What are Interests, and Why Do They Matter in Negotiations?

By Chuck Doran and Megan Winkeler

If you are interested in improving your negotiation skills, becoming a better mediator, or have been reading MWI’s Negotiation & Mediation Blog, you probably have heard a lot about interests. Loosely defined, interests are the needs, hopes, fears, and desires that drive our actions and underlie our positions in negotiation. We enter negotiations because we have interests that we’re hoping to meet or have satisfied.

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Understanding what interests are and how to utilize them in negotiation are essential skills to creating more value in negotiations. However, identifying interests is not always as easy as it sounds. We tend to express what we want in negotiations as positions or demands rather than in terms of our interests. Understanding this difference between the positions and interests is key to improving your negotiation skills.

Positions Versus Interests: Understanding the Difference Between How and Why

Let’s say a person walks up to you and says, “I want you to give me $20!” Not knowing this person, you tell him no. Or, maybe you say yes. Either way, the demand for $20 is the person’s position.

Positions are requests or demands to which you can say yes or no. In response to the person asking you for $20, you can choose to approve or deny this request. You might add other demands of your own – “I will give you $20 if you help me unload my groceries” or “I will not give you $20 unless you agree to buy me lunch next week.” The demands you add are your positions in the negotiation.

We express positions in a variety of ways, sometimes framing them as an immediate need or the only available option. To identify a statement as a position, ask yourself: can I say yes or no to this? Try it with a few examples below, which show how someone might frame their position.

  • Can I have $20?
  • I want $20.
  • I need $20.
  • Give me $20.
  • You are going to give me $20.
  • Does giving me $20 make sense?
  • From my research, you giving me $20 is the optimal solution.
  • $20 is the only right answer.
  • The best solution is $20.
  • Just end this and give me $20.

Note that you can say yes or no to all of these statements. They are all demands or requests made of you by the other person.

Of course, you can choose to respond to the demand for $20 in other ways than a simple yes or no. In fact, you probably have an innate desire learn more about why this person is asking for $20. The answer to that question – why do you want $20? – defines the person’s interests. Let’s look at some possible responses from our fictional negotiator:

  • I’m hungry, but I lost my wallet and need to buy lunch.
  • I spent all my money on scratch lottery tickets expecting it to be a good investment, and now I can’t afford to buy a bus ticket home.
  • Last week I loaned you $20, and you haven’t paid me back.
  • I’m your thirteen-year-old son who does not have a job, and I would like to go to the movies with my friends.

Each of the statements above express interests. I want to buy lunch because I’m hungry. I want to get home, and the bus is the best way I know of to do that. I want to be made whole for the money I loaned you. I want to go to the movies with my friends. None of these statements are requesting anything of you. Rather, they are telling you what motivates the other person in the negotiation.

In short: interests tell us why we are negotiating with someone. They explain what motivates us and what need we’re hoping to fulfill. Positions, on the other hand, demand or request something from our counterpart to fulfill those interests.

Identifying Interests In Negotiations

In any negotiation, there are two sets of interests to consider: your own interests and the interests of the other side. To learn more about your own interests, ask yourself why you are entering this negotiation. What is it that you really hope to gain? If you were to walk away with a deal, what would it achieve for you? What would change to make you happier or more satisfied? Why do you ultimately care about the outcome of the negotiation?

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To learn more about the other side’s interests, ask them these questions as well and inquire further about their position. Why do you want $20? Why are you asking me for $20? If I give you $20, what does it do for you? What happens if I don’t give you $20?

Once you learn more about both sides’ interests in the negotiation, you can more effectively construct deals and solutions that fulfill both of your needs, allowing everyone to leave the table feeling more satisfied with the outcome.

Utilizing Interests in Negotiations

In William Ury, Roger Fisher, and Bruce Patton’s landmark book Getting to Yes: Negotiating Agreement Without Giving In, they tell a parable highlighting the power of interest-based negotiation. A mother hears her daughter and son fighting in the kitchen, and she enters the kitchen to find the two children fighting over the last orange. The daughter yells, “I want the orange!” The sons yells, “I want the orange!” They are at an impasse.

The mother, hoping to resolve the conflict swiftly and equitably, cuts the orange in half. The daughter takes her half, peels the orange, throws away the peel, and eats the fruit. The son takes his half, peels the orange, uses the peel to zest a cake, and throws away the fruit. Both children are only half-satisfied, and half of the available value from the negotiation went into the trash.

This is an example of a positional negotiation. Each side makes demands, gives in a little, and ends up somewhere in the “middle.” The conflict may end, and the issue may be resolved, but there were missed opportunities to create more value.

In an interest-based negotiation, each child should answer the question: why do you want the orange? The daughter would reply, “I’m hungry for a juicy snack with lots of vitamin C.” The son would reply, “I need to use the peel to zest a cake.” By stepping away from their demands, they are able to come up with options for resolution they would not have thought about before. The son would take the peel, the daughter would take the fruit, and no value would be left on the table (or thrown in the trash).

By focusing on interests, we are more likely to capture the most value in a negotiated outcome than we would through positional bargaining. Moreover, interest-based negotiation allows us to improve relationships. The son and daughter in the positional bargaining negotiation yelled, fought, and walked away resenting the other. In the negotiation based on interests, even though there was only one orange to split, they were able to capture the most value and get more of what they really want from the negotiation – and enjoy a piece of delicious orange cake!

To learn more about how to utilize interests as a negotiator and mediator, check out MWI’s Negotiation & Mediation Blog:

You can also contact Chuck Doran, MWI’s Executive Director, at 617-895-4026 or cdoran@mwi.org for more information.

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