a lot to gain

from a successful outcome and you also

want to ensure the relationship thrives

over the long term

the final approach is compromise and

this sits in the middle of the

negotiation

matrix and you use this strategy when

both the substantive outcomes and the

relationship are important but for ever

reason it's not

possible to collaborate now the aim of

the compromise negotiation is that all

parties give up a little bit of what

they want

so that everyone gets

some of what they want that is

you split the difference now there may

be some damage to the relationship but

the aim is to keep this to a minimum

so let's take a look at a few examples

so you can see how you might apply the

matrix

in practice

so example one you've been asked to

negotiate a new deal with the supplier

to provide new desks and chairs for your

office

now in this scenario the desks and

chairs you're interested in could

probably be supplied to you by anyone or

the number of local suppliers now

because you have several suppliers you

can choose from the relationship isn't

that important to you but you are

probably focused on getting the best

price

so in this scenario you would choose the

competing negotiation strategy

second example so again you've been

asked to negotiate with a supplier but

this time they are your biggest supplier

and they're very difficult to replace

likewise you are one of their biggest

customers

so in this case the outcome

and the relationship are important to

both of you

so in this case it makes sense to use a

collaboration strategy

final example you've been asked by a

manager

to manage a minor project but

unfortunately a key person you require

to complete the project doesn't report

to you but to someone else and that

someone else

also needs to use this person to achieve

their objectives and their objective is

to deliver a much more important project

so the approach here

would be

as your project is significantly less

critical to the organization than your

counterparties

in this scenario you might decide to

adopt an accommodating approach to

negotiation whereby you sacrifice

achieving your objectives to allow the

more important project to succeed

now of course it would be a good idea to

discuss this approach with your boss or

your line manager to ensure that they

are happy with

it so in summary lewicci and hayam's

negotiation matrix is a tool to use

before you enter a negotiation

that can help you decide on a

negotiation strategy the tool works by

considering two factors the importance

of the outcome to you and the importance

of the relationship with your

counterparty

now the tool won't guarantee that you

achieve the outcomes you're hoping for

but it will help you approach the

negotiation in the right way

so that's it for this lesson really hope

you enjoyed it and i look forward to

speaking to you again soon