The Basics of Negotiation

Conducting Negotiations.

Dictionary definition of 'Negotiation'

"Negotiations are formal discussions between people who have different aims or intentions, especially in business or politics, during which they try to reach an agreement"

What this means is that negotiation is a series of moves designed to help you achieve your goals – while at the same time bearing in mind the other parties needs.

Negotiation has, basically, two outcomes:

  1. A win – win situation for both parties. Here both achieve some, if not all, of what they want. The win – win outcome can lead to profitable, long term relationships.
  2. A win – lose outcome. This is an adversary situation where one side wins and the other loses. If used it would be in a "one shot" negotiation, where the sales person or negotiator would not have worry about future sales.

Successful negotiations do not happen by accident or on the spur of the moment. They must be carefully planned. To this end there are a number of steps that can be taken to help in the process.

Goal Orientation.

Goal Orientation is the first step on the road to a successful negotiation. Before you can go anywhere you need to know where it is you're going !! So you have to start this journey with the end in mind:

Objectives and Targets.

This is where you establish your actual requirements. Ask yourself;

  • Exactly what do I want from this negotiation?
  • What do I have to get to meet my needs?
  • What am I willing to give up to get what I want?
  • What are my time and economic requirements for this negotiation?

At this point you need to determine what you will or will not accept as a final outcome:

  • Ideal Outcome – Aim high! "This is what I would really like to come away from the negotiation with".
  • Realistic Outcome – It is, usually, unlikely that you will achieve your ideal outcome, so this is a realistic expectation of what you will end up with. "I would really like to have abc – but I am happy to settle for xyz."
  • Fall back Parameters – This is the minimum that you will settle for. "I will not accept any less than xyz."
  • Unacceptable Outcome – At this point the negotiation has failed to achieve a reasonable outcome.

With your negotiation objectives and targets firmly identified you have a sound base to work from. You know your upper limit and, more importantly, your lower limits – and you MUST NOT BE MOVED from this.

Preparation.

Preparing for the negotiation is the most important aspect of the planning stage and can make the difference between success or failure.

In preparing you will need to look at three issues:

  1. Knowledge
  2. Anticipation
  3. Conflict

Knowledge – is, as they say, power! The more you know the better you will be able to negotiate. Knowledge that you should secure before entering into negotiation could include such things as:

Detailed background information on the company you are negotiating with

  • How big are they?
  • Are they in growth or decline?
  • What is their position within a wider industry?
  • Are they already dealing with your competitors ?.
  • What area their strong points?
  • What are their weak areas?

Information, if available, on who will be negotiating on their behalf.

  • What positions do they hold?
  • What are their personality types?
  • Do they have any weaknesses?
  • Are they liked or disliked within their own organisation? Why / Why not?

General information about the industry that you are both working in.

  • Current trends
  • Industry growth or decline
  • New entrants into the field

Know your own parameters.

  • What are you prepared to do without?
  • How far are you willing to drop your expectations?
  • What do you have, that they might want, as trade offs?
  • How much will you be willing to give away?
  • What are your strong points?
  • Where are your weak areas?
  • What is the supporting framework for my position?

Know how you are going to make it work from your end.

  • If internal action is required on your part at the successful completion of the negotiation, are systems in place or ready to take that action?

Where will the negotiation take place

  • What are the advantages / disadvantages to using your premises?
  • What are the advantages / disadvantages to using their place?
  • Should you meet in neutral premises?
  • What facilities will be available?

Who will be part of your team

  • Will you negotiate alone, or in a team?
  • Will these people cover a cross section of your company so that issues can be addressed immediately?
  • What level of management will be represented?
  • What are the individual team members strengths and weaknesses

Anticipation – In addition to having as many facts as possible you will also need to anticipate what the other side is likely to do:

  • What are their objectives?
  • What are their ideal, realistic, fall back and unacceptable outcomes likely to be?
  • How will I determine what their needs are as compared to what they want?
  • What are the issues as seen by them?
  • How will they support their position?
  • What do they have that you might ask for in trade offs?
  • How far might you be able to push them on certain issues?
  • What issues might they raise with you?
  • What might they ask you to give up?
  • How will they react to certain issues?

Anticipating the above (and other) issues will help you greatly.

If you have done your homework carefully and made your assumptions based on good background information and knowledge you should not be caught unawares and will not have to make hasty concessions to make up for unexpected issues.

