Nolan Martin :
When you’re talking about organizational interest, you’re really thinking about the strategic, the financial, operational, relational. And then we’re gonna add that fifth component, and that’s personnel. All of these are going to be interest of the organization. So Aram with strategic organizational interest. What are we talking about here?
Understanding Organizational Interests in Negotiation [00:17]
Aram Donigian :
Yeah, so I think we’re talking, you know, building a brand image, being able to keep customers happy, managing risk really well. I mean it’s, we just need to manage risks, streamline supply chain constraints. Oftentimes businesses are trying to manage their margins. They’re looking to expand into adjacent markets or potentially respond to, preemptively to different competition that they’re anticipating competitive threats, expanding their product line, their service.
Maybe to existing customers or to future customers, so they might be trying to expand their customer base. Obviously, organizationally companies are always trying to increase efficiencies of their operations. How they’re handling fixed costs versus variable costs. And managing their cash flow and all those things show up so often in interest.
And to your last point too, they’re trying to manage human talent, right? It’s very costly to let your employees turn over, to have a high turnover rate with employees. So they’re trying to keep people engaged, keep people happy. That’s a number of things that the companies are trying to achieve through negotiation.
NM :
So, whenever you’re negotiating and you really just have to think about what’s the overall different interest so that as you start to prepare and plan how you are going to move through the negotiation, you at least have some sort of thought. And these are assumptions and we can always test our assumptions as we talk with our counterparts to really understand the interests of all of the different stakeholders that are involved in the negotiation, so.
AD :
Yeah, I would build on what you said about, we do make assumptions about what their interests might be. If we prepare well in negotiation, we’ve spent time thinking about ours and I know we’re gonna get into individual interests in a moment, but we thought about our organization’s interest.
And hopefully we’ve spent some time thinking about their organization’s interests. And so as we get into the negotiation, a few helpful things to start getting the conversation flowing around interests is sharing our own, building some reciprocity, get them to share back and inquire about theirs.
I’ve thought about what yours might be, curious what I have wrong. Let me test my assumptions. I understand what your position is. Why that position? How does that help you? Those are some good ways to really get to those underlying organizational concerns they might have.
NM :
And so what makes this all very complex is that the individual also has interest. So although it may be an organizational negotiation. That individual that is your counterpart is going to also have some, probably not for selfish concerns, but definitely some of their own interests. Isn’t that right, Aram?
Recognizing the Human Element in Every Negotiation [02:46]
AD :
Yeah, that’s absolutely right. I think you’ve said it well, and I think sometimes our tendency now, if we’ve done a good job of thinking about our organization’s interests and their organization’s interest is we start to ignore or forget that there’s a human being there across the table from us, right?
Or hopefully if we’ve reframed the setting, maybe next to us at the table and we’re solving this problem and that person has interest too, those come in a variety of shapes too, right? They’re trying to earn a bonus perhaps, or meet a certain performance metric, or they are, they’re trying to just avoid the hassle or inconvenience of going back and explaining to their boss.
Something that you know, is opposite of what their boss wanted. They’ve got interest around, building new skills, demonstrating some competency as a negotiator, as a problem solver at the table. They’re probably looking for, both immediate and future positioning career opportunities within the organization if they’re trying to maintain internal relationships.
If this is a long term, I can imagine a long term kinda supplier relationship. They’re concerned about, you know, keeping us happy and maintaining that relationship, but not at any cost, right? At a fair it’s some, doing something that’s fair and reasonable. And I think if you get a little higher up we sometimes talk about Maslow’s hierarchy needs.
People want to be respected. They want to do work that really has meaning and matters for the world or matters for the organization. And so I think those sorts of things come into play too. We often think about interest as being not just the tangible or substance components to a negotiation, but also being some of those psychological and emotional things too that are occurring for a person and to an organization as well.
NM :
Yeah, and I think, jumping into Psychology 101 here. I’ll rewind a little and explain Maslow’s hierarchy. I’m sure the majority of our listeners have already heard this once in their life, but I’ll basically go over it one more time. Maslow’s hierarchy of needs is basically a pyramid, and at the base level you have your physiological needs.
And so these are the most important things that someone needs to satisfy before they can start getting at the other levels, which I’ll get to here now. So the fourth level is gonna be safety needs. So as long as they feel safe, then that addresses that level. Then you’re gonna have belongingness and love. So it’s a third level up from the bottom.
