Solid Negotiation Skills

If you want to advance in your career, it's important to learn to negotiate well.

Negotiation is the process of reaching an agreement through discussion between two or more parties with differing views on, and expectations of, a particular issue. Good negotiations achieve a balance between the parties’ objectives, resulting in a “win-win” outcome.

Negotiation can be “competitive” or “collaborative.” In competitive negotiations, the negotiator wants to win and really doesn't care if the other party loses; competitive negotiations can ultimately end in confrontation. In collaborative negotiations, the objective is to resolve any conflict by reaching an agreement that is acceptable to both parties and maximizes mutual advantage.

There is no one right way to negotiate, and the style you develop will be one that makes you comfortable. Most negotiations will include both collaborative and competitive approaches. If you are negotiating the terms of an ongoing relationship (rather than a onetime deal), you will naturally want to lean toward collaboration rather than competition.
What You Need to Know
What should I expect in a competitive negotiation?

The tension in this type of negotiation is palpable. A party who uses a competitive approach is clearly out to get the very best deal for him- or herself—the other party’s objectives tend not to be considered. If you find yourself involved in a competitive-style negotiation, bear in mind the following:

* Opening. Avoid making the opening bid if at all possible, as it gives away a great deal of information. Try not to tell the other party too much—it may be used to your disadvantage later—and try to control the meeting’s agenda.
* Concessions. Conceding in a competitive situation is seen as a sign of weakness, so concede as little as possible. The size of the first concession gives the opposing party an idea of the next best alternative, and tells the party just how far to push you.
* Conflict. If conflict flares up, negotiators need to use assertiveness skills to stay on top of and defuse the situation.

What should I expect in a collaborative negotiation?

Some people see negotiation as a battle with a winner—the stronger party—and a loser—the weaker party. In some negotiations, such as in industrial disputes which result in strikes, nobody wins; there are only losers. Negotiations need not be this way, however. In collaborative negotiation, conflict is minimized, because the idea is to reach a solution in which everyone benefits. A collaborative approach tends to produce the best results, mainly because the parties communicate much better. In addition, a collaborative approach results in a better relationship between the parties—a desirable outcome if they need to continue to work together.

The opening will involve gathering together as much information as possible as well as disclosing information so solutions can be developed that both parties find acceptable. To achieve this you should:

* consider a number of alternatives for each issue;
* ask open questions (which do not have yes/no answers) ;
* be flexible;
* help the other party to expand their ideas about possible solutions.

Both parties will make concessions if necessary, attempting to trade things which are cheap for them, but valuable to the opposing party, in return for things which are valuable to them (but which may or may not be cheap for the other party).

By listening, summarizing, paraphrasing, and disclosing, (for example, “I’d like to ask you a question…” or “I need to tell you that…”), conflict in collaborative negotiations is kept to a minimum, resulting in win-win situation.
What to Do
Prepare

Negotiations can be stressful and, as is the case in many business situations, good preparation will help to reduce that stress and can be key in reaching a satisfactory result. Begin by defining specific, achievable, and measurable objectives. You need to have clear in your mind what your expectations are, that those expectations are realistic, and that their results are easily assessed. Start by writing down and prioritizing your objectives. You might want to classify them as “must achieve,” “intend to achieve,” and “like to achieve.” Say, for example, that your office photocopier, which was repaired only a week ago, has broken down again, and you need to go to your supervisor to approve any expenditure. Your objectives can be defined as:

* Must achieve: The use of a photocopier that works.
* Intend to achieve: Get the photocopier repaired again.
* Would like to achieve: Get a new photocopier.

Before you enter into a negotiation, obtain all the information you can relating to the subject under discussion. The person who does his or her homework usually fares better in negotiations. For example, two people who have each prepared an important document need to have their documents processed by the only desktop publishing specialist in the company, then couriered to their destinations by noon the following day. However, only one document can be completed before the daily courier collection at 4 p.m. The two could waste time arguing over whose document is more important, miss the deadline, and both “lose,” or the senior employee could pull rank but, in the process, risk losing the “loser’s” future cooperation. If they make a phone call, however, they will learn that the courier service runs an optional 6 p.m. collection, that guarantees delivery before 11a.m. the next day— the information they need to achieve the win-win situation they are looking for.
Begin the Discussion

At the beginning of any discussion, the parties should explore each other’s needs and make tentative opening offers. Offers must be realistic and both parties must cooperate in order for the negotiation to progress and conclude successfully. If, however, one side takes a competitive approach and the other does not, problems may develop. If you become involved in a negotiation in which the other party takes a competitive approach, you need to listen carefully for clues as to what the other party’s ultimate objective is, and be careful not to reveal too much too early in the discussion.

An opening statement is a good way for each party to introduce his or her main issues, and allows the discussion to develop naturally. At this stage, you are discussing, not negotiating, the issues. You want to develop a relationship with the other person. Asking questions can help to identify the other party’s needs and keep things moving. The questions should be open-ended so that the person can reply fully. not closed questions to which he or she can only answer “yes” or “no.” For example, you could begin by saying “Tell me your ideas about [the issue under discussion].”
Make a Proposal

Once each of you has had chance to assess the other’s position, it is time to exchange proposals and suggestions. Remember that you need to trade, not just concede things. The following phrase is a good one to remember: “If you [give to, or do something for, us], then we’ll [give to, or do something for, you].”

Look for an opportunity to trade something that is cheap for you to give but is of value to the other party in return for something that is valuable to you. For example, if you are a painter who needs to rent a reasonably priced apartment, you could negotiate with the landlord to paint certain rooms in return for a reduced rent. Or say you want to hire someone to write an article promoting a new product and cannot afford to pay the price the writer has in mind. If you or your business has a Web site, you could offer to put a click-through link from your Web site to the writer’s site so that people who read the article can find the author if they are looking to hire someone to write and article for them.
Begin Bargaining

After discussing each other’s requirements and exchanging information, the bargaining can start. Generally speaking, the more you ask for, the more you get, while the less you offer at the beginning, the less you will have to concede. For example, you have something to sell to another party. You know you have a premium product, but you are not sure how much the other party is authorized to spend. If you know you would be happy to sell for $200, you might want to start off by asking $300, knowing that:

* you will look as if you are giving ground to the other party;
* they will think they are getting a bargain;
* you may even get a better deal than you had thought!

If conflict should arise at the start of the bargaining, explain that your opening position is just that, an opening position and therefore not necessarily your final position. Ultimately, the parties will reach an agreement only when they find an acceptable point somewhere between their respective starting positions.

Be very specific when you make an offer. Avoid words such as “approximately” or “about,” as an experienced negotiator will see your lack of precision as an opportunity to raise the stakes. For example, if you can go no higher than $600 for something, say so, or before you know it, the other party will be pressing you to go to $700.

Similarly, when the other party makes an offer, be sure you know exactly what it includes. For example, if you are negotiating with a supplier, ask if the cost the supplier is quoting includes delivery, sales tax, and so on. Clarify anything you are unsure of and see that the offer matches all the requirements that you set down when you prepared for this negotiation.
Communicate Clearly and Openly

When you negotiate with someone face-to-face, use open body language and maintain eye contact. Avoid sitting with your arms folded and your legs crossed, for example, and think through what you are about to say before you say it. Avoid language that will annoy the other person. Even if you think someone is quibbling or being petty, do not say so. Using words like “quibbling,” “petty,” or “cheap” will only make the situation worse. Do not be sarcastic or demean the person, or his or her position or offer.

Similarly, if you see the main discussion losing focus and people making asides to colleagues, address this by saying “I sense there’s something you’re unhappy about. Would you like to discuss it now?”
Practice Active Listening

Sometimes when people are nervous, they become so focused on what they want to say that they do not pay close attention to what others are saying to them. This can cause all manner of misunderstandings and problems during negotiations. Active listening is a technique that can improve a person’s general communication skills and can be particularly helpful in negotiations. To become an active listener, practice the following:

* Concentrate on what the other person is saying, rather than using the time to think of a retort of your own.
* Acknowledge what others are saying by your body language. This can include keeping good eye contact and nodding.
* Emphasize that you are listening by summarizing your understanding of what the other person has said and checking that what you understood is what the communicator intended to convey.
* Empathize with the communicator’s situation. Empathy is about being able to put yourself in that person’s shoes and imagine what things are like from his or her perspective.
* Question and probe to bring forth more information and clear up any misunderstandings. If you want to explore someone’s thoughts more thoroughly, open questions are helpful. “Tell me more about…?”, “What were your feelings when…?”, “What are your thoughts…?” These questions encourage the speaker to impart more information than closed questions, which merely elicit a “yes” or “no.”
* Do not be afraid of silence. We often feel compelled to fill silences, even when we have nothing to say—yet silence can be helpful in creating the space to gather thoughts and prepare for our next intervention.

Request a Break

A short break may be necessary if a negotiation is proving to be more complex or contentious than you had expected or if the parties have reached an impasse. A break of 10 or 15 minutes will give everyone an opportunity to regain their composure, step back from the issues, and return to the discussion with some fresh ideas.
Reach Agreement

As the discussion continues, listen for words such as “maybe” or “perhaps”—these could be indications that you are close to an agreement. Also watch for nonverbal signs, like papers being put away or laptop computers being shut down. Now is the time to stop bargaining and begin summarizing what the parties have discussed and agreed to.

The summary is a key element in the negotiation process. It ensures that everyone is clear on the agreement that has been reached and gives all participants one final opportunity to raise any questions they may have. It is important that there be a written record of the agreement. While all the terms are still fresh in your mind, send a letter to the parties that sets out the following:

* the terms of the agreement;
* the names of those involved;
* relevant specifications or quantities if applicable;
* any money amounts agreed to, for example, prices or discounts;
* individual responsibilities;
* agreed time schedules and deadlines.

What to Avoid
You Begin with an Unreasonable Offer

Both parties need to see a fair chance of getting a satisfactory result from the negotiation process. If you start with an unreasonable offer, you risk shutting down the process before it starts.
You Begin without Enough Information about the Other Party’s Wants

You need to use the early information gathering process properly in order to ensure that you have a broad view of the points you may need to concede, and those you want the other party to concede to you. These are your bargaining chips when the real negotiation process begins.
You Become Angry

Some people are much easier to negotiate with than others, and the last thing you want to do is get into a bad-tempered shouting match laced with sarcasm. If someone is rude to you during a negotiation, do not take the bait no matter how tempted you may be. Instead, address the person politely but assertively, and challenge him or her behavior. Say something like “I think that comment was inappropriate and unhelpful. Shall we return to the issue?”
You Rush the Process in Pursuit of a Quick Agreement

Both parties need to feel comfortable with the pace and direction of negotiations. The other party might need time to consider more carefully the impact of conceding a certain point or option, before moving on. You should respect this need, while still making sure to observe a flexible—but not open-ended—timeframe for resolution.

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