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August 31, 2005
Negotiation - Rules of Engagement
I recently taught a class on negotiation strategies and tactics. As part of my preparation for this I started formulating a set of guidelines using some of the obvious thing most people know (or should know) and adding some of my personal experiences. The results are my "Rules of Engagement" ;-)
I'm starting this post by making it crystal clear that negotiation is a process that can be learned! By following a number of rules, which I have outlined below, and practicing (repetition, repetition, repetition is the mother of retention), virtually everyone can fine-tune their skills at negotiating deals in which everyone wins. Please note that the “everyone wins” part is very important when you negotiate and want to continue a good relationship (i.e. funding/financing deals, leases, or salaries) with your counterpart post negotiations. If you are negotiating a one-time deal (i.e. bazaar, flea market) its more of a guideline than a rule. You'll notice that the majority of deals you negotiate, however, fall under the win-win rule.
Ok, here goes:
1. Always remember that everything is negotiable! Don’t narrow a negotiation down to just one issue. Develop as many issues or negotiable deal points as you can and then juggle in additional deal points if you and the other party lock onto one issue. Line up deal point early that you are willing to give up later.
2. Form and crystallize your vision of the outcome. In my book that is the NUMBER ONE most important rule, success of which requires some of the other rules. The counterpart who can clearly visualize the end result will most likely be the one who guides the negotiation. “Buy into” and “believe in” that you will get this deal done in a way that works for you.
3. Set a goal for each deal point. Define your minimum level of acceptance for each goal. If you aren’t clear on your goals, you will end up reacting to the propositions of your counterpart.
4. Prepare in advance. Information is power. Obtain as much information as possible beforehand to make sure you understand the value of what you are negotiating. Remember, very few negotiations begin when the counterparts arrive at the table. Keep the 5 “Ps” in mind: Proper Preparation Prevents Poor Performance!
5. Ask questions and address your concerns. Concerns are sign for missing clarity. Clarify information you do not understand. Determine both the implicit and explicit needs of your counterpart. Make sure your questions are or at least sound educated and on point or you risk losing credibility.
6. Listen-listen-listen. Please don't formulate your next thought while your counterpart is talking to you. When you do a good job listening, you not only gain new ideas for creating win-win outcomes but also make your counterpart feel cared for, understood, and valued. This also allows you to find out what the other party wants. If you assume that his or her wants and needs are the same as yours, you will have the attitude that only one of you can “win” the negotiation.
7. Aim your aspirations high. Your aspirations will likely be the single most important factor in determining the outcome of the negotiation. You can aim high just as easily as you can aim low. Good deals meet somewhere in the middle. The higher you aim the more you will see that middle being closer to where you actually need it.
8. Be flexible and develop options and strategies. Successful people are those who have the greatest number of viable alternatives. They can "go with the flow". Similarly, successful negotiators are those who have the most strategies they can use to turn their options into reality.
9. Think like a dolphin. I love Dolphins (as everyone who has been at my house can attest to). The dolphin is the only mammal that can swim in a sea of sharks or in a sea of carp. Dolphins are able to adapt their strategies and behaviors to their counterparts. Remember, even when negotiating with a shark, you always have an option - you can walk away!
10. Be honest and fair. In life, what goes around comes around. The goal in creating win/win outcomes is to have both counterparts feel that their needs and goals have been met, so that they will be willing to come back to the table and negotiate again. An atmosphere of trust reduces the time required to create win/win outcomes.
11. Never ever accept the first offer. Often, the other party will make an offer that he or she thinks you will refuse just to see how firm you are on key issues. Chances are, if you don’t have to fight a little for what you want, you won’t get the best deal.
12. Deal from strength or act the part. Be strong, and exert confidence. If that’s not possible, at least create the appearance of strength and confidence. If the other party thinks you have no reason to compromise in your demands, he or she is less likely to ask you to.
13. Find out what the other party wants. Concede very, very slowly, and call a concession a concession. Giving in too easily tells the other party that you will probably be open to accepting even more concessions.
14. Be willing to walk away. This is a very important part of any negotiation process. If you counterpart knows or senses that you need or want the deal badly you're toast! Be willing to let it go. If you know you are too desperate or too attached to the deal let someone else negotiate for you.
15. Be cooperative and friendly. Avoid being abrasive or combative, which often breaks down negotiations. Look your counterpart straight in the eye when you talk. Laugh, if something is funny, but don’t smirk or grin. Persuasion has a major part in any negotiation success.
16. Use the power of competition. Someone who thinks it’s necessary to compete for your business may be willing to give away more than he or she originally intended. Sometimes just the threat of competition is enough to encourage concessions.
17. If no competition is there, create it, if you can. If you know what your bottom-line is to get the deal done today make sure you tell your counterpart that, once you conclude that the negotiations have gone stale (i.e. if you can do "X" I’m willing to go for it right now, otherwise I will need to think about it some more/shop around).
Posted by Ben at August 31, 2005 02:02 PM
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Comments
Great reading, keep up the great posts.
Peace, JiggaDigga
Posted by: JiggaDigga at April 6, 2006 09:48 PM