To become an effective negotiator requires constant practice in “negotiation thinking”. It is a daily discipline, not an ability that can be left dormant in normal times and tapped at will in an emergency. Nor is there such a thing as a line of ready-made, packaged negotiation strategies waiting to be picked off the supermarket shelf.
Negotiation is simply the logical extension of one’s usual communication process. Done well, it derives from long-term philosophy, not short-term expediencies. In a very real sense, it represents the expression of an attitude about one’s life.
_____Paraphrased from The Mind of the Strategist
(1982) by Kenichi Ohmae
If you think about it, we use negotiation in various ways almost every day, from conflict resolution and dealing with customers or vendors, to attempting lower your cable bill or buying a house. Just remember that basic principles of negotiation are the same and that even the most skilled and experienced negotiators will feel discomfort when negotiating. The only difference is a skilled negotiator has learned to recognize, and suppress, the outward signs of these feelings.
The first thing you need to ask yourself is what are you worth? What do you bring to the table? Is what you have hard to come by, or is it a dime a dozen? Does the other side need you more than you need them? If what you have is rare or noteworthy, you have the better bargaining position. That’s called leverage. If, however, you need the other side more than they need you, ask yourself how can you give yourself an edge.
Prepare, prepare, prepare! I cannot emphasize this step enough. Work the process. There are often many possible deals. Do not be too satisfied just because you found one of them. Look to find all the possible scenarios in case the first one cannot be negotiated.
Understanding the people you are negotiating with is also a big part of the process. Personality and ethics matter. A lot depends on who is negotiating. If you can, get beyond positions and think about interests to help frame your argument. Before going into a negotiation, research the other party and try to have an understanding about what is important to them and why they are interested in making the deal. Also try to discover what is important to the negotiator outside the realm of the topic being negotiated. Where do they live? Does the other party have a family? Do they like sports? Find some commonality.
Research is the key. Before beginning negotiations, do your homework. Be ready to justify your numbers- know the historic or current values and be ready to quantify your numbers and explain how you arrived at them. Conversely, when you receive an offer, ask your opponent to justify their numbers in return.
Listening is a fairly underrated skill in today’s world. I stress the importance of listening because it will do two things: it will cause the other party to feel respected and it will build trust between the two parties. Listening entails making sure what you’ve heard is actually correct.
“Pigs get fat, hogs get eaten.”
Negotiations should be a win-win for both sides. When one party is unreasonable the negotiation process becomes stalled and with a good chance that it will end with a no-deal. A wise negotiator will always strive to convince his opponent that he understands their position and is working to make a fair deal for both sides.
Leverage: “Every reason that the other side wants or needs an agreement is your leverage—provided you know those reasons. __ Bob Woolf, Friendly Persuasion (1990)
Leverage is your ability to get things on you own terms. The party who thinks they have the most to lose from a “no deal” has the least leverage. The party who thinks they have the least to lose from a “no deal” has the most leverage. Leverage is all about perception- it depends on what people think and believe, not on what is. Leverage is very dynamic and changes moment to moment as new information comes to light. Remember that there is a time to say nothing and a time to say something, but there is never a time to say everything.
Lastly, a good negotiator will not be afraid to walk away. If you want to win you must have three levels set in advance. Your opening offer, your target price and your lowest price you can live with. Not knowing your break-even point can leave you accepting a deal that is not in your best interest.
While there is so much more to learning the skill of negotiations I believe I have touched on some of the key points. If you practice negotiation thinking the outcomes of your negotiations will be in your favor.