When opportunity comes, it is too late to prepare.
— John Wooden
INTRODUCTION
Active negotiations occur every single day in any setting where 2 or more people interact with one another. Simply put, negotiation is the art of making a deal. The competency for a practitioner to efficiently negotiate an agreement, both within and outside of the practice, has a dramatic influence on the success of the organization. Examples can be seen throughout the eye care field ranging from discussing salaries with employees to prices of capital equipment with vendors.
The approach to negotiations, including its execution, is like other stepwise procedures like refraction and cataract surgery. The key is to be well-prepared with a clear plan and a set of goals. With a proper understanding of the primary issues that are organized into a prioritized list, the principles of negotiation can be applied to navigate through any deal. One critical piece to appreciate is that, in most deals, there are many more dimensions than just the financial compensation. The ability to recognize all the issues at play along with the value they each bring to all sides characterizes an effective negotiator.
This chapter presents and explains basic negotiation principles to provide a fundamental support structure to use in different situations that occur in eye care. It includes a systematic approach that allows the reader to prepare for a deal-making opportunity. The end of the discussion presents various useful strategies to incorporate when working with different types and personalities of counterpart negotiators. The goal of the chapter is to train the eye care practitioner to successfully execute discussions that create strategic advantages. These favored results allow the practice to differentiate themselves from their competitors and develop the practitioner into an ideal negotiator.
WHAT ARE NEGOTIATIONS?
Businesses behave like individuals in many ways. One of the most common characteristics they share is that each has its own set of wishes and goals. In an attempt to realize these desires, agreements with another party need to occur. This process of working with another person or organization requires a series of discussions where wishes are traded back and forth between the sides. The purpose is to reach a satisfactory resolution where both parties are better for having negotiated together.
Effective negotiations do not happen by just having the two sides sit down to talk. The best discussions utilize a mix of art and science. Key issues are identified, positions on each are determined, and a set of breaking-point demands are delineated through the use of guidelines and strategies. Constructive negotiations generally begin with the countering sides having clear positions and insight about the items to be discussed. This requires careful thinking and analysis before meetings are ever held. Therefore, the single most important factor to have an effective negotiation is preparation.
Once the background homework is complete, the two sides can engage productively in discussions. The focus shifts from preparation to strategic collaboration. However, not all interactions in a negotiation setting occur with the counterparts behaving in an advantageous manner to get the best results overall. The influential negotiator understands that each interaction is different, both in issues and people. It is in this and similar settings when having a skill set to help the other side arrive at a more productive state is extremely beneficial. Despite all this time and effort taken to reach an agreement, sometimes the best solution is to know when to walk away without a deal.
NEGOTIATIONS IN EYE CARE
The significance of possessing strong negotiation tactics in an eye care practice is exemplified by the constant use of them in everyday interactions. Whenever there are 2 or more sides discussing a situation that needs to be resolved, the process of negotiating occurs. This is unavoidable as each has its own set of interests it wants to meet.1 The successful practice owner accepts these activities’ inevitable challenges and acquires the necessary competence to excel in those opportunities. This point stresses the critical importance of being prepared.2 For those that are hesitant to partake in negotiations, they typically find themselves on the short end of these discussions that will occur regardless of whether they want to take part. The essential competencies in negotiations for the productive eye care practitioner to perform are the following: prioritizing preparation, considering issues and interests, establishing target and reservation points, strengthening alternatives, and applying negotiation skills.
Importance
There are some individuals that believe they thrive in difficult times when the pressure is highest. They even use this excuse to procrastinate until the last moment to complete a task to induce the stress. However, most people do not share that same feeling as stressful situations do not result in the best effort for them. This latter group of individuals places value on the process of preparation. They feel most comfortable once they have had time to review, practice, and reassess their work. Otherwise, they feel their efforts will be incomplete and suboptimal.
Proper preparation makes every individual, including those that like to procrastinate, better during negotiations. Prosperous individuals understand that the process of getting ready allows them to complete their homework, or due diligence, on the relevant issues. This includes thorough research and thoughtful strategic planning before the initiation of any discussions.
