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deal design

What is Deal Design?

When negotiators engage in thoughtful deal design, they position themselves to capitalize on the upsides of group negotiations and minimize the potential costs.

Without realizing it, we leave many of our most important decisions in negotiation up to chance. We make tacit assumptions about whether we’ll negotiate in person, what we’ll discuss, how long the negotiation will last, and so on.

This type of automatic decision making may lead to good deals, but it can prevent us from reaching great ones. By taking time to ask ourselves deliberate questions about deal design before and during our negotiation, we can set ourselves up for a more productive and rewarding agreement.

Consider the following real-world dispute where poor deal design created costly barriers. Environmentalists and farmers opposed a power company’s plans to build a dam in the Midwest. On the surface, the parties appeared to have deep, irreconcilable positions. Yet a superior deal could be designed if the parties looked past their bargaining positions to their underlying interests.

As it turned out, the farmers were worried about reduced water flow below the dam, the environmentalists were focused on the downstream habitat of the endangered whooping crane, and the power company needed new capacity and a greener image. After a costly legal stalemate, the three groups designed a better deal that included a smaller dam built on a fast track, water-flow guarantees, downstream habitat protection, and a trust fund to enhance whooping crane habitats elsewhere.

Creative deal design can help you build a foundation of trust and cooperation—and avoid conflict and chaos—in negotiations involving multiple parties and contentious issues.

To learn more about deal design, and discover how to boost your power at the bargaining table, download your FREE copy of Dealmaking: Secrets of Successful Dealmaking in Business Negotiations, from the Program on Negotiation at Harvard Law School, today.

The following items are tagged deal design:

How to Negotiate a Business Deal

Posted by & filed under Business Negotiations.

In late 2016 and early 2017, news stories abounded of companies that were having second thoughts about planned mega-mergers. Abbott Laboratories began looking for ways to exit its acquisition of Alere, citing investigations of the medical test maker, for example. And Verizon started rethinking its acquisition of Yahoo! following a data breach at the tech … Read How to Negotiate a Business Deal

Dispute Resolution: Building Momentum through Small Wins

Posted by & filed under Dealing with Difficult People.

Sometimes disputes are left to fester for years, even decades, until parties decide there is something to be gained from reaching agreement. In 2015, the nations of Bangladesh and India seized on an opportunity to push the “restart” button on a contentious border disagreement through dispute resolution. Such international conflict resolution examples can illustrate how … Read More

Negotiation in Business Without a BATNA – Is It Possible?

Posted by & filed under BATNA.

In a negotiation scenario, you always have a best alternative to a negotiated agreement. Negotiation research and negotiation strategy helps negotiators find their BATNA, leverage it at the bargaining table, and illustrates the impact that knowing your BATNA has on a negotiation. … Read More

Closing the Deal in Negotiations: A Gun-Safety Law Clears Congress

Posted by & filed under Dealmaking.

Against long odds, the U.S. Senate passed a bipartisan gun-safety bill that President Joe Biden signed into law on June 25, 2022. In the aftermath of mass shootings in Buffalo, New York; and Uvalde, Texas, 15 Republican senators were willing to make some concessions on their party’s steadfast resistance to gun-control measures. The behind-the-scenes maneuvering … Read More

Tough Negotiator: Insights on Vladimir Putin from Former U.S. Secretaries of State

Posted by & filed under International Negotiation.

How should you prepare to negotiate effectively with an exceptionally tough negotiator? That’s the question the United States and its allies have faced since Russian president Vladimir Putin sent his troops to wage war on Ukraine on February 24. The experiences and insights of five former U.S. secretaries of state who negotiated directly with Putin … Read More

For Professional Negotiators, Three Is a Magic Number

Posted by & filed under Negotiation Skills.

Everything good comes in threes, they say. For storytellers, this means understanding that readers and listeners find a sequence of three things to be memorable, satisfying, and compelling—whether it’s three bears, three little pigs, or three kings. For professional negotiators, sequences of three can be rewarding as well. The following examples of good negotiation skills … Read More

Deal Design: Strategies for Complex Dealmaking

Posted by & filed under Dealmaking.

As experienced negotiators well know, the more parties involved in a negotiation, the more difficult it often is to come to agreement, due in part to the logistical challenge of making sure each voice is heard. Yet multiparty negotiation offers considerable benefits. Most notably more opportunities for making tradeoffs and creating value in negotiation than … Read Deal Design: Strategies for Complex Dealmaking

Deal Design Guidelines: Set Yourself Up for a Better Deal

Posted by & filed under Dealmaking.

