Negotiate from Strength – the art of negotiation in business
Scott Smith
Negotiations start before they begin. And the results are often decided before the first face-to-face confrontation.
That’s because successful deal-making depends largely on preparation.
Amazingly, many professionals don’t do their homework, says Chester L. Karrass, chairman of Karrass, the world’s largest negotiating training company.
He’s seen and heard far more about failures of that sort than he’d like as both a consultant and the author of some of the field’s classic texts, such as The Negotiating Game and In Business As in Life–You Don’t Get What You Deserve, You Get What You Negotiate.
And don’t think negotiating skills are only important if you’re a union bargainer or corporate vice president, Karrass says. Every aspect of doing business with customers, vendors, partners, bosses, and employees involves give-and-take. You do it whether you’re the buyer or seller of an idea or product. You do it during informal discussions in a hallway or during a project review with several people on each side. Whatever the situation, if you know what’s up in advance, Karrass advises, you’ll get better results.
Let’s assume you’re a small company facing a big decision that involves a formal negotiation. First, you need to find out everything about your company’s proposal and position, as well as everything that can (ethically) be learned about the attitudes, perceptions, and status of the other side, Karrass says. “Fact-finding is the mother’s milk of negotiation.”
Don’t assume anything. Don’t be cocky because you know you have a strong position or because you are in the right on an issue (the Achilles’ heel of negotiation), experts in the field agree.
And if you’re a natural wheeler-dealer, don’t bet everything on technique and charisma, warns Leo Reilly, president of KCR Communications, a training and consulting firm. “At the end of the day, unless you have real expertise, unless you know your subject cold, you won’t do well.” Unless, of course, your counterpart is even less knowledgeable, which you’d better not count on. And while the Internet has helped buyers do research with search engines, price comparison websites, trading exchanges, and company websites, it is generally less useful for sellers, Reilly points out. Both sides can also use industry-related chat rooms, but be careful what you say. The Web lends itself to shoot-from-the-fingertip comments that could shoot you in the foot.
Don’t be so enthralled with the Net that you overlook less sexy sources of information: Standard & Poor’s, industry journals, clipping services, annual reports, trade shows, engineers familiar with the product, and sales reps. Develop contacts you can trust. If you can, visit the other side’s place of business to familiarize yourself with its facilities and to develop personal relationships with others in addition to your negotiating counterpart.
And remember that you’re not just dealing with a corporation. You should find out as much as you can about the individuals with whom you’ll be meeting, Reilly says. “Knowledge of their hobbies, families, dietary habits, religious beliefs, and so forth can be used as ice breakers or to avoid embarrassing mistakes.” The most important aspect of preparation is to carefully consider your opening position, Reilly says. As a seller, begin with a high price that leaves you room to make concessions.
Also, work out the justification for and documentation of your position, Reilly advises. If you keep repeating these during conversation, the other side may soon tire of its “irrational” attitudes.
Be careful about discussing alternatives before or during bargaining, he cautions. “If the other side hears your informal proposal or off-the-record comments, their expectations are set.”
The major mistake many people make in preparing for negotiation is to think in general terms about what one wants or doesn’t want as a result of bargaining, says John Patrick Dolan, an attorney and CEO of negotiation specialist LawTalk MCLE Inc. “Not being very specific will lead to second guessing and dissatisfaction. Write down exactly what your goals are, and then edit this description furiously until it is laser-focused and precise.”
Then do the same for your counterpart. “This exercise tends to be a stumper and eventually a real eye-opener,” he says. However, recognizing commonalities in both positions may lead to creative solutions.
Take a lesson from “the guy who was trying to sell you a car and said he had another buyer coming over in 30 minutes,” Dolan says. If you have to spell it out to a stubborn individual, on the other side of the table, let him know that you’ve done your research and know of an alternative vendor or customer. Once you feel prepared, “practice, practice, practice,” Dolan urges. Get someone to play the opposing party to pick apart your positions. Learn how to read body language and personality styles, he says, recommending NeuroLinguistic Programming, the method popularized by Anthony Robbins in Unlimited Power. Lack of eye contact, lots of “ums,” changes in voice tone, and fidgeting can reveal when the other side is uncomfortable.
And that’s just the beginning of the beginning of preparation, Karrass says. Have you considered these issues:
1. Which of your goals are “must have” vs. “would like to have?”
2. What will you say if the other parry says “no” to your opening offer?
3. What concessions are you willing to make? (Check with your accountant about such issues as payment terms and tax implications.)
4. What credible excuse can you give if you need to buy time to confer with others and/or think about an offer from the opposing side?
5. Who can you bring along to listen to the conversation, ask questions you might not think of, and give you useful advice?
6. What are the limits of the other party’s power over you?
7. What are the laws governing both sides?
8. What has the relationship between the firms been like in the past?
9. What other products and services can you offer or buy that could expand the relationship and put the current deal in a different perspective?
10. What are your long-term marketing goals and their impact on this relationship?
And don’t forget to study the tactics developed over the millennia every time a human being decided he or she wanted what someone else had. Only when you’ve really done your homework and have thoroughly rehearsed, are you ready to play “Let’s Make a Deal.”
Resources
These negotiation training firms can provide further information:
Karrass, 323-951-7500, www.karrass.com. Chester Karrass is the author of The Negotiating Game (Harper Collins) and In Business As in Life–You Don’t Get What You Deserve, You Get What You Negotiate (Stanford Street Press).
KCR Communications, 408-741-2300 or www.negotiatingedge.com. Leo Reilly is author of How to Outnegotiate Anyone (Even a Car Dealer!) (Adams Media Corp.).
LawTalk MCLE Inc., 888-830-2620 or www.negotiatelikethepros.com. They sell John Patrick Dolan’s Negotiate Like the Pros six-cassette tape course.
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