College Athletic Administrators Learn the Art of Negotiation
Andrew Harris and John Lowry
If you follow the college sports headlines (and who doesn't?), you find evidence of successful negotiations everywhere: "Head Men's Basketball Coach Ben Howland and UCLA Agree on New Contract"; "Under Armour and University of Utah Announce Official Outfitter Agreement for Ute Football"; "University of Oregon Athletic Department Agrees to Multimedia Rights Extension." Of these types of high-stakes negotiations, everyone agrees — a key to the success of an athletic administrator is his or her ability to negotiate.
"Negotiation is a crucially important skill for athletic directors," says Dave Mullins, director of athletics at East Tennessee State University. "Especially in today's business market, understanding the negotiation process is essential to creating good outcomes."
While there are many dimensions of negotiation in the context of collegiate athletics, the role of power is pivotal. Whether negotiating with an athletic apparel company over an outfitter agreement, with a student government over the ticket allotment for the upcoming football season or with the city council to gain approval of construction of new facilities, an athletic administrator's understanding and use of power is critical to eventual success.
Negotiating power can be simply defined as the ability to influence the other side. People can be swayed and affected physically, psychologically, socially and analytically, and powerful negotiators seek to increase power in each of these areas.
According to negotiation experts, your power in a negotiation comes from six primary sources within your control: your negotiation skills, your knowledge of the subject matter being negotiated, the relationship you cultivate with the other side, your ability to create options within the negotiating framework, your ability to accept possible outside alternatives to a negotiated agreement, and the power inherent to the institution you represent. Each of these sources of power is a vehicle for influencing the other side and is at play in almost every business negotiation. That said, administrators also must look at each negotiation from the perspective of the other side. Anticipating the other side's negotiating power will assist in accurately analyzing one's own position.
To a large extent, negotiating power is based upon perception. Negotiators make decisions based on their own strengths and weaknesses compared to the other side. However, negotiation takes place in the face of uncertainty. Negotiators rarely know the "bottom line" of the other party or how much the other party really needs the deal. Powerful negotiators strategically manage perceptions by carefully communicating with the other party and testing their perception of the other party's negotiating power.
The most common mistake made by negotiators is being fooled into thinking that they have enough power to get a good deal. Powerful negotiators acknowledge the areas in which their power is limited and strategically seek to increase their negotiating power in other areas. Attorney David Williams, who oversees the department of athletics at Vanderbilt University through his position as vice chancellor for university affairs, counsels athletics administrators to "know where your weaknesses are" in every negotiation, adding, "Do your homework. The key to increasing power is to find out what the other side needs or wants that you can give them."
The following are six ways to increase your negotiating power.
1. Improve negotiation skills.
More skillful negotiators are more powerful negotiators. Athletics administrators negotiate almost every day, yet few have undergone any formal negotiation training. As little as a few days dedicated to improving negotiation skills can make you a more powerful negotiator. "Some negotiation skills are intuitive; however, many strategic techniques must be learned if maximum success is to be achieved," says Lipscomb University president Randy Lowry, who has trained more than 40,000 professionals in strategic negotiation skills over the past 20 years. "If athletics administrators take some time to understand the negotiation process and learn about each strategic decision that must be made within that process, they will become much more effective for their respective institutions."
2. Prepare relentlessly.
The popular saying, "Knowledge is power," is true in the context of negotiation. The more information you gather about the substance of an upcoming negotiation and the parties involved, the easier strategy development and decision-making will be. Acquiring such information is accomplished both directly and indirectly. For example, when preparing to negotiate a contract with a marketing firm, athletics administrators should ask the firm to provide detailed information on its staff, level of experience, clientele and proposed services. Further, they should consult with the firm's other clients to inquire about the firm's values and its negotiating strategy and tactics. Finally, they may want to consult an independent third party to learn about the substance of the product or services being proposed by the firm. All of this information can increase athletics administrators' leverage with the marketing firm and provide opportunities to work collaboratively with the firm on developing the contract.
3. Build a relationship.
Trust is what gives negotiators a foundation on which they can work collaboratively. Communication is the process used by negotiators to engage each other and share information. Both are essential to discovering the interests that drive a party to take a certain position in a negotiation. Powerful negotiators seek to respond to the other party's interests as opposed to simply responding to the other party's position.
4. Develop alternatives for yourself.
Often, the person who cares the least about the deal has the most power. By developing alternatives to a negotiated agreement, your need for the deal decreases and your power increases. The formula is quite simple. You should accept an offer only if it is better than your alternatives. The better your alternatives, the more demanding of the other party you can be.
5. Invent options.
The more you are able to invent creative options that satisfy your needs and the needs of the other side, the more powerful you will be in negotiations. Creating interest-based options is the key to overcoming impasse and reaching an agreement. In many negotiations, the parties' positions will conflict, but their interests will not. By using interests to develop options, powerful negotiators can move parties off of their strongly held positions and engage them in a collaborative problem-solving approach.