Conflict – You will also need to prepare for conflict. As much as you would like to get through a negotiation without it – it is unrealistic not to anticipate it and prepare for it:

You should consider such things as:

  • What will the major points of conflict be?
  • What parts of our proposition, will they be likely to attack?
  • What tactics will you use – will you purposely instigate conflict in order to win an issue?
  • How will you attempt to resolve negative conflict?
  • How will you respond to the other sides attempt to resolve a conflict?

A good tool for your preparation is a "Negotiation Planning Form". This will help you focus on the main issues and ensure that nothing is forgotten.

Communication Skills

As a negotiator, you will be required to have an excellent grasp of the business environment that you operate in. These and other business skills are essential to the successful outcome of your negotiation.

One of the most important skills that you must possess however is that of communicating effectively.

Communications experts estimate that only 10% of communications is in the spoken word, 30% in sound (tone, pitch, etc) and 60% in body language.

Listening Skills

Listening is the most important of the communication methods as it allows us, if done correctly, to understand completely what is being said to us. And if we understand completely, then there is little room for conflict due to misunderstanding !!

Listening takes place on 5 different levels:

  1. Ignore. We ignore someone who is speaking to us with no effort made to listen at all.
  2. Pretend. We pretend we're listening, but in reality we're very busy and only giving attention with "half an ear" – making all the correct uh-huh and OK sounds in the right places.
  3. Selective. We only here those things in the conversation that we want to hear. (School children and spouses are particularly good at this !!. And are often heard asking "when did you say that?"
  4. Attentive. Here we are doing all the right things; we are leaning forward, maintaining eye contact, nodding our head in understanding etc and generally displaying a positive listening attitude.

HOWEVER

We, generally, still have not achieved a full understanding of what the other person in saying. Human beings are basically self centred creatures – we adjust our universe so that it revolves around us. What we think and what we have to say is very important to us and we focus most of our energy on this.

The average human being is capable of speaking at a rate of 125 words per minute. The brain is capable of thinking 4 times faster than speaking.

So, in the time that I have said all this to you, you have had time to not only hear what I have said but also to wonder if the traffic is going to be bad on the way home, decide what you're going to have for dinner and remind yourself to take the book back to the library !! But if someone asked you what I had just said you would probably say "Oh she said something about the brain being 4 times bigger than the average person's mouth."!

Even in attentive listening, are we really paying attention? Or are we, while the other person is talking, already thinking about our response and our busy minds are silently working out what we're going to say?

Very few people use the 5th level of listening:

5. Empathic

So what exactly is empathic listening?

"Seek first to understand, then to be understood

Steven Covey

The Seven Habits of Highly Effective People

This sounds simple enough – but it requires a deep shift in our way of thinking as we usually do the reverse, trying to make other people understand us, without making much effort to understand them.

When we talk about listening with empathy, we mean listening with the full intention to really understand the other person and their point of view. When we listen with empathy we put ourselves in the other person's place, we:

  • shift the focus of the conversation on to them,
  • show genuine interest and caring
  • respect their point of view.

Empathic listening is very powerful. Instead of projecting our own thoughts, feelings, motives, interpretations and assumptions we are instead dealing with the reality inside someone else's head and heart.

Questioning Techniques

If we are going to try and truly understand another person we also need to ask questions. To do this effectively is also an art form – it's the difference between a conversation and an interrogation.

There are a number of different types of questions that we can use to gain information. Some of these are:

Open questions:

An open question is used, usually at the beginning of a conversation, to gain maximum information. It is a broad question that encourages a person to speak freely ie:

  • "What do you think …."
  • "Why do you feel …."
  • "Tell me about ….."
  • "What else can you tell me about …"

Open questions usually start with: what, why, which, where, how, etc.

Clarifying Questions:

A clarifying question is one that you ask to;

  • make sure that you have understood what has been said
  • re-cap what you think the conversation has been about
  • ensure that you are both talking about the same thing.

Example:

"So what you're saying is …."

"If I understand correctly, then if I ….."

Leading Questions:

These are questions that you can use to deliberately steer the conversation in the direction you want it to take. If you are looking for a particular outcome – then a leading question can help you get it, ie:

  • "So, we agree that we should ….."
  • "Do not you think that this would be …."
  • "If I do xxx, then will you …?"

Closed Questions:

A closed question is one that requires only a yes / no or short sharp answer and usually starts with: do, can, is, are. These are commonly used at the end of a conversation to summarise and to gain final agreement, ie;

  • "Is this what you wanted?"
  • "Are we agreed that …."
  • "Can you tell me …."

