Wednesday, September 10, 2008

Getting to Win: 3 Negotiation Tactics for Better Agreements

David A. Zimmer

David A. Zimmer
Practice Manager
Corporate Learning & Training
Veris Associates, Inc.

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Mention the word “Negotiation” and watch the reactions. Some shrink in fear, others start to salivate, some run for cover, and others sport a worn, plaid sports jacket. It is a word that means many things to many people. For the majority, it is a negative term. For those who “got one over,” images of fond memories come to mind. Why is that? Why can a word have so many meanings and evoke such variety of emotions?

Know The Basics

It boils down to the fact that most people are not taught the basics of negotiation, and yet each day, they negotiate some agreement. Granted, many agreements don’t have dire circumstances like a hostage crisis or millions of dollars saved by getting a lower price by just one penny.

Most negotiations happen without people knowing they are negotiating. For example, ask someone for a pen to sign your name and you’ve just “negotiated.” Disagree about a particular method of work and come to a consensus of a better way is negotiation. Speaking with your manager about the priority of work creates a negotiation session. And so forth.

As a project management specialist and managing many projects, I’ve had the opportunity to negotiate – some pleasant situations and some not so sweet. As project managers, typically we have responsibility for certain work being accomplished but no authority to make it happen. As a result, everything we do could be considered negotiation. Those who learn tips and techniques to gain the desired outcome do much better than those who bulldog their way through life. Ignorance in this case is costly.

Negotiation: Art not War

Let’s understand negotiation is not the art of war. Depending on the situation, we might need to strategize and map a course for our negotiation. Regardless of the circumstances, we must realize the art of negotiation is really the art of cooperation. While in the middle of it, it may not appear or feel like cooperation, but if neither side cooperates, no agreement will be struck. Cooperation from both sides is critical to successful negotiation.
Negotiation Definition

Negotiation is defined as:
  1. to deal or bargain with others

  2. to manage, transact, or conduct

  3. to move through, around, or over in a satisfactory manner.
All the definitions bear on negotiations between people. Therefore, three tactics help you become a better negotiator and arrive at better agreements.

Tactic 1: Know Your Opponent

Many people approach negotiation in a defensive manner. They clinch their teeth, steel their gut, and prepare for war. They know what they want from the deal and never stop to consider the other side’s viewpoint. Good negotiators understand their opponent.

Here are the areas to know:

  • Background. What is their background – culture, economics, social status, educational level, company position, etc. Are they putting on a front or air that facts don’t support? What are their goals? How will they benefit from the deal?
  • Needs. What does the opponent need from this agreement? What are the minimal requirements for them to feel satisfied? What desires would create a very satisfied opponent? Are they important to you? What is their motivation for the agreement?
  • Win. What would they consider a “win?” Can you give it to them without compromising or jeopardizing your position? Why are they negotiating? Why now? Can they wait for a decision or do they have to gain consensus immediately? If immediately, what is pushing them to that point?
  • Style. What is their style during negotiating? Are they laid back and unassuming or are they harsh, blusterous and forceful. Do they demand or are they willing to converse?

Interesting fact here: Most people don’t prepare themselves for the negotiation. They think they know what a win looks like for them, but they don’t understand their opponent.

What if you don’t have time to prepare or you can’t seem to answer some of the questions listed above? Simple. Ask! That’s right, ask your opponent those questions. You will be able to tell from the answers if they are bluffing or not. More importantly, it builds a rapport between you and them.

Three Types of Win

There are three types of “win:”

  1. Full Load – The agreement that gives you everything you could possibly want and more. It has all the bells and whistles. It even comes with whipped cream and a cherry on top. It is the ultimate deal.
  2. “True” Win – It has all the necessary components and desires met. It doesn’t have the bells or whistles, but it is complete.
  3. Negotiated Win – you’ve compromised, given some things and removed some things but overall, a very satisfactory result.

You need to understand the three types of wins for both sides to be truly effective.

Tactic 2: Know Your Plan

To be effective, you must create and know your plan. You must identify three things about your plan to be effective:

  1. Know What You Want – make a list of the items that must be in the agreement for you to feel satisfied. Consider this your True Win state. You’ve agreed to the important parts of the deal and gained some additional aspects. It meets more than your minimum requirements. It might have a few bells and whistles, but it won’t have the whipped cream and cherry on top. That’s ok; you’re on a diet anyway.

  2. Know What You Will Give Up – always enter a negotiation with things that add value to the agreement for you, but you are willing to give up to move the negotiations along. It must be something tangible and valuable to you, but you agree to not make them a sticking point. Your opponent will see it as your willingness to come to agreement.

    By the same token, you should have a list of items you are willing to give that provide value to the opponent but don’t “cost” you much in terms of the agreement. Both gestures give the impression of willingness to reach agreement – very important for a good deal on both sides.

  3. Know When To Walk Away – taken from a Kenny Rogers’ country-western song, “You’ve got to know when to hold ‘em and you’ve got know when to fold ‘em.” Know your “walk away” level. No matter how important the deal is, there is a point where it is no longer profitable to continue the discussion or to strike the arrangement. It is better to walk away and do without than it is to come to settlement. You’ve have to decide that point BEFORE you start to negotiate. Make the decision before it becomes necessary and than stick with the decision when the time comes. Negotiations are inherently emotionally driven. In the heat of the battle, hanging in longer than the walk-away point does no one any good.

Tactic 3: Know Several Styles and Methods

Know your style of negotiation. Here are a few:

  • Pushy/Bullying – intimidates the other party into submission. Works for a very short period of time, but the other party is coerced and will eventually ruin the agreement
  • Confidently Promoting – Someone who appears to know what they want and waits to get it. They have all the time in the world, especially when you don’t.
  • Quietly Manipulating – very subtle approach using innuendo to convince you a particular requirement you stated is immaterial or minor to the situation when it might be a very important component to you. Mimics the peer pressure approach you experienced as a teenager.
  • Carefully Suggesting – one side suggests a particular “benefit” because they are looking out for the other sides’ best interest. They can come across as best friends with sage advice.

If you know your natural style, practice the other forms. By knowing and practicing different styles, you can use them to your advantage and switch as needed to best fit the situation. In fact, you might switch styles several times during the conversation.

Don’t settle on just one style or method. Have several types you can use at any time.

In A Nutshell

Negotiation is an every day event. We do it all the time without thinking about it. It is a necessary part of life. We negotiate with our spouse, children, friends, co-workers, bosses, neighbors, store clerks, doctors, lawyers, law officers, and more. In most cases, we don’t formally call it negotiation. We just do it.

To many, negotiation is scary simply because they haven’t done so well in the past and didn’t work towards satisfying agreements. Understanding three simple tactics can accelerate better agreements and more rewarding experiences.

Take the time to understand your opponent and their needs. Look at the agreement from their angle. If you help them meet their desires, they will usually turn around and help you meet yours.

Understand your plan. Know what the ultimate decision would be, back it down to “true” win for you, and most importantly, understand your walk-away point.

Negotiating is not really that hard. In fact, it can be down right fun.