Without realizing it, we leave many of our most important decisions in negotiation up to chance. When talking to a potential negotiating partner, we may assume that we have met the best person possible to do this particular deal. We make tacit assumptions about whether we’ll negotiate in person, what we’ll discuss, how long the … Read More

Great Negotiators vs. Great Negotiations: The Program on Negotiation’s Great Negotiator Teaching Series

Posted by & filed under Negotiation Skills.

Teaching negotiation using case studies focused on the efforts of great negotiators can help achieve several pedagogical goals at the same time. Developed by Professor James Sebenius of Harvard Business School, the Program on Negotiation’s Great Negotiator case study series, available from the PON Clearinghouse, highlights the lessons learned by each recipient of PON’s Great … Read More

Learning from the Debates About the Debates

Posted by & filed under Dealmaking.

There is “nothing worse than a debate about debates,” John Podesta, the chairman of Hillary Clinton’s presidential campaign, recently said in the midst of his candidate’s heated negotiations with Democratic rival Bernie Sanders about the terms of their debates. Many who participated in these negotiations would likely agree. But the debates about debates—both on the … Read Learning from the Debates About the Debates

Conflict Management Techniques: Should You Take Your Dispute Public?

Posted by & filed under Conflict Resolution.

To turn up the heat on opponents, negotiators sometimes advertise their grievances. Here’s negotiation skills advice on when it’s a good idea to be vocal—and when to keep talks private. The decision seemed nonsensical. Early on the morning of March 7, 2010, with the Academy Awards telecast just hours away, the Walt Disney Company pulled the signal on … Read More

Hong Kong Lawyer Benny Tai Inspired by Harvard Negotiation Project Authors

Posted by & filed under Teaching Negotiation.

The Harvard Negotiation Project was recently mentioned in the Wall Street Journal by David Feith in his interview with Benny Tai, “China’s New Freedom Fighters.” Benny Tai, a 49 year old lawyer who has been branded an “enemy of the state,” founded Occupy Central with Love and Peace, a group that promotes civil disobedience in order … Read More

Capitalize on negotiator differences

Posted by & filed under Negotiation Skills.

Adapted from “What Divides You May Unite You,” by James K. Sebenius (professor, Harvard Business School), first published in the Negotiation newsletter, July 2005. Some years ago, an English property development firm had assembled most of the land outside London that it needed to build a large regional hospital. Yet a key parcel remained, and its … Read Capitalize on negotiator differences

Negotiating in three-dimensions

Posted by & filed under Daily, Negotiation Skills.

James Sebenius and David Lax, co-authors of 3D Negotiation, share their thoughts on why negotiation is a core skill for all managers in this interview with Martha Lagace, senior editor of Harvard Business School’s Working Knowledge. Offering examples of common mistakes made by negotiators, they explain how negotiators can improve their results by negotiating … Read Negotiating in three-dimensions

Gain greater leverage with sole suppliers

Posted by & filed under Business Negotiations, Daily.

Adapted from “Negotiating with Sole Suppliers,” by David Lax (managing principal, Lax Sebenius LLC), first published in the Negotiation newsletter. Negotiators often wonder how to do business with sole suppliers who know they don’t have any real outside alternative and who take advantage of this. Without the power of a realistic best alternative to a negotiated … Read Gain greater leverage with sole suppliers

Prof. Guhan Subramanian featured in Forbes India

Posted by & filed under Business Negotiations, Daily.

Professor Guhan Subramanian was featured in Forbes India in April 2010. Professor Subramanian discusses his latest book Negotiauctions: New Dealmaking Strategies for a Competitive Marketplace, which was published in February 2010. Click here to read the full article. Professor Subramanian will be teaching Advanced Negotiation: Deal Design and Implementation at the Harvard Negotiation Institute June 14-18. For … Read Prof. Guhan Subramanian featured in Forbes India

Harvard Negotiation Institute Begins!

Posted by & filed under Daily.

On the morning of June 8, 2009, hundreds of participants from around the world began their week-long intensive Basic Negotiation Workshop and Mediation Workshop.  Participants will engage with instructors Bruce Patton and Frank Sander for five days of interactive study.  There are still seats available in our 2-Day Intensive  Basic Negotiation course, which begins Thursday, … Read Harvard Negotiation Institute Begins!