BackThere are certain principles that one can follow in order to negotiate a successful outcome.
Negotiation is both an art and a science, one which requires the skillful mastery of influence through persuasion, rather than coercion, for the purpose of reaching a desired agreement without excessive sacrifice and/ or compromise.
We should not be haggling as if we were in a market. The art of negotiation is an elevated journey of understanding your position and that of your counterpart. The following principles shared by Tim Cullen will help you along your journey towards stronger negotiation strategies:
1. Positions vs interests
Positions are openly stated goals. Both parties are aware of the outcome each other wants. Interests on the other hand, are the underlying concerns on which stated positions are based. One must remember that negotiators have multiple interests and understanding their interests allow you to make mutually beneficial trades and seek a win/win outcome which is sustainable and in the best interests of both parties.
Dig deep to find out as much as you can about your counterparts interests. Ask why when your counterpart states their position so you can learn their underlying interests. People may have different reasons for wanting the same thing that is stated in their positions. Empathise with the counterparty, put yourself in the other side’s shoes and try to understand what pressures are they under and exactly what do they need from negotiation. Interests are drivers for positions, learn to negotiate at the deeper level of the counterpart’s decision making process. Positions are the text, whereas interests are the sub-text. Influence operates on both levels.
2. Identify key goals at the outset
Do not walk into a negotiation without a clear idea of the exact outcome you wish to achieve. Ensure that you prioritise your interests and group them into long term and short term plays for a clear understanding. You also should ensure you differentiate between your needs and wants. Possessing a clear goal allows you to steer the negotiation process.
3. Trade on differences
Both parties may desire the same outcomes but for different reasons. They may perceive the same issue differently. There also may be an imbalance between the two parties where there is a higher value placed by one party and the other party may perceive it as a low cost outcome. A billion dollar company may not place a high value on a 5% salary increase during a recruitment negotiation but may place a higher value on the candidate being able to start their job immediately due to a chronic staff shortage. The candidate may rank a higher salary as more desirable and willing to start earlier with the employer. True value is created by trading on these differences. Negotiation needed be a zero sum gain, do not focus on the fixed pie bias. Think laterally to grow the pie rather than fight for the existing pie on the table.
4. Know your BATNA (and theirs)
In addition to knowing your desired outcome, you should also know your “best alternative to a negotiated agreement” (BATNA). This could involve walking away, stalemate or even conflict. You should also put yourself in your counterparty’s shoes and think about what their BATNA can be and during the negotiation probe them so you can understand their BATNA. You then can extrapolate by assuming that both parties will negotiate successfully if they receive better terms during the process than their BATNA. BATNA defines a “zone of possible agreement” (ZOPA). The better your BATNA appears both to you and the other party, the stronger your position to negotiate agreement Lastly, do not reveal your BATNA.
5. Preparation is key
The negotiation process is kicked off by extensive research, always do your homework. Delve deep into both your interests and the other sides interests. Write down what your offer should be.Map all the interested parties and understand where the influence lies in the counterparty group. Identify potential allies and blocking coalitions so you can tailor your approach accordingly.
6. At the negotiating table
It is better to make the first offer as it serves as an anchor of focus. However, if they beat you to it, then ignore their initial offer and propose a counteroffer instead. Try to bring as many issues to the table as possible so you can use the issues as material to concede and give them their psychological wins especially if the issue has a low value to you. Do not agree or settle on one item at a time on a list as you do not wish to settle too soon, instead move the negotiation forward on each issue and then park it and move on. Try grouping issues together and make reciprocal packages trades based on high value and low cost. When the counterparty makes requests, always ask why to understand their interests which underpins their positions.
Keep your cool and do not walk away if you become angry. Keep your cool and do not allow your emotions to betray you by giving visibility to your underlying interests. Making threats is also unwise as you should have the long term view that the relationship may exist post-negotiation and you need to ensure there is sufficient trust and goodwill that is conducive to a good working relationship. Think like a chess master and plan two or three moves ahead with your concessions and demands. You may wish to use contingency clauses in contracts when there is future uncertainty or even consider negotiating a post-agreement improvement over a period of time.
One piece of advice I was given by a client who attended a Harvard programme on negotiation was to seek for a mutually beneficial agreement otherwise a zero sum approach will underline the sustainability of the agreement and the loss felt by the counterparty will erode trust. Trust is critical in business relationships and therefore approaches to negotiation should be with a long term view in mind.
Tim Cullen is the founder of The Oxford Programme on Negotiation at Said Business School, Oxford University.
