Can a Business Simulation Game help develop Negotiation and Collaboration Skills?

Article by Ken Thompson, 19 Sep 2019

In business, you don't get what you deserve, you get what you negotiate.

Chester L. Karrass

Getting the most out of your Collaboration and Negotiations

There is much confusion about the terms ‘Collaboration’ and ‘Negotiation’. They are clearly two very important management skills. However the words Collaboration and Negotiation are often used interchangeably although they are in fact very different. 

Let me try and clarify the difference:

“A negotiation is a collaboration/competition between parties to reach an agreement where there are usually common and conflicting interests present”.

In a negotiation if you are too competitive or lack collaboration skills you will turn it into an adversarial negotiation with a winner and a loser.

If, on the other hand, you are too collaborative or naive when it comes to competition within the negotiation you will probably get taken advantage of by your negotiation partner. 

So a negotiation may not involve any actual collaboration (i.e. combative negotiation) and a collaboration may not involve any actual negotiation (i.e. directive collaboration)! However....... both these scenarios are likely to leave at least one party dissatisfied!

One of most successful approaches to negotiation is known as Principled Negotiation (sometimes called Collaborative Negotiation) made popular by the book “Getting to Yes” by Roger Fisher and William Ury. Principled Negotiation can successfully blend negotiation, collaboration and competition. 

We explore this collaboration / completion dynamic in much more detail in our book “A Systematic Guide to Collaboration and Competition within Organizations” but it will suffice for now to say that there are 4 distinct dynamics, each at a different point on the collaborative-competitive spectrum:The 4 blends of collaboration and competition

1. Pure Collaboration

There are few conflicts of interests so little competitive element.

2. Competitive Collaboration

There are more common than conflicting interests so its mostly about collaboration. For example, 2 departments negotiating around a shared resource pool as in the FUSION Simulation. The first priority should be to do what is best for both parties but you also don’t want to be left short.

3. Collaborative Competition

There are more conflicting than common interests so its mostly about competition. For example, coffee shops negotiating around shared market development as in the COMPETE Simulation. Another example is the PLAYOFF Simulation where teams are competing head-to-head but with the opportunity to form and break temporary alliances. The first priority is getting what you need but then if that is secure, then why not help the other party out if you can.

4. Pure Competition 

There are few common interests so little collaborative element.

A successful negotiation is usually a type 2 or type 3. In type 1 there is little to disagree about. Type 4's often result in at least one party left feeling like a loser. Often the losing party won’t tell you this of course but instead will settle the score on the next opportunity leaving you the loser!

Getting into shape before you negotiate

So before you start your negotiations it is worth getting the answers to 4 key questions:

1. WHY might you need to negotiate? 

What is stopping you achieving what you need by yourself? Could you address this without negotiation? 

2. WHO might you need to negotiate with? 

One or many parties? Are there alternative parties? Is it a bilateral or multilateral negotiation? 

3. WHERE might your interests align and where might they conflict?

 Is there a win-win? 

4. WHAT flavour of collaboration makes sense? 

Which of the 4 blends of collaboration we described earlier best fit the bill? How long is the collaboration for, how will it end and what happens then?

Conducting an Effective Negotiation

Once you decide to enter the negotiation then you can follow the 4 Principled Negotiation guidelines: 

1. Separate the people from the problem

The negotiation will go better and will be more collaborative if you can take ego and emotions out of the conversation.

2. Focus on interests rather than positions

The difference between a position and an interest is best illustrated by a short story. A husband and wife both want an orange but they only have one between them. If they negotiate by positions they will split the orange in two. However, if the couple negotiate by interests they may discover that the woman wants the orange peel to make jam and the man wants to eat the orange fruit and can agree a “win-win”. Note that in negotiation by positions you often end up in a compromise which suits neither party. 

3. Generate options for mutual gain

If focusing on interests is all about listening to each other, then generating options for mutual gain builds on this by encouraging both parties to work together, to collaborate, to create “win-win” options. It is very important that this step is undertaken in a mood of speculation and brainstorming. The objective is to create lots of potential alternatives for review rather than to quickly find the best one – that comes in the next step.

4. Insist on using objective criteria

If you have done the previous steps well you will have a reasonable list of “candidate solutions.” Now you need to review this list in a systematic way against a pre-agreed set of criteria to find the best solution for both parties. A powerful tool within principled negotiation which can protect against “power negotiators” is the BATNA (Best Alternative to a Negotiated Agreement). A BATNA supports the principle that no deal is better than a bad deal and that you can always walk away. 

People sometimes wrongly describe a BATNA as your “bottom-line” negotiating position, below which you will walk away from the deal, but it is not quite the same thing. For example, say you are meeting with a prospective supplier of a service you wish to purchase. Your BATNA in this case could simply be you sharing near the beginning of the meeting that you have already identified another supplier who can meet your requirements and costs. Before you go back to them to close the deal you wish to see what this new supplier can offer.

Using a Business Simulator to test and improve your collaboration and negotiation skills

In Business Simulation Games like COMPETE there are 7 discrete "touchpoints" which provide perfect opportunities to put collaboration and negotiation skills into the firing line: 

  1. Agreeing your team goals 
  2. Reviewing/refining your team goals with other teams 
  3. Making your team operational decisions in each round of the Simulation
  4. Getting your team back on track after a misstep
  5. Helping another team get back on track 
  6. Dealing with the unexpected collectively 
  7. Managing the critical final round of the Simulation (end-gaming)

Conclusions

Negotiation and Collaboration are two very important skills which both need to be mastered and used synergistically to create effective agreements. If done well these agreements can be successfully implemented and leave no resentment or bad feeling on either side. Web-based Business Simulations such as FUSION, PLAYOFF and COMPETE can be used to rapidly accelerate and deepen learning in these areas.

Compete Simulation

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More about Ken Thompson

Ken Thompson

Ken is a practitioner, author and speaker on Leadership, Collaborative Working, High Performing Teams, Change Management, Project Management and Business Acumen. His work has featured in major publications including The Guardian , Wired Magazine, The Huffington Post and The Henry Ford Magazine. Ken has also spoken at many international events including TEDx, the Institute for Healthcare Improvement (IHI), Learn Tech (London) and NASA.

Ken is Managing Director of Business Simulations Ltd.

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Systematic Guide to Collaboration and Competition within Organizations

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