25 Sep The art of negotiation
How would your life be different if you were a more effective negotiator?
How would your business be more profitable if you negotiated like a professional?
Have you ever felt like the underdog in a negotiation? Going into negotiation with someone who you believe holds more power than you, can be a daunting prospect. Whether you are asking your boss for further opportunities to develop your career: or attempting to win a major business deal, your approach to the negotiation can dramatically affect your chances of success.
Various business professionals claim, “that there is often strength in weakness”. Having the upper hand in a negotiation, typically reduces a person’s ability to understand how others think, see and feel. Allowing the person in the less powerful position to have a better vantage to accurately assess what the other party wants and how you can best deliver it. And after doing your homework, you will often find that you have underestimated your own power and overestimated theirs.
When you go into a negotiation, there are strategies you can adopt to ensure a better chance for success.
Have faith in yourself
It is human nature to be fearful of the unknown and worry about the threat of the competition. Worrying that there is a better person for the job; or that someone will get a deal with a key client, so as a result we lower our demands. By doing some investigation, will allow you assess whether those concerns are real and consider what skills and expertise you bring to the table, that others can not. After all, your power and influence come from your unique properties.
Understand your goals and theirs
Make a list of what you want from the negotiation and why. This exercise will help to determine what would cause you to walk away, allowing you to build your strategy within acceptable terms.
Equally, if not more crucial, is to understand what is important to the other party. By studying your counterpart’s motivations, obstacles and goals, you can start to form individual statements connected to their reasoning. These can be gained from observations of physical actions, body language, or predicable responses to the circumstances at hand – all allowing you to frame your aims not as things they are giving up to you, but as solutions to the problem they have.
There is always more to be learned throughout a negotiation, as people are likely to come to the table for more reasons than appear on the surface – even though financial gain may seem like the major motivator, it could be ego or pride driving their behaviours. Have you ever noticed how – at least sometimes – a satisfied ego makes you feel better than a satisfied bank account?
Never split the difference
There comes a point in every negotiator’s career when the other side presents an ultimatum. Take it or leave it!
On the surface, this might look like they are trying to back you in to a corner and force you to decide, in reality it is a sign that your counterpart is trying to make a deal. The other side would not propose a take it or leave it offer if they have already made up their mind to walk away.
Preparation is key
One of the most important aspects is to be well prepared. That involves brainstorming in advance and having creative solutions up your sleeve for both parties. For example, if the other party won’t budge from their price point, one of your proposals could be a longer term contract that gives the other party a price they would like, but guarantees you a revenue for a longer period of time. You also want to have data or past precedents at your disposal to help you make your case. For instance, should a potential client say that they will pay you X for a certain job, having done your research allows you to counter with – but the last 3 people you contracted who had similar experience were paid Y. Preparation gives you the information you need to help you get more of what you want.
Listen and ask questions
Two of the most powerful strategies you can deploy are to listen well, which builds trust and pose questions that encourage the other party to defend or elaborate on their position. If they can not defend their position with rationale, then you have shifted the power a little. For example, should your boss advise that they do not think you are the right addition to a new project – you could ask what would that person would look like? Armed with that information, you can then show that you have those attributes, or at least the potential to be that person.
Do not let raw emotion rule
One of the biggest mistakes a less powerful person can do in a negotiation is get reactive or take the other person’s view personally. Try not to mirror negative behaviour, by retaliating to a threat, with another threat, as neither party will get anywhere. Instead keep your side of the discussion focused on results and resist the temptation to confuse yourself with the issue at hand, even if the negotiations involve assigning value to you or your product. Focus on what your goals are and direct your strategy to that, rather than the other party’s behaviour.
The best negotiators have prepared enough that they understand the whole picture, rather than one single outcome. By not being limited to a single strategy of gives and gets, but multi-manoeuvres as the negotiation progresses. If the other party makes a demand, ask them to explain their rationale. Suggest taking a few minutes to brainstorm additional solutions or inquire if they have ever been granted the terms they are demanding. Maintaining flexibility in your moves means that you can shape a solution that is not only good for you, but also makes them feel that the other party has won.
Principles to remember
Be more curious and put yourself in their shoes – look at the negotiation from your counterparts view and be curious about their strategy, alternatives and target goal. Think about what a great deal looks like from their perspective.
Ask questions – and then be quiet! Count to ten. Bite your lip if you must. Just be quiet. We are naturally uncomfortable with silence. Someone will fill the void with information. Let your counterpart talk and you will get valuable insight into their motivations and interests.
Know your alternatives – document and fully understand your alternatives. What happens if you do not come to an agreement? Never close a deal that is worse than one of your alternatives. It is surprising how often people get caught up in the emotion and overlook a better alternative.
So, when your next negotiation strikes negotiate like a professional. Be curious, ask clarifying questions and then just listen. Make sure you know your alternatives and never agree to a deal that is worth less than one of your alternatives. If you follow these negotiation tips, even if you considered yourself as the underdog in a negotiation you will come out heads and tails ahead.