Another important benefit to preparation is the minimization of emotional influence on the actual talks. A common pitfall of human nature is to allow feelings to affect our thought processes in the heat of a discussion.3 This effect escalates with increasing importance of negotiations. Emotions can overtake the mind, which emphasizes the need for preparation. Readiness encourages actions and behaviors that are logical through strategic thinking. This approach maximizes outcomes while simultaneously preventing knee-jerk reactions. The value is the avoidance of questionable decisions when they are reviewed in retrospect.
This discussion does not mean that for each negotiation there should be an exhaustive preparation process. In reality, the amount of time given to get ready may be limited. The answer on how to best prepare in a short period of time is by practicing the process of negotiations beforehand.1 Allow this activity to become second nature because of its importance and frequency in life. Preparation time decreases and its quality increases as individuals practice and engage in negotiations. This process develops skillful negotiators that produce high-quality results with the use of efficient time management.
Keywords
Negotiations: The art of deal-making
Negotiation grid: A preparatory guide created to identify and develop key topics that enables the use of thoughtful tactics to strategically maximize results in a negotiation
Milestones: The long-term goals attempted to be accomplished with the aid of negotiations
Figure 6-1. Template of a negotiation grid.
Applications
Most negotiations occur without much thought or fanfare because they lack importance. The repetitive nature equates it to that of driving a car. It is so deeply ingrained that, unless there is a dangerous problem such as an unexpected obstacle on the road, the usual motions are run through and a negotiated agreement is reached. However, when faced with difficult negotiations or an unusual driving situation, the moment of active negotiations is not the optimal time to think strategically about a solution. Chances are good that the individual will still be able to get through the discussion or past the obstacle, but the results are more likely to be suboptimal. This situation illustrates the old sports adage, “You play the way you practice.”
The time spent on educating oneself about the mechanics of negotiating and strategies to achieve maximum results is invaluable. It begins by taking a systemic approach to understanding the scenario and utilizing a method that provides comprehensive preparation. This process can be achieved by incorporating a negotiations grid to prepare for and play out a comparable situation (Figure 6-1). These guides break down the problem into various key elements that build up to an effective course of action to incorporate during discussions. The goal of all this effort and time is to position oneself with a greater likelihood of reaching the desired milestones.1
Immediate Action Items
Have you ever formally prepared for a business-related negotiation? The time to do this is now when it can be practiced, evaluated, and improved without the costs of error. This chapter will revolve around an example of how to hire a new physician to the practice. Take a moment to identify some issue in your organization that will likely need a round of negotiation. Then, create a negotiation grid for it and complete it as we progress through the different sections. The following are some cases you can pick from if you cannot think of any to use: purchasing a new optical coherence tomography machine from a vendor, discussing your new lease extension with the landlord, and negotiating capitation rates from a payor. Now, obtain as much background information you can gather about the situation to best complete this preparation.
Considering Issues and Interests
Importance
Although negotiations focus on particular topics, what individuals think they are discussing in the same meeting may be different on each side. Part of productive meetings is the preparatory exercise of thoroughly identifying what are all the relevant points to be addressed. This requires each person to consider not only what is pertinent for him- or herself, but also what might be of value for the other side.
Even though one side may not consider a particular discussion point to be necessary, this does not mean it is worthless to the other side. Appreciating all the key issues opens up unforeseen opportunities that can further optimize results for everyone. The opposing parties place different relative values for the given topics. This asymmetry enables better solutions for both sides if each trades off what is less important for something that is of more value to them. Successful people utilize these comprehensive assessments that consider all the factors involved to create an advantage when positioning and executing during negotiations.
