PREPARATION
FOR A NEGOTIATION
If winning in negotiation is relative, and therefore down to each
party's definition of a personal win, it is vital to define what
that win will look like for you prior to the negotiation.
As
we cannot be absolutely certain what we'll achieve (because we
are dependent on the other party and the other party's attitudes,
skills and behaviours) we define our win within parameters. That
way, if we 'settle' within our parameters, we can justifiably
say that we have won, ie we have got what we wanted.
How
therefore do you define the winning parameters prior to a negotiation?
If
the outcome was solely dependent on your own performance it
would be easy. You could simply say to yourself 'if I achieve
x result' I shall have been successful.
But
because the result is not solely dependent on you it is not so
straightforward. You have to add to your intention another measurement
which equates to, 'but if the other party in some way prevents
me then I shall have still succeeded if I achieve Y'.
In
negotiation this is called defining your Most Favoured Position
(MFP), which is what you would like to achieve; and defining
your limit (Lt), which is what you might be forced to settle
at. The win in your mind is any agreement with the other party
between these two positions.
Prior
to a negotiation it is important therefore that you define your
own MFP and Lt in order to define your own success criteria.
Given that the other party (if he/she is a good negotiator)
will have done the same it is also a good idea to try and define
their MFP and Lt.
By
doing this you have in fact defined the win/win arena, otherwise
known as the Bargaining Arena.
THE
BARGAINING ARENA
Think of the Bargaining Arena as the limits
within which the negotiation is to be carried out. It is, if
you like, an arena, with fixed boundaries, in which you and
your opponent are going to use your negotiating skills through
which, rather like a tug of war, both of you will try to pull
hardest and concede the minimum of ground.
In
the Bargaining Arena there are many variables. Variables are
simply inputs to the negotiation. They are issues which go to
make up the whole negotiation result. In commercial negotiations
they might be items such as price, delivery arrangements, contract
terms, credit terms, penalty clauses etc.
In seeking to achieve a win/win outcome it is important that
these issues are kept linked throughout the negotiation. Only
then can you keep them together as a package and so achieve
an overall win within your defined parameters.
Some negotiators try to compete against you, one issue at a
time, and so 'nibble' their way to a win having reduced the
items one at a time, and achieved what they wanted with each
one. In effect what they have done is to reduce the negotiation
to a number of 'events' and won in each event to produce an
overall win. Your mental set has to be that while there are
many issues, they are all linked and add up to one outcome.
In
the Bargaining Arena it is vital, therefore, to keep all the
issues linked and mutually dependent.
ROOM
FOR MOVEMENT
If neither party in a negotiation is prepared to move away from
their Most Favoured Position (MFP) it can mean one of two things.
Firstly, they are being overly competitive (seeking a win/lose
outcome) or that they do not need the other party, and can therefore
achieve the result they are seeking without them.
For
a negotiation to take place there must be movement
and there must be a desire to work
together. If neither exists you have a deadlock, which
results in both parties walking away from the negotiation
with a resultant lose/lose.
The
only other outcome is where one party totally concedes to
the other party's demands and settles at their MFP, which
results in a lose/win outcome as far as the conceding party
is concerned, and a win/lose outcome for the other party.
For
good negotiators, a lose/lose, lose/win or win/lose outcome
are not desirable because in all these three scenarios another
human need is lost-the need for a relationship with the other
party.
What
makes a negotiation different from a sale, is the need for
a relationship.
I
can buy or sell an item of goods from or to another party,
and if I never have to service or support that sale, I might
as well get the best price possible, no matter what the cost
to the other party.
But,
if that other party holds some kind of power or influence
over my future, then it benefits me to keep them happy and
feeling good, because then I gain in the long term. If they
too gain in the long term, then by working together we have
won in the short term and are winning in the longer term,
a very important basic ingredient to commercial success. (It's
easier to sell to existing customers who like and trust you
than to strangers who have no knowledge of you).
Successful
negotiators therefore actively seek to find room for movement
because they know that if they can, they have created a short
term deal and a long term relationship on which future deals
can be based. This is simply good commercial sense.
