The Basic Map

It’s important for the negotiating team—whether one man or five—to understand these different phases, because different things can happen in them. You don’t have a basis for negotiating unless you have containment. To put it another way, if you don’t know which house you’re going to buy, you can’t negotiate with the seller. There’s no basis for anything but a casual discussion, not a negotiation. Even the discussion is likely to be all over the place. Likewise, you can’t close a deal until you’ve put everything in place—until the negotiations are finished.

The negotiation stage can stretch on for quite a while. Some are done in different stages. And some of the stages use different negotiators.

Take publishing, for example, an area I hadn’t known until I started working on this book. (And no, I didn’t negotiate the deal myself; that’s the agent’s job. I got to be the commander.) Negotiations generally take place in two very different stages. In the first stage, which is generally considered the most difficult, the general terms of the deal are worked out. This involves broad issues like the amount of the advance or the up-front money for the author, a royalty rate, the places where the book can be published, and similar issues. But after the parties come to an agreement, there’s a second stage involving the specifics of the arrangement. A contract must be worked out. And believe me, the hassles over the legal language can get very involved. There’s no deal until all of these issues are squared away.

A common mistake made by negotiators in phased negotiations like this is to think that since the first stage is generally the most important and contentious, the second stage isn’t even a negotiation. Wrong, wrong, wrong. All stages of a negotiation are equally important—even if the issues being discussed are less immediate or even lower on the priority list of wants. They still contribute to the goal. The negotiator still has a serious job to do.

Take a labor contract, for example, where the negotiators have agreed in principle to a three-year contract with a raise of 3 percent each year.

They set the overall parameters and then announce that they have a deal.

But it turns out that they don’t, not yet. Because the contract language hasn’t been worked out. Disputes can easily arise at this second stage: Was it 3 percent over the base? Or 3 percent over the previous year?

Now in that example, the issue should have been worked out in the first phase. But I can’t tell you how many negotiations ultimately founder—and how many bad deals actually get signed—after similar details are overlooked. In the rush for an agreement—which both sides want—important details are often overlooked. When they are, realize that you are still in the negotiation stage.