Non-verbal Language

Non-verbal language – These are the subconscious signals that we send out with our spoken communication and can take on many forms:

When communicating with other people we encode our message with a whole range of signals that will either support our words – or – show up our insincerity (we do not mean what we say). These signals can be seen (generally) as some of the following:

  • Eye contact
  • Gestures
  • Facial Expression etc

Eye contact is an important component in communication. It indicates that a person is listening to you, is interested, cares what you have to say and is a good sign of a positive listening attitude. Someone who will not meet your eyes makes you feel uncomfortable and gives you're the feeling that you can not trust them.

Gestures are also a way of expressing what you really think and feel. A person who is open and honest about what they are saying / doing will use open gestures – arms outspread, palms upward. People who are uncomfortable or defensive may be seen crossing arms and leaning back, touching their nose or mouth, loosening a collar, shifting sideways in their chair etc. Shuffling of papers on a desk and glances at watches are signs that a persons patience may be about to run out.

Gestures in isolation can be misread. A person crossing their arms is not necessarily defensive, they may just be cold. We should therefore look for "clusters" of gestures ie crossed arms, no eye contact, leaning back – before we decide if the person is being defensive or has something to hide!

Tone and pitch of voice

The tone and pitch of a persons voice can also be indications of what they are thinking and feeling.

  • Tone can be filled with enthusiasm, arrogance, whining, demand, pleading etc and can tell, despite the words spoken, what a persons frame of mind is and how receptive they are to what is going on.
  • Pitch is equally as telling – the higher the pitch, the more emotion involved. This can be positive or negative.

Rate of speech

As with the above the rate of speech is an excellent indicator of a persons current feelings – the faster the rate the more emotion involved. This can, once again, indicate enthusiasm or anger and we need to look for the clusters of signs. A person might speak fast naturally, but if the fast rate of speech is accompanied by a high pitch, aggressive body language such as sweeping arm movements – your person is very probably upset !!

Physical appearance / presentation

The way in which you present yourself physically can also say a lot without a word being spoken. Experts tell us that we have three (3) seconds in which to make a first impression – the following 3 minutes are then used to consolidate the impression made. After that, it's written in stone and very hard to change. So when communicating to make an impression it's important to look at:

  • Cleanliness
  • Hair
  • Clothes
  • Confidence
  • Smile
  • Posture

Although it may be grossly unfair to the individuals involved a man wearing work overalls will not be "looked" at in quite the same way as an airline pilot in full uniform.

What should your personal presentation tell people about you? It should tell them that you are confident, that you care about yourself and that you are in control !!

Environs.

The environment in which the conversation is taking place can also be a form of "non-verbal" communication The level of your importance to the person you are meeting with can sometimes be gauged by;

S pace

Where is the meeting taking place; in a public place, socially or on personal ground.

Meeting Environment.

Are there other people present. Do they need witnesses or are they trying to intimidate … or maybe they want you to meet their staff or friends. You can determine which one of these apply by reading the other gestures and signals that are being sent out.

Time

  • Is the other person on time or have they kept you waiting unnecessarily long.
  • have they sent apologies for the delay or
  • have you just been left to sit and wait.

Seating Arrangement.

Where have you been invited to sit; on a chair in front of the desk, beside the interviewer, in the office lounge area … etc.

These are only a few of the many "environmental" ways in which we can send messages and display "listening attitude".

Listening attitudes are extremely important in the communication process. A positive listening attitude will help you gain a full understanding of the issues at hand and help to reach your goal. A negative listening attitude on the other hand can throw up all kinds of barriers, lead to confusion and in some cases hostility.

Communication Barriers

Sometimes situations occur that get in the way of effective, two way, communication and stop us from reaching an understanding. These are called communication barriers and come in all sorts of forms.

How do conflicts happen? They will often occur when we let emotions get in the way, or when we misunderstand someone. We then adopt a "negative listening attitude" and erect barriers which stop the communication process.

In order for communication to flow freely, these barriers must be recognised and removed or overcome.

Some of the more common barriers we use are:

  • Not paying attention
  • Not looking at a person
  • Interrupting
  • Making assumptions
  • Jumping to conclusions
  • Tone of voice
  • Generation gap.
  • Lack of confidence
  • Sarcasm
  • Rudeness
  • Past history
  • Cultural differences.
  • Physical Barriers:
  • Noise
  • Eye sight
  • Tiredness
  • Stress

Once again, we come back to listening attitudes. Positive or negative, which one will get you the results you want?