Then at the second level to the top, you’re gonna have esteem needs, and then at the very top is self-actualization. So what Aram just said, is that we can’t immediately jump to trying to put someone’s name on a library and think that we have satisfied safety needs.
So if there’s a safety concern that needs to be addressed first before we can really start digging at interest, that may be up and above that on Maslow’s hierarchy of needs. Does that make sense, Aram?
Understanding Interests Through Maslow’s Hierarchy of Needs [05:22]
AD :
Yeah, it does. And I think the discipline is in digging around what those needs are. Let me give you an illustration that I like using.
I walk in the other day to our kitchen. And my two youngest daughters who are five and three are fighting over the very last orange that we have in the house. Okay. And my 5-year-old who’s a little taller is holding up overhead and says, I got the orange. I got the orange. It’s mine. And I walk in, and they’re just, and I’m trying to get work done. I can’t remember if you and I maybe had been on a call or something, but anyway, so I grabbed the orange, and in the wisdom of Solomon, I grab this thing, which I know looks very scary. This was a gift from my mother. It’s a meat cleaver, right?
But I grab it and in the wisdom of Solomon, I put it down and I chop that orange in half. Problem solved. They both get half the orange, right? Problem solved, but the problem’s not really solved. Is it? Because if I watch them for a little bit. I noticed something, I noticed the 3-year-old who has sugar problems carefully, she just needs energy. She’s hungry all the time. It seems like she’s growing. She’s a grown little lady. She peels the orange very carefully, eats the fruit of the orange, but she doesn’t feel great ’cause she really needed to satisfy her hunger. She really needed a whole orange and she really needed that sugar from an entire orange.
And if I watch my 5-year-old who’s just starting to learn how to bake and has a great class. That she goes to of kids and she had promised them she’d bring in some chocolate orange brownies. If I watch her she cakes her half of the orange and she carefully peels it, and then she uses the orange peel, she grates it to make some chocolate orange brownies, but she can only make a half batch.
So now she’s not gonna have enough for the entire class, and she’s gonna let her teacher down and she’s gonna let her classmates down. And so she’s disappointed, right? She’s frustrated. They had different interests that I didn’t take the time to uncover. And had I done that, I could have potentially solved for the real problem. And that’s why kinda as you lay out Maslow’s, it’s really important to spend time digging into these, these layers of interest.
NM :
And that’s not the only story or the only illustration that we’re gonna bring to this.
Why Understanding Interests Unlocks Collaboration & Lasting Solutions [07:07]
AD :
You know, there’s so many examples. So one is, so you know why? Because you and I would say that interests are the essential foundation for all the sort of work we do. And the reason that we tried to build working relationships and develop good, effective two-way communication, manage the process the reason that we’re able then to get creative around options and different possible solutions.
Find things that are fair, reasonable, defendable and make commitments that last is because we understand interest. In fact, I would say too, our ability to know our walkaway, if we bring in the seventh element there of alternatives, is really enhanced because I know what I’m motivated by.
I know what my needs are and so I like to, another illustration, let me just to emphasize why these things are important, is to use Lego blocks and if you ever take a look back and they, again, folks that are just listening, I have on my shelf here, I have one of my favorite Legos. I love Legos. They’re so much better than when we were kids.
NM :
We were kids when you were a kid. And then I probably had…
AD :
Oh, ouch, ouch, ouch. That hurts that. Yep. Shots fired. Shots fired. Shots fired as my wife and I like to say. Alright, that is my Seinfeld Lego set. Okay, so it just tells you how much I like Legos when kids get me a Lego set once a year or so. That was a show about nothing, by the way. I hope ours is a show about something. There you go. There’s a little plug.
There’s a number of good Seinfeld negotiation videos, but if you think of interest versus positions as building blocks. If you negotiate around a position, a demand, okay? The surface level, what somebody wants, that’s uncovering two or three Lego bricks and you put these things together.
If I can get ’em put together, you can’t build a whole lot, right? There’s not a lot of room for creativity, what you can create, all right? When you bring an entire bag and I’ve got an entire bag here, I don’t try to pour it out. But these Legos are so cool these days in terms of all the different shapes and sizes, just like interest, right? That they come in.
The things you can then build together is just enhanced. So this whole thing that we’re gonna try to get to around value creation, it’s only possible if you understand all the interests that both parties bring and you’re, both organizationally and individually.
NM :
If you could please rate, review, and subscribe wherever you listen to this podcast. We greatly appreciate it and we’ll see you in the next episode.
