Negotiation Tactics for Managing Relationships

For those who have heard me speak recently regarding How to Work with the IRS or on a similar topic you know that I emphasize building positive relationships, listening, educating and negotiating with the types of issues that I am involved in with my clients.  This article from the Harvard Law School program on Negotiation points out the need to build a relationship in order to gain trust in a negotiation.  Unfortunately when we are under pressure we often forgo this and return to competitive tactics and begin to take positions rather than focusing on interests.  The article points out that this is to be avoided.  I concur.

The reason it is important to build relationships is to foster trust.   If you have trust with someone you want to work with the other party to find a way to resolve any concerns to maintain trust going forward.  Trust implies honesty.  Honesty does not necessarily mean transparency.   Let me explain.   In some instances when working with another party it is very important to be honest at all times to ensure trust.   However, it is not necessarily in your or the other party’s best interest to be totally transparent on everything.   It may be possible that total transparency may indeed cause other concerns.

Working with a client on a business deal as part of a negotiating team my client needed to explain to a third party that certain expenses were related to a potential merger or acquisition with another party.   The third party inquired further into those expenses.   I counselled my client to explain that the expenses were indeed related to the potential merger or acquisition of this entity with another party, but not to explain that management was also looking into possibly buying out the existing owners.  That information would have had negative repercussions to the third party wanting to pursue the issue with my client.  As such my client shared the information related to the expense being associated with the potential acquisition or merger with another party (total honesty here), but not that part of the expense was associated with a possible management takeover of the entity (not being totally transparent).   This allowed my client and the third party to continue the dialogue and work to a mutually acceptable resolution regarding my client and the third party.  

By first developing a good working relationship (trust but verify) the level of factual development needed tends to be less saving time and resources.  Once trust has been lost the level of factual development and verification of additional items can grow exponentially causing a significant increase in time resources and potentially delays. 

Neuroscience indicates that oxytocin is the neurotransmitter related to trust. Many underestimate the value of building a relationship, truly listening and then to begin educating the other side in a negotiation. I have found these elements often take up to 75% of the time in successful complex negotiations.  Many jump right into the negotiation or only spend a minimal amount of time on building a relationship, listening and educating.  For many simple negotiations this works.  If trust is already existing this works.  For more complex negotiations these first three elements are critical.  Don’t underestimate the need to build a good working relationship in a negotiation that fosters trust.

Michael Gregory is an expert in conflict resolution dedicated to making thought-leading entrepreneurs and executives more successful. Michael’s books, The Servant Manager: 203 tips from the best places to work in America and Peaceful Resolutions: A 60-step illustrated guide to conflict resolution are available at http://mikegreg.com/books.   Free resources are available online at www.mikegreg.com. Check out the blog.  Contact Mike directly at mg@mikegreg.com or call (651) 633-5311. 

About the author

Mike Gregory is a professional speaker, an author, and a mediator. You may contact Mike directly at mg@mikegreg.com and at (651) 633-5311. Mike has written 12 books (and co-authored two others) including his latest book, The Collaboration Effect: Overcoming Your Conflicts, and The Servant Manager, Business Valuations and the IRS, and Peaceful Resolutions that you may find helpful. [Michael Gregory, ASA, CVA, NSA, MBA, Qualified Mediator with the Minnesota Supreme Court]