6. Selectively share information.
Information is a valuable resource that almost always favors one party in a negotiation. Powerful negotiators recognize the impact of information on the negotiation process, guard it carefully and use it when they will receive the most value for it. Deciding if, when and how to share information with the other side is a key part of negotiating strategy. Consider a settlement negotiation between an athletic department and a former staff person who has brought a wrongful-termination claim. If your attorney advises you that your legal position is strong, sharing such information with the other party will increase your power in the settlement process. If your attorney advises you that you are legally exposed, you can seek to maintain negotiating power by avoiding a discussion of your legal position and sharing other information that supports your position.
The tension between whether to negotiate competitively or cooperatively is present in every negotiation, at every stage. Negotiating power is a critical factor in determining which strategy to employ. Negotiators compete to get the absolute best deal, but reaching a negotiated agreement almost always requires some level of cooperation.
"Athletics administrators especially need to be mindful of the tension between competition and cooperation," says Peter Robinson, managing director of the Straus Institute for Dispute Resolution at Pepperdine University School of Law. "Most negotiators make the mistake of relying on instinct and intuition. Athletics administrators might have a tendency to exercise their competitive personality. Making a conscious choice to be strategically cooperative in a given negotiation may be the most important move, especially if the athletics administrator is negotiating with someone within his or her own athletic department."
Choosing the right path in a negotiation is heavily situational. Consider the following three scenarios.
• A university athletic department and a local contractor are negotiating over the construction of a new baseball stadium. Typically, numerous contractors will bid on the project, meaning competition for the work is great. In such a negotiation, the athletic department has good alternatives to a negotiated agreement with the contractor. The athletic department has considerable power and can be more competitive in the negotiation.
Nevertheless, the opportunity for the athletic department to increase negotiating power still exists. The athletic department can negotiate with other contractors to increase the quality of its alternatives. It can also invent options that satisfy the interests of both parties. For example, the athletic department could provide prime advertising space in its facilities in exchange for a substantially reduced bid on the stadium construction. This creative option satisfies the contractor's interest in increasing its profile and generating business, while satisfying the athletic department's interest in constructing a new stadium on a limited budget.
• A major university athletic department and a legendary basketball coach are involved in an intense negotiation of his new contract. In such a negotiation, the athletic department does not have good alternatives to a negotiated agreement. Failing to reach an agreement with this coach would be detrimental to the basketball program. Therefore, the athletic department has limited power and should work to increase its power and negotiate more cooperatively.
The athletic department can increase its power through the strategic presentation of its proposed compensation package. If the proposed compensation package is competitive with the compensation paid to other coaches at similar universities, it should include comprehensive information to that effect. Negotiating power is increased if a party can show that its offer is reasonable based on objective criteria and agreed-upon standards. The athletic department can also increase its power by developing ways to enhance the longstanding relationship between the coach and the athletic department. For example, the athletic department could announce plans to recognize the basketball coach's past achievements in a public way.
• An athletic department and a group of its neighbors are negotiating over the expansion of athletic facilities, and a hearing before the city planning commission is a couple of weeks away. In such a negotiation, the athletic department may have the political capital to obtain approval from the commission despite the objections of its neighbors. However, the university has a number of other more significant projects on the horizon and may not want to use its political capital over these athletic facilities.
The athletic department can increase its negotiating power by exploring the underlying interests that are driving the neighbors to oppose the expansion. Perhaps the neighbors are concerned about property values and the changing landscape of the neighborhood caused by the growth of the university. The university certainly does not want its surrounding neighborhood to decline. Therefore, while the positions of the university and its neighbors clash, the interests do not. If the athletic department is able to creatively find a way to satisfy the interests of the neighbors, it will increase its negotiating power significantly. For example, the athletic department could create a membership program exclusively available to people who live within a couple of miles of the university, which enables the neighbors to access workout facilities and practice fields. Or, the athletic department could offer the neighbors reduced season-ticket prices and designate a prime location for the neighbors to gather and tailgate during major athletic events. Each of these creative solutions could add value to the neighbors' property, and might just transform them into the most vocal supporters of the athletic department's expansion plans.
As these examples show, your negotiating strategy will be impacted both by the knowledge you bring to the table and by the knowledge you ascertain once you look across the table at the other party.
"Negotiators who understand the process and can exercise competent skills achieve better outcomes," says Larry Bridgesmith, executive director of the Institute for Conflict Management at Lipscomb University. "By developing a multitiered approach to negotiation that seeks to satisfy the expressed desires and the unexpressed needs of the other party, strategic negotiators exert determinative influence on the process."
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