The 5 Words that Make for Effective Negotiations
Negotiating: Where two people from different positions try to reach an agreement.
It’s a simple concept but often comes with complex issues and can end up with huge cost. The art of negotiating is something that Sales people (should be) extensively trained in, but what about other people in your organisation?
Negotiation is not always about sales.
A recent YouGov survey presents us as a nation that does not particularly understand, value, prioritise or exercise good negotiation skills. The sample of 1,000 companies is representative of the UK as a whole, with approximately 750 of those classified as small and medium-sized enterprises.
Almost half of respondents always, or largely, act on impulse when negotiating rather than thinking about the deal in advance. They adopt a one-size-fits-all approach rather than tailoring their approach to specific persons or situations.
Expressing needs, wants and flexibility to reach an agreement is the name of the game when looking at what you want to achieve.
Before you go rolling into a negation, consider...
- What are you trying to achieve? What is at stake?
- How much do you know about the other person and what they might want?
- How much are you willing to compromise? And what would be the repercussions?
- Do you know all your variables? Have you got all your costs, timescales etc in your head and are they rock solid?
- What is your main objective? Are you prepared to drop others?
There are many types of negotiation, some of them good, some of them bad… Here are two good practices that you should deliberate…
Fisher and Ury identified in The Harvard Negotiation Project a model that aims to “produce wise outcomes efficiently and amicably”. It finds a different path by being hard on the problem and soft of the people through 4 key principles:
- People - If people separate themselves from the problem they can work together to solve the problem as opposed to trying to score points and win the negotiation over the other person. Removing the relationship and focusing on the underlying problem is key to achieving a negotiation that will work for both parties.
- Interests - Looking for shared interests that you can share and agree, as opposed to the other party’s position in the negotiation, will be far more advantageous and shows attention to their concerns and their desires.
- Options – Coming up with a variety of options between both of you in the negotiation will often open up opportunities that maybe you wouldn’t have seen if you did it separately. Its these types of compromises that can really bond each party and move things forward.
- Criteria – Remove personal preference and have a bench marked standard for making decisions, it can make the deal fairer for all involved. This could be company policies, international standards, average prices, cross board standards or previous outcomes etc.
I’m sure you will have heard of a ‘win/win situation’ and maybe sometimes, it can be a cliché, however, there is a reason why this is so openly talked about. Making a deal feel like no one has lost, at the end of the day, is a great deal. These steps describe a typical way of achieving this:
- You are professional people trying to reach a common solution. One of you has a problem, maybe the other has the answer.
- Identify the common ground you both agree on…
- Keeping your cool by being composed, pleasant and controlling your behavior is key to a successful deal. I once read a great quote “Blowing your stack rarely leads to success” – this sentence has never been more true as it is in this situation!
- Do not make proposals until you are all clear about what it is that you want to achieve. Premature solutions often do not reach the desired results so setting realistic timescales and being cautious in your proposals tends to mitigate this problem.
- Keeping the entire experience positive will help to maintain a constructive environment. If you are experiencing rejection of a proposal or you are the one declining an offer, try to fall back common ground and mutual benefits.
These are some really simple strategies which can have a big impact on how the negotiation is will unfold and to your favour.
- Establish good faith and solve the smaller issues first
- Gauge the other person’s responsiveness and trial their willingness by asking for something minor and seeing how they react.
- Try and let the other side make the first offer. If you give away your position first, its is normally from this point that it erodes.
- Suggest splitting the difference. By doing this twice the right way round you will end up with 75% of the difference
- If you are in a stale mate, suggest a colleague to take over. Often personal style gets in the way of reaching an agreement.
- A bit of a mind trick, but getting the opposition used to saying ‘yes’ and putting them in that mentality could be the difference in getting what you want.
- Visualise the successful outcome before you go into negotiation. Once you have this in your head, you will know what you are aiming for and what it looks like.
Dealing with Dirty Tactics
I’m sure you will/have experienced dirty tricks and underhand tactics at some point, I know I have. Lying, misleading or bullying can pose quite a disruptive way for someone to force the situation their way. Your best way to deal with someone like this is to take an open, honest stance which addresses the problem, rather than ignoring it.
Do not become a victim.
Once you have reconised it, raised the issue explicitly with the person and question the use of the tactic during the negotiation – this often will diffuse the situation. It lets them know that you aren’t phased by what they are doing and that in fact you are here for business.
So what did you want to achieve when closing?
An effective close should:
- Summerise what has been agreed
- Leave them wanting to do business with you again
- Quickly and concisely end
People buy from people. There’s a lot of reasons to suggest that a lot of people do business with people they like, people who brighten their day so if you remain principled in your approach and come across in a pleasant way and not ramble on once you have reached an agreement then you will have a very good chance of demonstrating a positive negotiation.
Some closing strategies:
- Assume that the other party has agreed with your proposed solution. Start talking about the ‘whens’ and ‘hows’ of it happening, rather than if its going to happen. (Sometimes this might not be entirely ethical, but might be appropriate if the other side looks incapable of reaching a decision.)
- Be direct. “The very best I can do for you is…” by putting sentences or your proposal in direct questions/statements and waiting for a response, it could really help the conversation move forward to a conclusion.
- Summarise the benefits of what you are offering. Benefits and the solutions are the reasons people and business negotiate to get the desired results. This sounds really obvious, but when focusing on the end result and not on the actual work/product/service then its easier for them to draw a conclusion in your favour.
- Offer a temporary or trail solutions. A low risk option with a get out clause might be what they need to tip them over the edge if they had any concerns.
- Offer choices. “Either/Or” if a great way to point out choices. Be careful however, you don’t want to offer too many choices otherwise it might confuse the whole situation.
The 5 Words for Effective Negotiation
Sometimes the fundamental issues with negotiations revolve around the mistake of assuming that others know what we want/need. If we follow a principled negotiation tactics which requires us to really understand the other party’s interests and make the requirements really clear, then effective negotiation can be summarised in five words: