Research Summary

3-D Negotiaton

by James K. Sebenius


In articles and books, often with David Lax, I have been developing a broad approach to effective negotiation that encompasses three "dimensions." In this "3-D" approach, our first dimension — "tactics"-- is the most familiar territory. Tactics are the persuasive moves one makes and the process one chooses for dealing directly with the other side, at the table. To most people and most researchers, "negotiation" is synonymous with this first dimension.

Where one-dimensional negotiators hone their back-and-forth tactics, we also focus on underlying value, which often means more than just price. Our second dimension—"deal design"—systematically probes that value and develops principles for crafting agreements that unlock it for the parties. For example: should the prospective agreement really be a pure price deal? Does some sort of trade between sides make sense and, if so, on what terms? Can we unbundle different aspects of what looks like a single issue, and give to each side what it values most? Should it be a staged agreement, perhaps with contingencies and risk-sharing provisions? If there’s a contract involved, should it be an unusual kind of contract – one with a more creative concept and structure than we’ve used before? One that meets ego, needs as well as economic ones?

Where one-dimensional negotiators mainly focus on actions at the table, we also analyze moves away from the table, designed to shape the situation advantageously. Our third dimension – "setup" – flows from our observation that, once the parties and issues are fixed, and once the negotiating table has otherwise been set, much of the game has already been played. Therefore, before even showing up at the conference room, 3-D Negotiators act away from the table to set up the most promising possible situation, ready for tactical interplay. This means ensuring that the right parties have been approached, in the right sequence, to deal with the right issues, that engage the right set of interests, at the right table or tables, at the right time, under the right expectations, and facing the right consequences of walking away if there is no deal. If the setup at the table isn’t promising, this calls for moves to re-set it more favorably. A superior setup can enable tactics at the table to achieve otherwise impossible results.

In practice, a 3-D negotiator first does an "audit" of barriers to agreement—tactical and interpersonal challenges, deal-related problems, or setup flaws—then crafts a 3-D strategy: an aligned combination of setup, deal design, and tactical moves designed to overcome the barriers.