Phase Three — Closing

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The final phase of a negotiation is a time for reaching consensus and building an agreement. A little hard work in this phase can ensure that the negotiation achieves it desired results.

Closing a negotiation can mean two different things: First it may be a question of how to bring different ideas to a mutually agreed conclusion. A second possibility view of ‘closing’ is what means negotiating parties can use to acknowledge or formalize the idea that agreement has been reached.

Recognizing that parties have reached agreement can be quite simple. One can ask the other(s), “Then, have we reached agreement?” The parties can shake hands, make a public announcement, or sign a document. The real issue is that each has to make it clear to other negotiators that a mutually agreed conclusion has indeed been reached.

Reaching Consensus

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People have different ideas about what constitutes consensus. When applied to negotiations, consensus usually involves substantive agreement on key issues. Not everyone needs to be completely satisfied to reach consensus, but everyone needs to feel that the outcome of the negotiation is something they can live with.  Building consensus is one of the hardest parts of negotiation, because the negotiating parties will potentially have radically different attitudes to what they feel the results should be. 

Consensus has different meanings to different people. To some, it is unsatisfactory compromise, with both parties ending on a solution which does not give them everything they want. However, the simple fact is that you cannot please all of the people all of the time. Consensus is about pleasing as many people as far as possible. The best solutions, in reality, are the ones which leave nobody too displeased. In an ideal world you could please everyone equally and completely. But this world is not ideal, and the realities dictate that to please one person you will usually have to displease someone else. 

This is why you have concessions: if you push for 100%, it is possible to end up with 0%. It is much better, therefore, to have two parties who each have a significant percentage of what they want. Reaching a consensus may have a bittersweet taste for some parties, but it is better to have 50% of something than 100% of nothing.

Building an Agreement

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Building an agreement takes a special skill — the ability to translate generalities into specifics. Negotiators should realize that at this stage of the process the bargaining is over. They should try to create an agreement based on a fair and accurate interpretation of the consensus the parties have reached. At the same time they want to be careful they do not inadvertently give something up by not paying close enough attention to the written agreement. 

Sometimes in negotiations, there can be a tendency to arrive at certain principle agreements and think that the job has been done. There is more to negotiation than offering a concession here and stipulating a limit there. If you make the mistake of thinking that the negotiation process has ironed out all of the problems in a deal, then you will find that there is a nasty shock waiting for you when you come to formalize the agreement. 

It may help to think of the negotiation process as a news broadcast. It is great to have headlines that will make people sit up and take notice, but in order for these headlines to actually have any meaning it is necessary to write the stories. While the basic principle agreement reached in the negotiation room will be the headline, and what sticks in people’s minds, it needs to be backed up with details. A good negotiations team will have at least one “details guy (or gal)” who is able to get the small print in place after the negotiators have put the outline in front of them.

Setting the Terms of the Agreement

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We are all familiar with what can happen when the terms of an agreement are not clearly spelled out. For example:

Two employees agree on their individual responsibilities for updating their company’s website. A week goes by and nothing has happened. Each person was waiting for the other one to take the first step. They had defined their responsibilities but they had not formulated a plan for carrying them out.

For an agreement to be successful, all the essential terms must be clearly stated in writing. It is quite one thing to have an agreement in theory but it will be essentially meaningless without the practicalities. The agreement which emerges at the end of negotiations needs to be backed up with the “how” factor. What emerges from the initial negotiation is what you are going to go, and possibly when. The “how” is the most important of all, though, as without the firm details of how you are going to put everything in place you can agree whatever you want and it will not matter.

Case Study

Tiana and Hugh were tasked with completing a project for their company. The project was important and had a heavy work load, so Tiana and Hugh met to negotiate who would be doing what. It took some time, but both partners got a fair share of work and felt satisfied with the deal. A week later, Tiana hadn’t received any word from Hugh. When she met with him, Hugh told Tiana that he had been waiting for news from her. They then realized that they should have came up with an action plan during their negotiation, as they now had wasted a week. They agreed that their negotiation wasn’t closed properly.