Negotiation.
The Art of Winning.

There are plenty of books on negotiation. It’s certainly not an exact science. Some styles of negotiation are suited for buying a used Toyota while some are meant for union contracts and who gets to keep the house.

This section is meant for negotiating in the course of business. Ok, let’s move on.

The most common forms of negotiating fall into two categories: Hard & Soft. With the hard style, you stand by your position and you & your opponent go through a tug-of-war. You’re constantly making decisions on what to accept and what to give up.

A process such as this becomes tedious and either side may resort to stonewalling, personal attacks or walking out. There’s a good possibility that no deal will be struck at all and a relationship will be damaged. These negotiations are stressful and costly.

A soft style of negotiating begins with the best of intentions. One or both parties may realize that preserving the relationship is more important than the agreement itself. In this case, either party goes out of their way to make something happen. Good friends or family members may settle agreements this way.

There is one problem. Any negotiation that puts the relationship above solving the issue risks a weak agreement. You may realize you gave too much away in the name of friendship…..or one of the parties takes a hard stance and the soft negotiator becomes vulnerable.

Before you hit the tables you must ground yourself. You do that by asking three questions.

• What do we want?: This questions seems simple but its not. Off the top you may think you want a cheaper price or return of damaged goods. You can’t start the process with such a broad premise.

Many issues are the sum of its parts. You need to understand which of those parts are most important because separately, they may become negotiation points. Are your supplier’s freight charges too high? Let’s understand everything that surrounds this issue. Can the shipment be sent somewhere else, will you accept a slower delivery time, if you agree to order more, can the charges be dropped.

Understand what you want and what you can work with. Know the components that make up your demand. Which ones can you part with and which ones you won't.

• Why should they negotiate with you?: People will not negotiate with you unless they believe you can help them or hurt them. Understand the other party’s point of view.

Determine their needs so you’ll how you can help them or hurt them. If you haven’t figured out this part of the strategy, you won’t be taken seriously.

• Got alternatives?: By alternatives I mean, if the negotiation fails, what is your option. It means knowing right from the start that you have an alternative choice if this deal doesn’t work out.

This other choice is called BATNA (Best Alternative To A Negotiated Agreement). We’ll talk more about that later on. BATNA has a powerful psychological effect. It’s like going on a job interview knowing another company just made you an offer. It gives you confidence.

Depending on who you’re negotiating with, almost anything can happen. The style listed below is based on the Harvard Negotiation Project. This is negotiating on principles and merits.

We’re not going to throw coffee across the room or slam the table. Our strategy is based on four merits:

• Attack the problem: People don’t communicate very well. If you have an ego to defend….reaching an agreement can become that much tougher. Make it your point to focus on the problem.

Don’t attack the other side.

• What are their interests: If one party says you can only buy a minimum of 10,000 units….and you want 5,000 units, find out why. Before you haggle over quantity, inquire. Maybe it’s a production issue. Maybe it has to do with cost-effective shipping.

By asking, you might be able to find a work-around. Or discover there won’t be.

• Solution time: Having to make decisions on the fly while your adversary is staring you down is hard. When someone demands an answer “right now”, the possibility of a creative solution is shot.

Set aside a designated time that is just for hammering out possibilities. This way both parties are on the same page when it comes to settling differences.

• A standard: If the other party claims its their way or no way….you have some options. You can walk away. Or, suggest that an objective criteria be used. An independent source not related to either side’s desires is that standard. This could be a market value, expert opinion, law or some other comparable benchmark.

This is negotiating in the perfect world. If the other side uses unfair tactics or has the more powerful position, try to get back to a principled process.

While the negotiation is taking place it helps to stick to a rulebook. Here are three actions to keep you in control:

• Ask questions : Questions help you obtain information on your opponent’s thinking. Ask question first. It’ll make things easier for you later. When you inquire, the other party must respond to you; thereby you’re in control.

Questions also help diffuse direct disagreements.

• Validate & understand : Test your understanding of the issue brought forth. Summarize it and repeat back. This helps in two ways. You’ve confirmed you know what they’re talking about…..and the other party feels heard.

• Explain before you disagree : Don’t like what you just heard? Explain your position and why their opinion conflicts with yours. It allows you to present your side and your logic. Then they’ll understand why you’re disagreeing. It works better then just yelling, “no”.

• If they won’t budge : If the other party forcefully pushes their opinion, don’t attack it. Treat it as an option. Discuss ways to improve it. Discuss hypothetically what would happen if you were to accept it. Help them understand your situation.

• They attack your position : Don’t defend your position. Ask the other side what’s wrong with it. By listening to their negative judgments you can uncover underlying interests. Ask them what they would do in your position. Now, they must confront the problem from your angle.

During a stalemate, ask questions instead of statements. Questions generate answers while statements cause resistance. And just as important, questions confront the problem and educate.

If you ask a legitimate question and receive an unsatisfactory answer…..use silence. As in, just stare and take a sip of water. The other side may feel obligated to answer in more detail. When the other side has doubts on what they just said, your silence will work wonders.

Bottom line: Know your issues and what you can accept. Knowing how you can hurt or help the other party is the basis of negotiating.

And for peace of mind, walk softly and carry a big BATNA.

Go From Negotiation To Business Strategy

Go From Negotiation To Home Page