Negotiation is a tricky thing. You don't want to limit your options too early because that might prevent good outcomes. But at some point, if the other guy is being silly and you know you have viable alternative roles as your BATNA, cutting to the chase just saves everyone time and makes sure they understand that something is a deal-breaker.
This is known as the Best Alternative to a Negotiated Agreement, or BATNA, and it's a pretty helpful concept: the better your next best option is, the better position you will be in to negotiate.
Knowing your BATNA is important so you don't take a deal worse than your BATNA, but the whole point of negotiation is to get something better than your BATNA.
You should never lead a negotiation with your BATNA because then your counterpart is only going to give up the absolute minimum above your BATNA, thus depriving you of all the surplus.
I've always found this to be the trickiest, both in terms of defining it (in advance of a negotiation) and being willing to stick to it (during the discussion). Sometimes understanding that the BATNA is just the time saved can be helpful.
NB It's related to other advice that 'deals exist in order to fall through'.
"Best alternative to a negotiated agreement" (BATNA) is from 'Getting to Yes: Negotiating Agreement Without Giving In', Fisher, et al. The idea is that you want to be aware of what your options before entering a negotiation.
The strategy you outline is classic BATNA. Your BATNA is your best alternative to negotiated agreement - your walk-away position. The stronger that is, the more leverage you have in negotiating. By improving lead times, your friend improved his BATNA, as you say, so much that he no longer needed the negotiation.
Well actually, what you did was negotiate, but with the leverage of a good BATNA. Having a good BATNA is what makes negotiation much easier and much more likely to be to your advantage. In things like a job negotiation, it's also evidence of objective market conditions - i.e. it's not just you being unreasonable.
negotiation is all about context. Knowing your BATNA is the first step. That will give you a baseline for your negotiation. Like in trading, you only hear about the success stories about top notch negotiators. The reality is much more nuanced than that.
Outcomes like this happen when you don't have a strong BATNA. Maybe I'm being naive, but I'd rather spend my time securing a solid BATNA instead of learning how to become a skillful negotiator.
After all, I'm never going to be nearly as good at negotiating as these corporate M&A honchos. But, if I have multiple interested parties or a solid fallback plan to a non-outcome, negotiating is pretty straightforward: "We'll just let the market decide on price."
BATNA - Best Alternative To Negotiated Agreement. If you subtly imply that you can walk away and buy elsewhere, then you can talk them down. You lose a bit of time, they lose their commission. If you know what their commission would be (or you can make an educated guess), you can talk them down a long way.
But if you behave as though you must buy there, they have no reason to drop the price.
So, BATNA may not be the ultimate negotiating tool as the prevailing literature seems to indicate. Interesting article! Focusing on the mutually beneficial aspects of negotiations does strike a chord with my inner economist.
If it is a single-issue negotiation (i.e. know your own bottom line and there is no BATNA https://en.wikipedia.org/wiki/Best_alternative_to_a_negotiat... other than this one choice), therefore you're not afraid to lose (i.e. there are lots of potential suitors), then bargain like a maniac. The only thing they have to hold you by is a time-limited offer, but by doing this they've revealed part of their own non-bottom line (i.e. fear of losing is part of their BATNA), so explore this.
Have recommended before and recommend again the book 'Getting to Yes', and Harvard's very open research and sharing in this area: http://www.pon.harvard.edu/
Getting too serious? Not at all. Harvard's role-plays that can be purchased very cheaply ($1-3 per copy) are great teamwork activities.
They tend to focus on numerical amounts denominated in dollars, but these financial numbers can be easily substituted for time, number of people, anything that's a number. Practicing new concepts with things you're immediately familiar with tends to lead to remembered solutions. Instead save the comparison and application to the postmortem.
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