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Negotiation how to negotiate for whatever result you desire

To build a long-term relationship in negotiation, work collaboratively and build agreements that benefit both sides.

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Negotiation how to negotiate for whatever result you desire

At the negotiation table, what’s the best way to uncover your negotiation counterpart’s hidden interests? Build a relationship in negotiation by asking questions, then listening carefully. Even if you have decided to make the first offer and are ready with a number of alternatives, you should always open by asking and listening to assess yur counterpart’s interests. Note that if your style of listening isn’t sufficiently empathetic, it won’t elicit honest responses.

A relationship in negotiation is a perceived connection that can be psychological, economic, political, or personal; whatever its basis, wise leaders, like skilled negotiators, work to foster a strong connection because effective leadership truly depends on it.

Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from Harvard Law School.

Positive negotiation relationships are important not because they engender warm, fuzzy feelings, but because they engender trust – a vital means of securing desired actions from others.

Consider that any proposed action, whether suggested by a negotiator at the bargaining table or a leader at a strategy meeting, entails some risk.

People will view a course of action as less risky, and therefore more acceptable when it is suggested by someone that they trust.

In order to create a durable relationship in negotiation, there are four basic building blocks that can help you create effective partnerships with the people you lead:

  1. Two-way communication
  2. A strong commitment from the leader to the interests of those he leads
  3. Reliability
  4. Respect for the contributions followers make to the organization

How to Build Trust Within a Relationship in Negotiation

People tend to respond to others’ actions with similar actions, as research in the social sciences has found. If others cooperate with us and treat us with respect, we tend to respond in kind.

If they seem guarded and competitive, we are likely to behave that way ourselves. What’s more, is that such exchanges can spiral into vicious cycles (those characterized by contention and suspicion) or virtuous cycles (those in which cooperation and goodwill prevail), according to skilled negotiation expert Keith Allred.

The reciprocal nature of trust reinforces the value of taking time to get to know the other party and build rapport before you begin to negotiate. Don’t assume that you can form a bond simply by exchanging a few friendly e-mails before meeting in person. Rather, try to forge a personal connection by meeting for an informal lunch or two.

Even just a few minutes of small talk can go a long way.

In her research, Northwestern University School of Law professor Janice Nadler found that negotiators who spent even just five minutes chatting on the phone—without discussing issues related to the upcoming negotiation—felt more cooperative toward their counterparts, shared more information, made fewer threats, and developed more trust in a subsequent e-mail negotiation than did pairs of negotiators who skipped the telephone small talk.

It seems that “schmoozing” and other forms of rapport building not only build trust but can also have a significant economic payoff.

How have you built trust within a relationship in negotiation? Share your story in the comments.

See Also: How to Deal When the Going Gets Tough – Most business negotiators understand that by working collaboratively with their counterparts while also advocating strongly on their own behalf, they can build agreements and longterm relationships that benefit both sides. During times of economic hardship, however, many negotiators abandon their commitment to cooperation and mutual gains. Instead, they fall back on competitive tactics, threatening the other side with “take it or leave it” offers and refusing to accept concessions of any kind.)

See Also: Beware Your Counterpart’s Biases – After a failed negotiation, it’s tempting to construct a story about how the other side’s irrationality led to an impasse. Unfortunately, such stories will not resurrect the deal. In the past, we have encouraged you to ‘debias’ your own behavior by identifying the assumptions that may be clouding your judgment. We have introduced you to a number of judgment biases – common, systematic errors in thinking that are likely to affect your decisions and harm your outcomes in negotiation. These include the mythical fixed-pie, egocentrism, overconfidence, escalation of commitment, the winner’s curse, the influence of vivid data, and so on.

See Also: Top Ten Business Deals of 2013 – 2013 witnessed a series of mergers, acquisitions, and other deals. Here are 10 negotiations and negotiation trends from which business dealmakers can learn.

See Also: Dealmaking – 5 Tips for Closing the Deal – What to do when you’ve done everything right, but you still don’t have an agreement. Here are some tips from Negotiation Briefings to help you close the deal in your next negotiating session at the bargaining table.

