If we pause for a moment and reflect on the constant flow of our daily lives and activities, it is a fact that we are all continually negotiating about a wide assortment of different things. It may be that we are seeking to motivate our employees or set deadlines, negotiate a pay rise, or simply bargain with our spouses regarding the cleaning rota!
In order to achieve the very best results from our negotiating activity, whether in the office or at home, it is useful to understand what can affect the outcome. After all, as with many skills, the art of negotiation can be improved with a commitment to learning and training.
To help, in this article we discuss the five most important considerations for a negotiation and explain how they can affect negotiation success or failure.
1. Negotiation Is Part Of A Continuum
If we are permanently in a hurry to forge agreements with our counter-parties then it is highly unlikely that we will ever secure the best outcomes. Worse still, we may end up with sloppy agreements that we will live to regret.
The old adage that “people buy from people” still rings true. This means that a carefully constructed win-win outcome is usually the product of a healthy, constructive and mutually-respectful relationship that has been built up over time.
These relationships can only flourish if we make it our priority to rigorously understand the hopes, wants, needs, desires and priorities of our counter-party. Indeed, it’s here that the words of the famous American-Canadian motivational speaker, Brian Tracy, come in useful:
“Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, “What’s in it for me?”
If we can take as good care of our counter-party’s needs as our own, both before and during our arrival at the negotiating table, we will be well on our way to forging the right kind of outcomes.
This is because we can use this invaluable information to help to find and create opportunities for mutual gain. Effective negotiators are forever seeking ways of expanding the range of options in a negotiation rather than retreating selfishly behind a narrow, fixed agenda that only serves their own purposes.
After all, if we were to cook one of our friends a meal, we would usually take care to ensure that the ingredients were to their liking. A negotiation is no different.
To be truly successful we need to ensure that our solutions and suggestions are liberally peppered with our counter-party’s needs and preferences in mind. Otherwise how else will we sell our proposals to them? In fact, depending on how strong and healthy our relationship is with the other side, outcomes can often be decided before we even reach the negotiating table.
2. Outcomes Are Affected By Mindset
We need to remember that power in a negotiation is often a matter of perception. If we feel exposed, or like we are at a disadvantage, there is a real danger we will project this to our counter-party, perhaps through our body language or the tone of our voice.
It’s important to fully embrace the value of our product, service or solution and to possess an unshakeable conviction in the benefits that it can bring to our counter-party. After all, confidence is always infectious!
It’s natural to feel nervous though. If you ever feel this way, it’s useful to place your focus firmly back on to the counter-party and away from how you are being “perceived” or “judged” by them (hint: they’re not judging you at all). Such focus will help you to ask well-structured, well-timed questions, and by carefully listening to the answers you will undoubtedly boost your credibility and build trust.
One other key point on mindset is that we always need to try and aim for the very best outcome in the negotiation rather than seeking a compromise. That doesn’t mean we will not need to make concessions on the way, but if we aim for a compromise from the start then we are unlikely to give ourselves the necessary room to achieve our optimum outcome. Too often negotiators make the mistake of entering a negotiation with a “glass half empty” mind-set, which is not conducive for adopting the truly pro-active and collaborative approach required to find a winning solution for all.
3. Planning Is Paramount
The famous phrase “knowledge is power” definitely holds true in the world of negotiation. Ineffective negotiators tend to think that planning solely applies to their own needs and interests. But the fact is, by carefully researching our counter-parties we can create valuable leverage for ourselves in the negotiation. So, how clear are we about our counter-parties plans, their past experiences, or any potential sticking points that could unwittingly derail our negotiation?
Information like this can be used to remove barriers and to formulate solutions that take into account the fullest needs of everyone involved.
Needless to say, there are numerous places we can source relevant information, be it LinkedIn, our own databases, our networks of friends and colleagues, our counterparties websites and mission statements, and more.
It is a plain fact, and much research has been conducted to support this assertion, that when negotiations fail it is almost always because of poor preparation and planning in the early stages.
4. Ideal Outcomes And Limits Should Be Leveraged
Effective negotiators always have a clear notion of their ideal best outcome and their “walk away” point. They will strictly negotiate in-between these two points.
By knowing their parameters, they never run the risk of capitulating to unreasonable demands or agreeing to unfavourable agreements, while on the other hand they consistently aim high and seek to achieve the most favourable outcome possible for all parties.
In some cases, walking away from a negotiation may not be an option, but we should always remember that if it is on the table for us then walking away will usually be perceived by our counter-party as a sign of strength and not of weakness. It creates the impression that we have other options to consider.
5. Making Concessions in the Right Way
While making compromises and concessions in a negotiation is undeniably a normal part of the process, it is imperative that any concessions granted are given in the right manner. If we bestow a concession without requesting something in return then the value of our concession will be negated by our counter-party.
Worse still, we run the risk of creating an unhealthy and uncontrollable appetite on the other side of the negotiating table, which will certainly undermine us in the long run.
Any concessions granted should have been carefully prepared in advance (to avoid us accidentally giving away too much) and, when they’re granted, it is crucial that we fully communicate the value of them to the other side as well as attaching a condition.
Ultimately, all negotiations are based on a subtle balance of power between the participating parties and by making concessions in this manner the equilibrium will be carefully maintained.
By taking into account these five considerations we can adopt the best mind-set and approach for constructively opening up our negotiation activities, as well as resisting undue pressure and effectively protecting our interests.
If you have any questions or thoughts after reading this article, please feel free to get in touch. We always love to hear from new and seasoned negotiators alike.
And finally, if you would like to learn more about this topic, we’ve written a step-by-step guide on how to nail your negotiations, which comes with a free downloadable checklist.