Most business leaders spend the majority of their time negotiating. This includes:
- Convincing customers that the company’s offering will solve their problems
- Encouraging staff to supply that offering in the best possible way
- Ensuring contracts are fair to all parties
- Persuading investors that the company offers the desired return
- Influencing regulators to support the company’s vision
It is surprising how few leaders ever take the time to deeply hone their negotiation abilities. How many times have we heard that a negotiation would have gone very differently, but for a few circumstances outside of the negotiator’s control? The savvy negotiator always gets the best deal, regardless of the circumstances, because they know they have employed all of the negotiation tools in their toolkit. Here are a few.
1. Define the Problem
The first step to any successful negotiation is to get both sides to agree on what the problem actually is. For instance, salary negotiations with an employee should be framed in the context of the company operating as a whole – not just the employee’s personal needs, and not just yours. What will make the entire system work better? When a manager is in charge of an operating unit, it can sometimes help to frame negotiations in the context of that entire unit. If the entire salary budget is $1m, ask the manager how they think the entire pool should be divided. Framing a negotiation in a broader business context will help align the goals of all parties and allow you to work from a common ground.
2. Attend to the Drivers – Yours and Theirs
Knowing what drives the other side’s behaviour is very helpful. In salary negotiations with an employee, for example, you know the person is after the most money they can get, but what else is driving their side of the negotiation? There are dozens of desires that drive human behaviour including being right, being important, having respect, having influence, and making a difference, to name a few. Thinking beyond what they are asking for financially to get to the heart of what really motivates them is a critical step in the negotiation process.
A more advanced tactic is to determine what is motivating you. Sure, you want to pay as little as possible to get the job done effectively, but what drives your behaviour in the negotiations? Are you simply impatient to complete the deal? Is it more important that they like you than what you pay them? Maybe feeling important is your key driver. Awareness of your own drivers and identifying when they are at play in the negotiation will allow you to make more rational and tactical choices.
There are also two universal drivers that every human has running in the background. The first is wanting to feel safe. If the negotiation is with a critical employee, for example, then fear of losing them will drive negotiations. The second driver is saving face. We all want to come out of a negotiation perceived as having done a good job. These drivers will be at play for both you and the party on the other side of the table.
3. Perspective is King
Each negotiation party comes to the table with their own view of the world. The best negotiators find ways to present their own perspective in such a way that the other side can understand it. They also open their minds to the other point of view. If the problem was well defined in the first place, each side can alter their position based on the others’ perspective – after all, there are many paths to the same end goal.
Some negotiators see themselves as gun slingers and are willing to risk the relationship to force their perspective on the other side and win their point. Like a child who doesn’t like the rules of the game and therefore takes their ball and goes home, an employer that locks its staff out or staff members that go on strike may win but are doing so by brute force. These tactics should be used as a last resort and only if the negotiation will never need to be repeated. In a negotiation, you have to be prepared to give in order to receive. In negotiation there are starting positions, and conversations that lead to moments of truth for both sides, resulting in altered positions. The cycle repeats until both sides can find alignment on how they will proceed together to the desired end state.
If you can find a way to define a common problem, recognize the drivers working on each side of the table and find ways to give on your position, you’ll find a solution that can leave both sides feeling like winners. Working through a gnarly negotiation right now? Let’s grab a coffee together and talk it through.
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