Build powerful negotiation skills and become a better dealmaker and leader. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from Harvard Law School.

Adapted from “Real Leaders Negotiate” by Jeswald Salacuse for the May 2006 Negotiation newsletter and “How to Build Trust at the Bargaining Table,” first published in the January 2009 issue of Negotiation.

Negotiation how to negotiate for whatever result you desire

Many negotiations strategies we use actually backfire. (Image: imagemajesty)

If you’ve read my columns, you know I’ve been on a bit of an Adam Grant kick this year. The Wharton professor’s book, Give and Take , has had those of us in the leadership field thinking and talking. It’s made numerous lists of the year’s best business books, as it offers significant, research-based, evidence that disputes many of the influencing practices that we take to be correct.

Grant’s work is immensely practical and timely. It cuts to the core of the influencing skills so many professionals are trying to strengthen in our current virtual, distributed workforces.

One of my favorite elements of Grant’s work involves negotiation. Being able to negotiate well impacts so many key factors in our careers. We negotiate for our jobs and salaries, for promotions and resources, with clients, and in sales. And if you’re in a field like law or investment banking, you negotiate non-stop.

Grant, and his colleague Northwestern University professor Adam Galinsky , are well worth the read if you’re trying to bone up on your own negotiation skills. And let’s face it, aren’t we all? Even the best negotiators fall prey to some of the traps that the research indicates simply do not get the best deal.

Here are the recommended best practices from Grant and Galinsky. How do yours compare?

1. Share information.

We often approach negotiation being very guarded and wary of showing our cards. Yet, while we believe this is a smart approach, it has a negative impact on our outcomes and inhibits trust. As Grant points out, people tend to be matchers and “follow the norm of reciprocity, responding in kind to how we treat them.” If we want to be trusted, we must first offer it.

Studies have shown that revealing some information, even when it’s unrelated to the negotiation, increases the outcome. You don’t have to put all of your cards on the table at the outset. Simply putting something of yourself out there – your hobbies, personal concerns, or hopes – can set a positive tone that’s conducive to gaining agreement.

2. Rank order your priorities.

Typically when we negotiate, we know what our key issues are, and we sequence them. For example, if we’re trying to close a new client, we might say that the price is most important, and if we don’t agree, there’s no use to continue.

Grant recommends another approach called rank ordering. His research shows that you are able to achieve better outcomes by ranking and leaving all the issues on the table and being transparent about it. That way both parties can compare their rankings and determine what the full set of options really are.

In the above example, perhaps you could make trade-offs in scope or travel requirements if the client can’t get to your price.

3. Go in knowing your target price and your walkaway terms.

Galinsky calls your walkaway price (or terms) your reservation price. Your target price is what you’re hoping for. Often we go into negotiations with one or the other – or let our partner start the bidding. This puts us at a huge disadvantage.

It’s critical to do the research ahead of time here. You need your research to be based on firm data, as not only will it provide more confidence and power to you, but it also reduces the chance that you’ll throw something crazy out there. By knowing your own range, it will help you make better decisions in the moment, and be clear about your limits.

4. Make the first offer.

This is one piece of advice that clearly defies conventional wisdom. In negotiations, information is often equated with power. We believe it’s best to extract as much as possible from the other person before tipping our own hand.

Grant and Galinsky both agree that the research is clear on this point: people who make first offers get better terms that are closer to their target price. The reason is the psychological principle of anchoring. Whatever the first number is on the table, both parties begin to work around it. It sets the stage.

Often we are reluctant to go first because we may be way off, and disengage the other party. But Galinksy notes that this does not play out in the research. He said that most people make first offers that aren’t aggressive enough.

There’s a reason we have the adage, “you get what you pay for.” Higher prices make the buyer focus on the positives, while lower ones invite focus on the downsides. In other words, we find data that supports this anchor. (Consider real estate: a high-priced home makes us look at all the desirable qualities, while a below-market offering brings up a bad location or needed repairs.)

