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Just by the name, you can already get an idea of the quality of this technique, right? But what is the Harvard Method and how can you put it into practice?
First of all, the best starting point is to know why you need to understand about trading. Broker.cex.io will guide you to know about it.
And each trading is unique: they are different people, in different contexts, with goals that are often opposite. Therefore, it is not possible to treat everything as a pattern, but it is possible to apply some techniques to facilitate the process.
One of the best-known methodologies is the Harvard Method, explained in the book ” How to get to the yes “, by Roger Fisher, William Ury, and Bruce Patton, first published in 1981. This concept starts from the premise that the principles must be the basis of trading and negotiators should focus on objective criteria and solutions that benefit both parties involved.
A new way of negotiating
Most of the time, the trading is related to a game with a winning side and a losing side, but the Harvard Method disregards this possibility. At the end of the agreement, everyone involved ends up satisfied with whatever is decided. Makes sense, right?
This strategy ensures that, in addition to reaching short-term goals, negotiators will be able to maintain a good long-term relationship as well, facilitating future trading.
Thinking about options that please both sides is a way to avoid conflict during and after the trading. It is about facilitating the process with logical decisions that make it more fair and objective.
What is the Harvard Method
The Harvard method of trading was developed by William Ury and Roger Fisher for the university’s trading program. The central proposal of this methodology is that all parties involved in the trading benefit, unlike traditional models that propose that one party has an advantage over the other.
The method suggests that the sides involved in the trading perceive themselves as allies, not opponents. This understanding contributes to a more collaborative relationship, and this makes the resolution of possible conflicts easier, which leads to a positive result for everyone.
4 fundamental points of the Harvard Method
To put this technique into practice and reach more often, there are 4 decisive factors in the process: people, interests, options, and criteria.
When negotiating, these 4 points must be considered to guarantee a more effective and successful trading.
So take a look at what each one means for the Harvard Method:
1) People
Know how to separate people from the problem in question to see the situation with empathy and understand the emotions of the other party.
Do not maintain a rigid position when negotiating, this can cause unnecessary tension and harm the trading for both sides. Know how to avoid or resolve deadlocks that may arise in the best possible way.
One option is to be transparent about what you like or dislike about the agreement, be open to listening to others’ opinions, and be flexible as much as possible.
2) Interests
In trading, the result you want to achieve is interesting. Also, for each interest, there are some positions, which are the decision making in favor of the interest.
Never take the “I’m always right” position. You must always remember that if you are negotiating with someone who has an opinion different from yours, that person certainly has strong personal reasons for preferring this option. Try to understand and dialogue in search of a favorable result for both.
Identify the factors that motivate decisions and argue about them in a friendly way. Ask why that preference or attitude and also explain the legitimacy of your position but always using non-violent communication.
3) Options
One of the biggest problems that cause deadlocks in tradings is the lack of options.
Imagine the situation: you enter the trading with a single defined position, the other person asks you about your options to offer and you find yourself lost. Your credibility is gone and the trading is already undermined.
Negotiating is also about making the right proposals at the right time, so be prepared. Plan yourself by stipulating the space where you can search for your options. Is there a spending limit? What is your maximum term? In the case of defending an idea, how much of your initial plan can be changed without harming its essence? Know the terrain where you are walking.
That done, you will be more prepared when it comes to negotiating. If the agreement cannot follow the path you expected, remember all possible alternatives within your stipulated limit. Look for creative solutions and make suggestions that are beneficial to both parties involved.
4) Criteria
To use the Harvard method, it is essential to define objective criteria for your trading. An extremely damaging factor in tradings is the feeling of disadvantage or injustice.
When one of the people involved feels that she will lose out in the trading, she closes and does not accept the agreement. Therefore, use clear, objective, and impartial criteria to argue without leaving any misunderstandings.
