4.5 Best Practices of Negotiation

As we wrap up this course on the art of negotiation, I’d like to leave you with some rules to live by or best practices when it comes to negotiation. First and foremost is that in all negotiations your ultimate goal is to maximize the value for both parties. You will undoubtedly encounter many counterparts who do not share this goal, but you should always start with that as your pursuit. Negotiations focus solely on the distribution of a single option or unchangeable set of options are destined to end up as hard bargaining negotiations, which are almost always win, lose. Always seek new opportunities to add value to the agreement instead of battling over an unchanging pool of options. Begin the process of negotiation by building trust. It is a critical component of a quality negotiated agreement, and can’t be started too soon. It’s wise to begin the process of trust development in all business relationships, both within your organization and without. Even if you’re not engaged in a negotiation. Do this by building connections, demonstrating your competence and reliability, speaking accurately and honestly, providing support and assistance without an expectation of compensation and engaging in meaningful, straightforward, and positive dialogue. You never know with whom you’ll end up negotiating and it pays to have developed trust before you begin. Tailor your approach to the personality of your counterpart. Every counterpart will be different, and every negotiation will be different. In the early stages, spend your time learning about your counterpart. Is his or her preferred style of interaction, typical body language, and the topics and issues which seem to generate emotional responses? Model good dialogue and questioning behavior. And work to understand and consider options from your counterpart’s point of view. As you are asking questions, listening to responses, and observing body language, work to understand what is happening in your counterpart’s mind. And try to understand his or her motivations and limitations. Observe his or her interactive style. For example, does he prefer to minimize small talk and get straight to the point? Does she like to chat about the weather or the current events before getting down to business? Does she have lots of pictures of family or friends in the office? Or none? These observations can tell you quite a bit about your counterpart’s prefered operating style. Ask questions, lots of questions. Please note that I am not recommending that you turn your conversation into an inquisition. But that you use questions for a wide variety of information gathering, information sharing and idea testing. If anything is unclear or confusing be sure to ask about it. If your counterpart reacts negatively or strongly to something you say, you may want to ask why or if you are interpreting their response accurately. Use quality questioning to demonstrate your interest in the counterpart’s needs and expectations, options that might be of interest and his or her level of comfort with the negotiation. Ask questions also to clarify your counterpart’s level of authority and empowerment. And determine just how much power he or she really has in this negotiation. Listen and observe, listen to what your counterpart is telling you and not telling you. Avoid listening with an agenda. Don’t think about what you will say next while your counterpart is speaking. Listen to what he or she is saying and respond appropriately. Listen for changes in volumes, changes in tone, changes in or, or hesitation. Take note of what you hear after the meeting and think through what was said and what was not said. Generally speaking, the recommendation is to talk less and listen more. The more your counterpart talks, the more you learn about his or her expectations, requirements, position, and values. While you are listening, asking, and answering questions and presenting proposals, control your emotional responses and exercise self-discipline. Strong emotional responses should only be used intentionally and in a very limited and controlled manner. It is easy to lose power when showing excess, excessive emotion. Even if your counterpart is engaging in emotional outbursts, strive to remain calm and in control. Model the self control which you need for your counterpart to exhibit. As you are preparing to meet or present your proposal keep in mind that you probably have more power than you think. This power is only useful to you however if you use it. So don’t be afraid to use perceived power if you’re confident that your counterpart perceives this power to be real and it can be just as useful as real power. As you get the point of presenting and negotiating proposals, keep your focus on increasing value and not just distributing it. It is far too easy when negotiations become challenging, our counterparts attempt to use particularly negative tactics, to fall into hard bargaining or simple distribution of what has already been defined as the main point of the negotiation. Always be on the lookout for means or options to add value to the agreement by considering creative combinations. Once a proposal is on the table and negotiations over various points are underway, focus on interests, not positions. Positions tend to be argued, but the interest that underlie might include some compatibility. There are likely to be multiple interests which underly a position and multiple means of achieving the interests. Find out by asking why and why not. When you present an idea, suggestion, or proposal, always present your reasons first and the proposal afterward. If you present the proposal first, your counterpart is likely to stop listening to you, stop listening to your reasons, and perceive them as justifications after the fact. During your dialogue, be clear on your goals and objectives for the resulting agreement but also be clear that you’re open to new ideas. This is the greatest justification for having a clear and complete framework agreement and a clear and detailed BATNA. Look at each proposal or suggestion as one option of multiple options. You should not present you, yours as your only position nor should you perceive your counterparts as his or her only position. Regardless of how it was presented. Finally, you must prepare and plan. Prepare by doing research, learning everything you can about your counterpart, the organization, the market conditions, your competition and your own options for delivery, volume, packaging, payment terms, inventory, inclusions and support. Use what you have learned to plan. Plan your questions, your framework agreement, and your BATNA before you make or consider any proposals. Plan how and when you will offer a proposal and how you will respond to the potential reactions of your counterpart. These basic guidelines are my recommendations for all negotiators. Beyond these, it is very much about your personal style and how you adapted to the needs of the specific negotiation in which you are engaged.