As a leader you are involved in all kinds of negotiations daily. These can run very smoothly, or they can be difficult disputes with significant conflicts. The question is what can you do to create value at the negotiation table regardless of the situation? Here are ten tips for creating value that you may find valuable in your upcoming negotiations with employees, peers, your boss, customers, clients, vendors, shareholders, or other stakeholders. There lessons can be applied to any negotiation. Part 1 on the blog November 21, 2022 addressed the first five strategies as
- Research the other participants to learn all you can about them
- Consider ways to bond with them
- Consider ways to build trust
- Know your BATNA
- Come prepared with alternatives
This blog addresses the next five strategies presented here.
6. Assess their alternatives
Consider how the other party may look at the negotiation. What do you think is their BATNA? What do you think they may propose between their starting position and their BATNA? Think about how they may approach the negotiation by being prepared for what you think they may propose. How might you think you may respond to what you think they may propose? Having given this some thought, in the actual negotiation,
be prepared to be flexible when proposals are made that were not expected.
At least having gone through this exercise this will help you be better prepared for the unexpected and how you may proceed. Keep in mind this is interactive in nature. You will need to adapt to what the other party proposes to you. Be prepared ahead of time to make the first offer.
7. Make the first offer
Consider a legitimate first offer that will demonstrate where you are coming from and have the analysis to bring home that indeed this was a thoughtful, well-reasoned out proposal. This will give the other party a chance to see that you are serious. This first alternative that you proposed is called an anchor. In negotiations the first true bona fide offer helps set the stage for the negotiations. This is a well-documented approach based on both academic research and real world applications.
The party making the first substantial offer skews the decision maker towards that anchor.
For example, if you are at zero and the other party is at 100 and you offer a well-reasoned out thoughtful anchor of 20 the chances are the final agreement will be much closer to 20 than a much higher number closer to 100. Similarly, if the other party provides the first well thought out reasonable first offer of 80 the final agreed number is far more likely to be closer to 80 than a lower number closer to zero. If multiple issues, consider the additional complications.
8. Expect reciprocity
As you make concessions insist on the other party making a concession too. Point out that you are making a significant concession based on the facts and/or law applicable to your situation. Indicate that this concession was not entered into lightly. Indicate that you and your team worked through various alternatives before proceeding with this offer.
Having done your homework, ask the other party what they are willing to offer you in return.
Push back indicating that you expect a significant concession on their part given the major concession you have presented here. Listen actively to the response. Paraphrase and summarize their response to demonstrate listening actively before actually responding to their proposal. Remain positive, focused, and professional regardless of the response of the other party.
9. Listen actively
Listening actively involves really paying attention and reflecting on what you heard. All too often while hearing what the other party is saying, you are preparing for how you will counter what the other party just stated. Instead, pause and save those thoughts. Instead, paraphrase what you heard them say. Summarize what you heard as key points. Ask further open ended questions to make sure you understood. Use a phrase like “tell me more”.
As you explore with questioning it is possible that this process could cause the other party to look at the situation differently.
Empathize with their perspective. Put yourself in their shoes. Share how you feel about their comments demonstrating understanding. Let them know what you think and demonstrate that you understand their feelings. If you don’t have a full or correct understanding, they will correct you and clarify their position. It is important that you make every effort to listen to them before proceeding and sharing your response.
10. Apply The Collaboration Effect
The Collaboration Effect ® is all about connecting relationships, listening actively, and educating judiciously, in order to build bridges and negotiate closure. By taking the time to build an authentic, connecting relationship ahead of time with the ideas above this can only help in the negotiation. Listening actively is summarized above. This is hard. You need to suspend judgment and not provide any solutions while listening actively.
If the other party has been truly listened to, they are more apt to listen to you.
Having learned and gained significant insights into where the other party is coming from you can educate them the way they want to be educated. Don’t come in with a cookie cutter approach. Rather having come with your alternatives and a planned approach, modify the plan to address what you have learned about their interests and how you may best provide your alternatives to them.
The following article from the Harvard Program on Negotiation spurred me to expand on their commentary and hopefully give you some ideas that will help you in your next negotiation.
These ten steps are based both on theory and practical application. Give them serious thought before your next negotiation. Let me know how it goes. If you would please share any of your insights and experiences with me. I would love to hear from you.