Keywords
Situation: The current problem(s) that need to be addressed in the negotiation
Parties: The different sides that are involved in the negotiations
Stakeholders: Represents the collection of individuals that has an interest in the outcome of the negotiation even if they are not physically present
Issues: The points of discussion that need to be addressed and agreed upon
Interests: The underlying reasons the various sides have each issue
Assumptions: The beliefs one holds about the other side and its issues
Applications
The preparatory process for a negotiation begins with the identification of why it is taking place. The purpose is defined as the situation. It is usually expressed in a statement using broad terms. This approach can be used to get ready for an upcoming negotiation at Teymoorian Eye Associates. The situation is that the practice is looking to hire a new associate to provide eye care.
Teymoorian Eye Associates has a scheduled meeting with a promising, perspective physician to fill that position. The parties involved in the negotiation are Dr. Snow, a physician partner at the practice, and Dr. Soto, the physician applying for the position. Although Dr. Snow and Dr. Soto will be the ones meeting, the stakeholders for this negotiation are larger groups of individuals. The following represent the primary stakeholders besides Dr. Snow and Dr. Soto: the other 3 partners at the practice (Dr. Teymoorian, Dr. Kim, and Dr. Raoof), and the wife and young daughter of Dr. Soto (Olivia and Emily, respectively).
Discussions leading up to this meeting have revealed 3 issues that need to be resolved. They are the starting salary and bonus structure, the number of vacation days in 1 year, and whether this position is considered partner track along with the number of years to reach it. The interests for the primary issues are different on each side. Dr. Snow and the practice are looking to hire a smart and hard-working doctor that fits the culture of the organization. This includes being willing to sacrifice short-term salary structure to eventually become a partner. Dr. Soto would like to join a large, multi-specialty practice that permits him easy access to ocular subspecialists and live near Olivia’s family. He is not sure if he ever wants to take on the responsibility of being a partner.
Each side makes assumptions about the other, even if these thoughts are based on facts or not. Dr. Snow thinks that Dr. Soto will behave like a “typical millennial” and wants the highest salary possible while asking for the most amount of time off. Dr. Soto believes that Dr. Snow will think like an “old-timer” and looks for cheap labor to work hard and never offer partnership. Both Dr. Snow and Dr. Soto have these assumptions because of past experiences and what they have heard.
Immediate Action Items
Who are all the parties in your practice negotiation and what do they really want to accomplish with these talks? Take time to consider everyone involved on your side of the discussion, including those who are not present but will be affected by it. Although you will not know all of the details, answer the same questions for the opposing side from the information you gathered.
Establishing Target and Reservation Points
Importance
The point of having negotiations is to engage in an exchange process that results in the individual sides achieving their desired goals. Again, the value of preparation continues to this section on what the different parties wish to obtain during the discussion. Thoughtfully determining specific targets for each issue can dramatically alter the course of the negotiations and subsequently determine the level of success felt from the parties by the results achieved.
The goal of the discussion is to reach an agreement when each side receives their best-case scenario. However, this ideal state is not the usual outcome as they appear to be on conflicted sides for similar issues. It is more commonplace for the 2 parties to get acceptable portions on each topic. The best negotiators understand what they are striving for in a negotiation. They also know, more importantly, at what point the result is unacceptable for every topic. This absolute minimal point is the deal-breaker point in a discussion.
The importance of carefully considering and establishing these reservation values for each issue is that it represents the moment when a negotiated agreement will no longer be of benefit to the individual. It is then in the person’s best interest to walk away from the bargaining table. Without this critical exercise being done beforehand, emotions have a tendency to encourage individuals to agree to unfavorable points just for the sake of reaching a deal. In hindsight, this leaves them worse off than if they had not agreed.
The purpose of partaking in negotiation meetings is to be left in an improved situation afterward. Thriving practitioners do not allow emotions to force them into worse results. Instead, they use preparation and sound logic to know when to agree to disagree. Not all negotiations should end with agreements or else there will inevitably be cases of buyer’s remorse when the dust settles.
Keywords
Target: The goal each side has for the issues
Reservation point: The absolute minimum that each side will accept on an issue that will allow for an agreed upon result
Priorities: The organized list of interests based on a decreasing order of importance
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