...READ
ON
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GIVE AND TAKE
To be able to give and take (trade concessions) is therefore
a primary negotiation skill. But this does not mean to give
and take at the same rate, or equally, or at the same time.
In
each negotiator's mind there is a value for each 'give' that
he/she gives and each 'take' that each he/she takes. Each one
knows the true value to his/her own business and this true value
is utterly relevant when deciding on which concessions to make
and what you want in return.
The
important issue here is to assess the perceived value to the
other party.
In
negotiations, the skill is to concede in small degrees items
of low value to you, but which may be of significantly higher
perceived value to the other party. To do this you need to
know what would be of a high relative perceived value to the
other party.
You
also need to be able to value your concessions as benefits
in such a way that the other party will see the concession
you've offered as having a real worth to his/her business.
Only then can you make concessions of little/lesser value
to you but of greater value to your opponent.
In
making concessions therefore you need to have a complete working
knowledge of the other party's situation, business and objectives.
It is vital that you understand the part you play in their
business success.
Concessions
are like gold dust-trade them sparingly, in small amounts
and drawing out the commercial benefits to the other party,
and of course always insist on a concession from the other
party in return
QUESTION, LISTEN
AND CONTROL
By now it will have become apparent that a primary skill in
negotiation is questioning.
Through
questioning you will be able to ascertain the other party's
Most Favoured Position (MFP) and limit (Lt). Through questioning
you will be able to assess the major benefits sought from
you and the relative perceived value of those benefits. Through
questioning you will be able to lead, guide and control the
negotiation to a settlement to produce a win/win.
Wherever
possible (especially in large negotiations) it is wise to
have a lead negotiator, a recorder (a listener and note-taker)
and a summariser (someone who can 'read' the negotiation and
comment objectively on what is going on).
This
isn't a luxury which most of us have. Normally all three roles
have to be played by one person-you! What can you do?
You
can make notes of key points or issues so that you can summarise
the picture. The skills of paraphrasing, silence, and encouragement
are key. Your task is to build openness, trust and understanding,
not to outwit, outsmart or outpoint.
To
build the relationship and trust you can minimise surprises.
You can do this by pointing the way forward and preparing
your opponent for your next move eg 'I'd like to make a proposal.
What I suggest is ...'...'Let me put to you a question. Why
is x so important to you?...'Let me respond to what you've
just expressed. You're saying that...'
Good
negotiators are calm, collected and unhurried. They do not
pressure, surprise or threaten. They are as concerned about
the deal as they are about the relationship, and their interpersonal
skills evidence this.
Be
too aggressive, patronise, put down or be plain competitive
and you may 'win' but only at the risk of 'loser's revenge'.
FEELINGS-THE
ULTIMATE MEASUREMENT OF SUCCESS
All of us want to be winners. It is a self-esteem issue. It
is a personal pride issue and frankly it makes us feel good.
What we feel largely makes us. What we are makes our business.
If the other party in a negotiation feels that he/she has
been defeated their natural inclination is to plot revenge
(how can I get him/her back?). The problem with revenge is
that it can consume us (it's all we think about), it's an
unhealthy motivation (I'll get you back; I'll make you suffer),
and it results short and long term in a lower self-esteem
and damaged relationships.
The
message is clear; avoid 'win/lose' situations in which the
other party can so easily get even with you or your organisation
with comments made to third parties or even worse actively
influencing events to conspire against you.
If
you are forced to surrender, to 'give in' and come away from
a negotiation feeling belittled, stupid or inadequate, the
opposite of the `win/lose' feelings expressed above will apply.
You will want to get your own back and you can become consumed
about your own revenge. This can be distracting and time consuming.
Lose/lose
outcomes, when both parties walk away from the deal and the
relationship, leave both feeling dissatisfied, demotivated
and possibly filled with self-doubt (What did I do wrong?
What could I have done better? What will happen next time?)
Win/win outcomes are not only important from the pure common
sense of a deal done that benefits both parties commercially,
but also results in a good relationship. They enable both
parties to continue to respect each other, like each other,
and learn from each other, the ultimate in a partnership mode
of working together which has both parties feeling winners.
When
both you and your negotiation opponents feel and behave like
winners, the opportunity exists for you both to create a mutually
dependent future-the ultimate win/win in business.
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