Negotiating
Research both sides
Build trust
Understand needs
Decide a starting point
Ask questions and document responses
Bring up every issue
Accept friction
1) Research both sides.
Discover all possible information relevant to the negotiation in advance. Specifically look for interests, experience, and precedents. This enables negotiators get straight to the most important points. A helpful exercise can be to list all possible areas of value and rank them for both sides. Then find objective support for your negotiation. External benchmarks, such as comparable price points or industry standards, can lend support to your point of view and help to understand theirs.
2) Build trust.
The negotiation will be able to go much more smoothly if you're predictable, warm and competent. There is never any need to be combative. For example, rather than saying no, just neutralise a request with a demand of your own. The process of a negotiation is very much part of the product. So demonstrate empathy and meet face to face where possible. If doubts or fears are hard to eliminate contingency contracts can be useful. The long term benefits can often outweigh that of the immediate negotiation. So make sure the other side walk away, and remain, satisfied.
3) Understand needs.
This is important well beyond the surface terms of the deal. You need to understand objective value for both sides. That starts with coming to terms with your own fears and desires. Personal biases cloud judgement which impedes value assessment. It is important to neutralise them. Then to work out your partner's best and worst outcomes. Where this range overlaps with your own is the zone of possible agreement. Your job is to first make it as big as possible and then take as much as you can whilst leaving the other side happy.
4) Decide a starting point.
The person who offers first has the benefit of creating an anchor. This value will be the first point of reference in the deal and is likely to guide negotiations. The person who offers second has the benefit of additional information about his partner’s position. If a negotiation has little precedent or concrete information to start, it can be wise to wait and see your partner’s first offer. If the negotiation is more straightforward, setting the anchor can offer more of an advantage. Whether opening or responding it’s best to start with the biggest offer you can justify. This is likely to be too high for an agreement. However, there is psychological benefit simply in the act of negotiating. Starting the negotiation at a level they will accept cedes ground unnecessarily.
5) Ask questions and document responses.
Constant probing reveals opportunities. Look for areas where people value things more than you do. Be willing to ask simple questions particularly around the problem they're facing. Start by clarifying the situation, then the problem, its implications, and the need this creates. Larger negotiations often have a ‘listener’ who’s job is simply to look for the nuances in the other party’s actions. Where negotiations are stalling, it may be that your partner is acting irrationally. This may stem from being uninformed, constrained or having hidden influences. Try and root these out.
6) Bring up every issue.
Get as many points into the negotiation as possible and try to deal with them at the same time. This enables greater potential for trade and therefore value. Make multiple offers to encourage discussion and shed light on key issues. When making offers, precise numbers build trust but a range creates flexibility. Make sure to document the progress. Especially if there’s a trade off. You should never make concessions without reciprocity as they will be continually expected. Instead make reciprocity the norm. However, don’t just focus on the gains. Look at what is lost by the lack of a deal. Losses are often viewed as more painful than gains are viewed as positive.
4) Look for the interests behind positions.
Statements and policies block you from finding out true motivations. ‘It is not our policy’ may mean ‘we were burned by a similar agreement in the past so we’re not doing it again'. A protective clause may solve that problem and open up a new area of negotiation. If you’re negotiating with someone who’s taken a position, ignore it and ask what the motivations are.
7) Accept friction.
Without conflict it’s almost impossible to maximise benefit. So disentangle people from problem. Observe ‘from the balcony’ and facilitate perspective taking via tools such as rapport and mimicry. Focus strictly on the objective terms of the deal. Therefore, don’t justify yourself or your position. The issues are generally too complex and interwoven to support with specific points. Instead, keep make sure incentives are compatible, the focus on issues and finding an agreement. Make time your friend and remember, silence is strength.