The Negotiation.

You have determined your objectives and targets. You have, now, also prepared your negotiation, so you know as much as possible about the other side and you have anticipated their reaction to a range of issues – so – now it's time to get down to the actual process of negotiation!

Negotiating Principles.

There are certain moral rules and actions you should follow in your negotiating. Here is a digest of points you should firmly keep in your mind throughout.

Negotiation is the act of bargaining towards a mutual agreement.

  • Both sides must feel they have won
  • Both sides achieve what they feel is important.

Negotiation must take place between equals.

  • Ability to make matching decisions by both sides.
  • Titles may be different – but authority should be equal.
  • Establishes mutual respect.

Common respect for the rules of the game

  • Be yourself, discuss – do not debate.
  • Do not attempt "one-upmanship"
  • Avoid domination.

Put your cards on the table.

  • Do not pretend to have negotiating power you do not have.
  • Declare what you can or can not do.

Be patient.

  • Rushed decisions are rarely good ones.
  • Be prepared to take time, do not hurry. A successful outcome will be worth the time.
  • Delay is better than a bad decision.

See the other side's case – unemotionally.

  • Use empathy.
  • Do not become emotionally involved -it helps you assess the position

Communicate.

  • Be open, disclose you motives and self-interest. Beating around the bush wastes time that could be better used on other things.
  • Lay it on the line and let the other side do the same.
  • Do not be obscure – get to the point.

Avoid confrontation.

  • Do not put yourself in a position from which you can not retreat.
  • Do not row – it makes negotiations impossible.
  • Avoid showdowns.
  • Stand firm – but calm.
  • If you disagree, do so from the "Devil's Advocate" stance.

Give concessions a bit at a time.

  • Never concede everything – or – nothing.
  • Give slice by slice
  • But get return concessions – "if you do …, I will do …"

Know when to leave well enough alone.

  • Rarely an ideal solution, so do not pursue:
  • What is beyond your reach
  • What is too costly
  • Something that takes more time than you can afford.

Declare company strategies if you must, but not objectives.

  • Objectives, personal motivation and needs must be kept secret.
  • Do not compromise your ultimate objective.
  • Set highest and lowest negotiating objectives.
  • Do not settle below the lowest point.
  • Lose rather than gain a worthless deal.
  • Never relax your guard.
  • Stamina; hallmark of a good negotiator.
  • Stalling techniques are used to see if you'll crack
  • Bide your time in duels!
  • Always rehearse your case – and theirs.
  • Before the actual negotiation go through a role play exercise dealing with the how, what and when issues of the negotiation.
  • Do this from your perspective and then role play the scenario from the other sides perspective
  • Doing this could eliminate unpleasant surprises and unexpected issues ..
  • Do not underestimate other people.
  • Pretence at not knowing – to mislead.
  • Respect confidence given during negotiating.
  • Essence of negotiation is mutual trust.
  • End negotiations positively.
  • Endeavour to part without regrets on either side.
  • As per point 1: both sides must feel they have won.

The 4 Commandments of Negotiation.

In all your negotiating you should pay particular emphasis to these 4 activities:

  1. Aim High – You can always trade down, never up – so start with you highest expectations.
  2. Get the other fellows total shopping list before you start negotiation – Getting to know what the other side wants bit by bit is not only time consuming but it could also cost you more than necessary .. Negotiating each issue separately requires the "give and take" for each one. If you get to know all the demands the other side is likely to make, you can then view them all together and negotiate accordingly. Getting the full shopping list is aided by good questioning techniques: ie; "We can meet you on this issue. The only thing is, however, for you to obtain the best possible concession on it, we may need to tie into what you yourself called the 'total package'"
  3. Keep the whole package in mind all the time – As discussed in the above point, negotiating "items" is not advised. You need to keep the big picture in mind at all times. In this way, you keep a better control of what could other wise become a labyrinth of issues and you also keep control over the number of concessions that may need to be made.
  4. Keep searching for variables – Do not give concessions unless you have to. Be creative and comfortable in suggesting ideas and alternatives. Look for inventive ways to clear the "handlers" you will meet. These are people who may have some influence over decisions but not the ultimate decision making power.

The Do's and Don'ts of Concessions.

Concessions are not by and in themselves positive moves. They can become obstacles to a solution. However always remember the basic rule of negotiating – you must give something in order to get something.

