International Negotiation: Using the MID™ to Cut Confusion
“We must have a 10-day shipment guarantee.”
“This functionality is a must.”
“A price reduction is mandatory.”
How often have you heard conditions like these during a negotiation? Sometimes negotiators make every request sound as if it were mandatory. But what are the real deal-breakers? K&R’s MID™ is designed to help you identify and prioritize the issues in any negotiation. Using the MID, you can separate and deal with the truly mandatory goals (or ends) while reducing conflict over issues that may not be mandatory. The MID approach makes deals easier to close.
Means are alternate ways of accomplishing goals. The ends are the goals. Unfortunately, many people naturally talk in terms of means; they articulate the easiest way of getting what they need. This can cause negotiations to get bogged down, especially if most requests are stated as if they were mandatory.
Consider this example: Somebody says to you, “I need a glass of water.” They may say this instead of, “I’m thirsty. What do you have to drink?” What if you don’t have water? If they simply requested water, you can’t satisfy their specific request. But if you knew they were thirsty, you might have all kinds of beverages that solve the problem. In simple, real-life situations like this, we naturally make a response which tests the “need” statement. “I don’t have any water. How about some seltzer?” Eventually, one of three outcomes will happen:
- We find an acceptable alternative (water, seltzer, wine, etc.) that we can provide.
- We discover a different need that was not expressed (“I need to water my plants.”) and begin the alternatives search to find a solution that we can provide.
- We discover the need, and we find out we can’t solve it with any means we have available (a deal breaker).
Separating the means from the ends is crucial to reaching agreements in negotiating. The beginning of this process is where you need the MID.
|Mandatory Value||Important Value||Desirable value|
MID stands for the three main types of requests: Mandatory, Important, and Desirable. Where value can be quantified, figures (even if they’re estimates) should be included for each MID item listed. Otherwise, a “Q” can indicate qualitative value.
- Mandatory requests should be the true goals (or ends) that must be achieved by either side for the deal to work. These are the true deal breakers. Usually only ends are mandatory, although if there is only one way to accomplish the ends, means could be mandatory, as well.
- Important requests are goals or favored means that matter a great deal to the other side or to you—however, the success or failure of the deal is not likely to depend on them. They can be negotiated for other equal or more important concessions.
- Desirable requests are items on either side’s wish list but they have the lowest priority. Because the value of desirable items is not the same to each side, they can often be used as bargaining chips to be traded for something of greater importance to you.
- Conflicting requests are items that are in direct conflict. The simplest example is price: If a customer can’t pay more than $20 for an item and a seller can’t sell it for less than $22 (that is, both price limits are mandatory), then there is a conflict. If you go through a means vs. ends analysis, such as we illustrated with the water/seltzer case above, then mandatory items with conflicts will be deal breakers.
Sorting all requests into proper categories is critical. Doing this enables you to do a better job of meeting each side’s needs, because you can analyze and distinguish between the way people do business (means) and the goals they must achieve (ends). Over time, the entries in the MID will encourage communication to resolve identified conflicts into common ends with acceptable alternative means to both sides.
For every request made by the other side (especially conflicting requests) there are two important questions to ask yourself as you start to separate means from ends.
- Why is this request being made?
- What problem are we trying to solve?
Employing patience and listening, we can help distinguish between means and ends—and defuse problems which might spoil an otherwise good deal.
Using the MID chart effectively is a four-step process:
List the positions of the sides. Be as complete as possible. Remember that “Terms Cost Money,” and there will be interactions between the positions. Don’t try to resolve them yet.
The classification as “Mandatory/Important/Desirable” is your best judgment. It isn’t a science. Bear in mind that as the negotiation progresses, better information may lead you to reclassify – that’s fine.
Look for conflicting positions and identify whether they are “means” or “ends.” For “means,” look for alternative solutions that may work for both sides. When you do this, remember to look at both of the conflicting positions—you may have also stated your position as a means. Don’t overlook alternatives you may have as part of the process. For “ends” that conflict, if they aren’t both mandatory, a solution is still available.
All positions on the MID have a value—try to assign a value to each, marking “Q” for qualitative if you cannot assign a figure. It’s OK if some of these values are estimates.
It is important to remember that each side may view value differently. When you identify something that is very valuable to the other side, it will give you leverage in the negotiation—even if that item is not expensive to you.
Remember that “terms cost money”? Sometimes it is hard, but terms can be converted from their original statement to a financial impact statement. “3 years of price protection” has a value to a buyer, and a cost to a seller. Since you are going to be making value tradeoffs, you need a common metric, and money is often (but not always) the one used.
Not all deals can be made—or should be made. The MID analysis forces you to figure out what problem you are really trying to solve. If there are no mandatory conflicts, the deal should get done.