Galinsky says that ideally the best first offer is one that’s just outside your partner’s reservation price, but not so far that they have sticker shock.

5. Don’t counter too low.

If you aren’t able to make the first offer, then you need to also protect yourself against the anchoring effect. Caution: most people go too low, too quickly. Your counter should be based on the same information you would have used if you’d made the first offer, Galinsky says.

You may also want to consider re-anchoring, as Grant puts it. Let the other person know that their offer is way off, and go back in with a new reset. It also may be helpful to call out what you’re observing to redirect the conversation, i.e. you may be trying to test my thinking with that first offer, but here’s more of what I had in mind.

6. Counter offers make both parties more satisfied.

Every buyer wants to feel that they got a good deal; every seller wants to feel as if they drove a hard bargain. Parties are most satisfied on both fronts if there was some back and forth. This may come as a surprise if you’re someone who abhors negotiation.

Galinsky even advises that you shouldn’t take the first offer, even if it meets your needs. By going back and asking for concessions you can ensure that you got the best deal, and increase your partner’s satisfaction as well. More satisfied partners are more likely to work harder and be more committed to the end result, which is the ideal outcome from the start.

What do you think of these negotiation tactics? Comment here or @kristihedges.

Successful negotiations now require creative marketing, sales and strategy; not the traditional “pound the table” tactics of the past. However, one thing remains constant in business: you don’t get what you deserve, you get what you negotiate. So go get what you want.

As a follow up to my Forbes column, How To Get More For Your Horses, here are 16 irrefutable remarks of entrepreneurial negotiation.

  1. Find out the other party’s agenda and embrace it. It is imperative to understand the point of view of the person you will be negotiating with by asking yourself these questions: What represents a successful result for her? What will constitute a win for her in a negotiation session? How can you make her look better? You don’t get to enjoy a victory lap in negotiations, until you have walked a mile in the other person’s shoes.
  2. Represent the market reality you are asking for. Sam Walton drove a Ford F150 truck because he wanted to look like a low cost seller. You have to be who you say you are 24×7 and not just during work hours. If you are selling Yachts, you better look like a Yachtsmen. Look like the money you are asking for.
  3. Know if time is working for or against you. The Viet Cong government knew Americans could not stomach watching the tragedies of war on television, so they knew they had to outlast negotiations. There, while our Secretary of State Henry Kissinger wanted to get right to how to end the war, the Viet Cong had long talks and negotiations over where everyone sat.
  4. Never split the difference. There are many ways to negotiate. “The reasonable person” theory says that a reasonable person should ask for money or conditions that are very close to what she actually wants, and that are close to what is fair. The problem is that those two things are often very different. If the market value for a service is $100,000, and the employee asks for $500,000, and the employer offers $95,000, then splitting the difference makes no sense. In a situation like that, if you simply split the difference, you would end up with a bizarrely unfair result. At that point, the employer has to assume that she is not dealing with a serious negotiator, because there is no validity to the $500,000 request.
  5. Sell your story, not your values. Whoever has the best story often wins. President Abraham Lincoln, a lawyer in life sold the story of a log splitter born in a cabin, is a good story if you are campaigning for President in 1860. He used his story to negotiate with his values in support of his presidential candidacy. What is your story? Write it down. Create a video. Document it. Think of it as the equivalent of a storybook negotiation that details facts and figures to support your market reality.

In “Entrepreneur Heaven,” we are not naïve enough to believe that everyone will negotiate in good faith. Lowball or “submarine offer” are real world negotiations. If someone throws you a low-ball offer, look at it first as an interested customer – not as an insult. If you are going to make a lowball offer, send it with a letter of explanation of why that you see it as the market reality. The note shows you respect the other side. On the other hand, a naked low offer is an insult to the other person and process.

If you follow my 16 irrefutable remarks on entrepreneurial negotiation, you can get what you deserve in business, have a lot of fun in helping the other side help you, and build bridges (not burn them) for the next round of negotiations.

As the founder of the Oxford Center for Entrepreneurs, I encourage economic development by helping business owners survive the pitfalls of fast growth by focusing on what…