  • Make sure you've got the total shopping list before beginning to make concessions.
  • Never accept the first offer
  • Give yourself room to make concessions. Start with your highest expectations – what you would like to achieve. You can then, if you must, work your way down to what you intend to get and what you must get.
  • See to it that they make the first concession on major issues.
  • Conserve as long as possible. Do not advertise your willingness to make concessions.
  • Start small, but imply flexibility.
  • Tie your concessions to them; "If we do this … then will you do that …?"
  • Make the best deal from your concession. Milk it. "What nice people we are!"
  • Trade your concessions – do not donate. Make sure they know the value.
  • Know the costs of your concessions.
  • Keep score of concession – too many and to fast?
  • You CAN take them back and re-negotiate if necessary. Withdraw if it no longer fits the bill.
  • Say "No". You do not have to agree to all the concessions they seek.
  • Never tell them afterwards that they conceded too much! Remember, there's always a next time.

The Role of Time.

Time is;

  • The standard of progress
  • The ally of the less pressured side.
  • A resource to spend and conserve wisely.

Time pressures make you lower your targets and make concessions.

Take time to prepare – or you are donating a concession already.

Time, reflected in an unhurried, cool relaxed way = command!

Rush if you believe you are more skilled and in a win / lose situation.

Deadlines

Are your deadlines self inflicted? There are objective deadlines like court dates, expiry of lease etc.

  • Deadlines are useful tools in that they enhance concentration and force decisions. They avoid the game playing and bluffing.
  • Agendas also help issues and give a sense of order.
  • Deadlines should always be taken seriously.
  • Opponents have deadlines – try to discover them ie: "I'll need to put together a proposal for that – when is the latest I can get it to you?"
  • Do not disclose yours.

Duration.

When to negotiate and for how long.

  • Get joint agreement – but when it suits you.
  • The other side is slowing down or stalling? The counter tactic is probably an ultimatum!
  • Play with time – tactically. Increase pressure through short periods only, with long time intervals.
  • Who MUST be present during the negotiation? The more people involved the long the process will take.
  • Time does erode aspiration levels – the longer it takes the harder it gets.

Deadlocks.

Deadlocks are an ever present threat that paralyse, retard and cause total re-thinks. They generally occur because of people – hopes, attitudes, fears, interests and inhibitions are all interwoven.

The fear of deadlock dampens a negotiator; intimidating them to say "yes" too early. Deadlock can be "stage managed" – an appearance merely to win a concession. It can also be unintentional – you merely stumble into it.

Until resolved – there will be no movement from either party.

To avoid deadlocks:

  • Relax and worry less about them. (You can not win them all!)
  • If you worry, it shows and they will massage you into conceding a point.
  • You will not avoid deadlock by conceding in search of goodwill or crawling in search of friendship.
  • Be ready to meet it. Be confident when you do.
  • In dealing with threats – consider their likelihood of doing it.
  • Do not use provocative behaviour
  • Do not go public beforehand
  • Do not bee too strong for too long on your opening position
  • Avoid their strengths.
  • Make positive proposals.
  • Use variables creatively. Re-package. Consider changes
  • Give signals that your would be willing to move on.
  • Agree to disagree and move on
  • Take a break
  • Discuss informally elsewhere
  • Replace team members if the chemistry is bad.
  • Bring in a mediator. Take the role yourself.
  • Do nothing – be patient.

Qualities of a good negotiator

  • Patience.
  • Ability to think on feet and remain cool
  • Open minded and flexible
  • Inventiveness and creativity
  • Perseverance
  • Ambitious
  • Self Confident
  • Listener
  • Perceptive
  • Knows how to perceive and exploit power.
  • Self control
  • Analytical mind
  • Persuasive
  • Courteous, personable and tactful
  • Reasonable, rational and realistic

Follow Through.

Before leaving the negotiation venue, you should make sure that what you understand the agreement to be, is indeed what the other side thinks it is also !!

During the course of the negotiation, someone will have (or should have!) Been delegated to take notes. At the end of the negotiation a summary should be made clarifying each point. This is very important as this is the information that will eventually end up in the written agreement or contract between the parties.

Activities in Implementing

Another aspect that needs to be looked at both during and after the negotiation is – how will the agreement be implemented and who will be responsible for implementing it. Issues that need to be looked at could include:

  • Key people are involved.
  • Training and user manual needed.
  • Time frames and deadlines can be met.

Source by Lee Perlitz

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