Negotiation is a fact of life. We do it with our friends and families all the time – ‘I’ll pick up the kids, can you do dinner?’ – deals like this are so easy, so normal that we don’t even notice them. But when the stakes are higher, it can induce anxiety. From asking for a raise, to sorting a supply deal or arranging a merger, negotiation can leave even the most confident among us feeling intimidated.
Luckily, like most things, you get better with practice. And it helps to know there are some common approaches to successful deal making.
Know what you want
A common problem when negotiating is not knowing what you want. It’s no use having a vague idea of what a successful outcome looks like. Before you go in, think about your objectives and make them measurable, decide on your ideal result and consider your non-negotiables as well as what compromises you’re prepared to make.
It’s also wise to spend some time assessing exactly what the other party might want, so you are not only prepared but can develop solutions that are mutually beneficial.
Go for the win-win
A common mistake of negotiation is viewing it as a competition where there is a winner and a loser, when ideally you want to pursue an outcome where everyone’s happy.
Psychologists call this tactic integrative bargaining, looking to treat negotiation holistically and in pursuit of both parties’ interests. The opposite is distributive bargaining, where someone has to walk away feeling at a loss.
It helps here to consider what the other party really needs. Think outside the box. There may be something you can offer them that you never initially thought of as a sweetener.
It sounds so simple. But people are scared to just ask for what they want. Instead, they beat around the bush, or settle for second best.
Questions also allow you to arm yourself with knowledge. Until you’re in the meeting, you’re never going to have all the answers. But you should know exactly what you’re going to ask. Robust questioning has the added benefit of easing social tensions and making both parties feel like it’s a collaborative space.
Managing your emotions
Emotionality can both help and hinder negotiation processes. It’s useful then to understand which emotions can get in the way and which can actually get you closer to your goal.
Anxiety can be particularly unhelpful. Though a healthy dose of nerves will make sure we do the adequate research prior to a negotiation, actually appearing anxious in the meeting rarely does anyone any favours. Similarly, conversations led with anger can either put people off side or bully them into submission which rarely leads to good long-term outcomes.
Instead try to frame your emotions around your passion for the deal. Excitement can elicit a strong response, so too can remaining calm and respectful.
Getting a third party
Certain negotiations such as purchasing or selling a business or working through a divorce, are so high stakes or emotionally fraught that it can be best to engage a third party. Engaging a professional to assist can bring expertise, insights from their experience and also ideas for compromise that may have alluded you. Whether you employ a professional or a trusted ally, a third party can provide perspective, remove some of the emotion from discussions and also allow you some breathing room.
Be prepared to walk away
If you’re not entirely comfortable with the outcome, give yourself time to sleep on it. Don’t allow yourself to be pressured to agree to something on the spot.
And remember, not every deal is meant to be. Sometimes by walking away from something you can actually preserve the long term relationship, rather than settling on a contract that would have left both parties resentful. Understand your bottom line and know there is power in saying no.
Certain negotiations are always going to be difficult, but it helps to know there are tried and tested approaches that work. By taking the time, practicing and mastering the art of negotiation you could reap the benefits in your business or personal life.
As always, if you would like to discuss the contents of this newsletter please give us a call 07 5559 5760.