Positions vs. Interests – what are they and why do they matter?
The primary failure I see when parties approach a negotiation is the wholesale failure to adopt a structured approach – (see my article on the steps to a successful negotiation at http://www.dawsonjenner.com/the-5-phases-of-a-successful-negotiation/)
In doing so the parties fail to reap the benefits of a crucial step within the preparation phase, namely to consider and assess both their and the other sides positions and more importantly the interest that underlie those positions.
A simple tale
The example used by Roger Fisher and William Ury, in their hallmark book “Getting to Yes”, of Mary Parker Follet’s story serves to illustrate the key difference between a party’s position and its interests.
Briefly Mary Parker Follet tells the story of two men quarrelling in a library.
The disagreement concerns a window, the one man wants the window open while the other wants it closed (here we see the parties opposing positions in respect of the window).
The two men argue back and forth against a seemingly unresolvable problem. They bargain through various offers in respect of how much to leave the window open: slightly, half-way, three-quarters and so on and so forth.
No solution the parties can come up with seems to be able to satisfy them both.
Enter the librarian...
She proceeds to ask the first man why he wants the window open, to which he replies “To get in some fresh air”.
The librarian continues to ask the other man why he wishes to have the window close, to which he responds: “To avoid the draft.”
After applying her mind to either party’s interests she proceeds to open a window in the next room, bringing in fresh air without a draft.
Mary Parker Follett’s story is a perfect example of how seemingly irreconcilable positions can easily be resolved once the underlying interests of the parties are explored.
It is important to highlight here, that it is the interests of the parties that define the problem.
The basic problem in any negotiation lies not in the parties conflicting positions but in the conflict between each side’s needs, desires, concerns, and fears.
This situation is very typical of negotiations within the construction and engineering industry; very often behind the Employer and Contractor’s opposed positions lie shared and compatible interests.
Roger Fisher And Ury in “Getting to Yes” outline 5 practical key considerations in assessing both your own and the other side’s interests:
1) Ask “Why”
Here you need to put yourself in the position of the other party or as the phrase goes to put yourself in their shoes.
Here you need to take each position they are adopting and ask “Why”?
Let us turn to the classic Employer’s claim for delay damages against the Contractor’s claim for an extension of time.
The Contractor in assessing the interests of the Employer needs to ask “Why” the Employer is levying delay damages.
The answer is never as simple as “because the Contractor was late”. I have seen on many occasions that Employers are willing to negotiate around the imposition of delay damages, and having worked for numerous Employer’s I can vouch for the fact that a contractual entitlement to levy damages merely due to the late completion of the works is not the underlying interest most Employers are seeking to satisfy.
Contractually the purpose behind a liquidated damages provision is to avoid having to prove a damages claim for the losses suffered as a result of the breach - late completion.
There we have our first interest – potential losses as a result of the Contractor’s late completion – one such head of loss may be the claims suffered from other follow on Contractor’s.
This is key – it is often the claims from the follow on Contractor that the Employer needs to offset by recovering damages from the late Contractor.).
During this stage it is tempting to jump to the creating solutions stage of the negotiation process. However you must guard against this, the time will come for creating solutions to satisfy the needs you have identified.
Well I have often seen that where there are numerous defects in the completed work Employer’s tend to take a much harder line on Contractor’s in respect of levying delay damages
Where the works are of a high quality with little to no defects Contractors are more often more successful in negotiating away a substantial portion of any delay damages.
Here then our second interest emerges – Employers have an interest in high quality work done by reliable Contractor’s on a repeatable basis (once again we do not move on to creating solutions to satisfy this need just yet).
2) Ask “Why Not” Think about their choice
This concerns an analysis of asking what interests of the other party stand in the way of them agreeing to what you have asked for. To change the other parties mind you need to first understand where their minds are right now.
3) Realise that each side has multiple interests
Regardless of who you are negotiating with, be it the Employer, the Project Manager, the QS, the Contractor you must realise that all parties will have a constituency to who’s interests they are sensitive.
To properly understand a negotiators interests means to understand the variety of all the differing interests that they need to account for.
4) The most powerful interests are basic human needs
In assessing positions it is useful to consider those basic interests that motivate all people.
If you can satisfy these basic needs you will greatly increase your chances of reaching a mutually acceptable agreement.
The 5 basic human needs are:
- Economic well-being
- A sense of belonging
- Contractor over one’s life
Remember what is true for individuals in this sense remain true for groups, nations and corporations.
The failure to meet basic human needs to very apparent in wage dispute where the parties are bargaining over percentage increases but what is really driving the dispute is the failure to recognise and satisfy the employee’s basic human needs.
5) Finally make a list
In identifying the various interests of the other party it is imperative that you make a list and write down the various interests that you identify.
The purpose of this is not just to help you remember all the identified interests but writing them down further serves to improve the quality of your assessment as you learn new information and to place interests in their estimated order and importance.
Assessing the underlying interests that motivate parties positions is key to creating solutions which satisfying the parties needs as opposed to merely meeting the parties demands.
Without conducting a full interests and needs analysis the parties run the risk of leaving most of the value available on the table is one of the main causes parties leave a negotiation unsatisfied.
The above article is modified from “Roger Fisher and William Ury – Getting to Yes: Negotiating an agreement without giving in” (2012, Random House Business Books)