As a manager, you will often find yourself in a situation where there is an issue that you cannot resolve alone and must negotiate with another party to reach an agreement of mutual benefit. Negotiations can be formal or informal, e.g. a chat in the corridor or a prearranged meeting, and can be with anyone, whether a member of staff, a customer, another department or senior management. The following tips comprise practical advice to help you negotiate effectively. Equally, an awareness of the major pitfalls, as outlined below, will help you to ensure a successful outcome to your negotiations.
Tips
Often, what may initially look like a zero-sum negotiation (where a gain for one party means an equal loss for the other) can reveal plenty of scope for agreement if examined more closely. For example, someone buying a car may want to get the cheapest deal possible, and the dealer may want to get the most commission possible. However, on closer examination, the buyer might also be interested in extras such as a sun-roof, while the dealer might be interested in part-exchanging the buyer’s old car.
It is important not to lose sight of the overall picture by concentrating too hard on the details. There is a danger of treating each smaller segment as a zero-sum negotiation. Instead, these smaller segments should be treated as part of a larger package, allowing a greater degree of give and take.
Successful negotiations require an atmosphere of calm, non-confrontational discussion. Emotions are best kept under tight rein. It is very important to distinguish between the issues involved in the negotiation and the relationship with the other party. Discussing the issues as a matter of mutual, legitimate concern can defuse emotional aspects of a negotiation and produce a stronger long-term relationship between the two parties.
Work out your negotiating positions in advance: ideal, realistic and fallback. You should also map out what you expect the negotiating positions of the other party to be. Where the two areas overlap is where the area of possible agreement exists.
Pragmatism is an essential quality for a negotiator, with good, objective judgement required at all times. The negotiator needs to be able to judge precisely when to make concessions, when to play hardball, or when to back away from a deal.
Focus on interests, not positions. Positions are what each party says it wants, interests are what they actually need. Identify interests by asking ‘why?’ and ‘why not?’ questions. Look at the potential consequences. Identify the basic human needs, and use specific concrete examples to instigate conversation about interests. Understanding the root causes for the other party’s stance can make it easier to come to a mutual agreement.
Practice active listening. Let the other party know that you hear and understand what they want, and that you consider it to be a legitimate concern. This type of listening will make the negotiation process run much more smoothly, and should calm down any potentially volatile situations.
When setting goals for a negotiation, ensure that they are large enough to encompass the key interests of both sides. Attempt to solve both parties’ problems, and don’t settle on one idea before exhausting all the possibilities. If necessary, brainstorm the problem to find as many options as possible, using the basic brainstorming ground rule of no criticism of each other or each other’s ideas. Don’t attribute the ideas; create a long list of ideas, which will be turned into options, focusing on mutual gain.
Ensure that deadlines set for negotiation are within reason. Negotiations will fill up any time available to them, so if a six-week deadline is set, the negotiations will take up all of those six weeks, and the same goes for six months.
Pitfalls
The negotiation process can easily grind to a halt if either party is unwilling to change the status quo. To avoid falling into this trap, set clear negotiation objectives and ensure that these are flexible enough to find alternatives outside the status quo. Also, look at every alternative and don’t stick with the status quo simply because the alternatives are more difficult.
People can easily be ‘locked in’ to previous investments: they will continue working with an unworkable proposition far longer than is desirable, due to an inherent unwillingness to admit to bad judgement. Avoid this by seeking the opinions of individuals who were not involved in the initial investment and ensuring that any reluctance to move away from a prior investment is not for reasons of pride.
Beware of first impressions. Our minds tend to focus on the first information we receive, giving it more weight than it perhaps deserves. Experienced negotiators can use this to influence the rest of the negotiations. To avoid falling into this trap, make a conscious effort to focus on other information than that first presented, and stay open to new information and opinions, giving them all sufficient consideration. Also, look for chances to use first impressions to your own advantage.
Beware of following ‘received’ wisdom. It is tempting to ask others who have been in a similar situation for their advice and opinions. While this can be a useful exercise, it can encourage people into taking the shortcut of following the same route. To prevent falling into this trap, be aware of people’s tendency to accept received wisdom without really thinking about it, appoint a ‘devil’s advocate’ to develop arguments for other approaches and make sure that advisers are not just ‘yes-men/women’.
The choice of language used can have a major impact on the way people think in a negotiation and skilled negotiators can use this to their advantage. Watch out for the way in which statements have been phrased and try to turn them around. Could a negative be turned into a positive, or vice versa? Would the response be different if the phrasing were different?
Overconfidence and over-caution, often based on the influence of past events, is a potential pitfall to be aware of when predicting uncertain futures in negotiations. Overconfidence can provide serious trouble in the future, if the prediction proves to be too optimistic. On the other side of the coin, however, over-cautiousness can result in unnecessary competition and drawn out negotiations. To manage predictions successfully, ensure that they have been properly mapped out, over their upper and lower ranges, and consider the circumstances in which they would exceed those boundaries. Also ensure that each assumption is based on current information, rather than solely on the basis of past experiences.
Reference: https://app.goodpractice.net/
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