Everywhere I go to speak on the topic of negotiations, I hear the same thing from corporate executives: “My people don’t spend enough time preparing before negotiating.” I wholeheartedly agree. For some reason, people have the idea that negotiating is all about things like charm or the force of personality or the killer instinct. These people go into a negotiation with a brief outline of what they hope to achieve, and then count on their interpersonal skills or the perceived strength of their position to drive the decision in their direction. Unfortunately, this works just often enough to encourage these people to keep repeating this pattern, even though they generally leave money on the table every time without realizing it! It isn’t the most gifted negotiators, or even the most experienced, who are the most successful. The most successful negotiators, day in and day out, are the ones who take the time to be the best prepared.
Believe me, the real negotiating opportunities are won or lost before you ever sit down at the negotiating table. It is during the preparation phase that you set your goals, define your expectations, do your research and construct your strategy. Instead of going in on smile and a prayer and hoping for the best, you must have a plan that will help you respond constructively to any development. Here are a few important issues to address during the preparation phase:
1. Define your negotiation boundaries. This may be the most important single area of negotiation preparation, and it holds the key to success for many of the most effective negotiators. This simply refers to settling in your own mind what is your Wish (the wildest dreams outcome), your Desire (what you think you can reasonably expect to achieve), and your Bottom Line (anything less than this and it would be better to walk away). You also need to already have a pretty good idea of what alternative you would fall back on if you can’t negotiate an agreement (sometimes called a BATNA for Best Alternative to Negotiated Agreement), as well as having an understanding of your WATNA (the Worst Alternative, or worst case scenario, to a Negotiated Agreement). Having all of these issues settled ahead of time will give you much more confidence and clarity once you sit down at the table.
2. Information is Power. Invest as much time and effort as possible to obtain as much information as you can about anything pertaining to the negotiation. Collect as much market data as you can find, learn whatever you can about similar negotiations in your area or your industry. Get background information about the other company or organization. Be the expert on anything that you think might come up during the conversation. This means that you have to start by brainstorming to think of everything that might come up! Don’t be the one caught staring at your legal pad because you don’t have a good answer to a very simple – and important – question. And don’t rely on assumptions! Verify every assumption you are relying on, and make sure it is a fact -- not an opinion. I can’t tell you how often this has paid off for me when I did it – or cost me dearly when I didn’t.
3. If possible, build a profile of the people who will be sitting across the table from you. If this is a high-powered corporate negotiation, this might be compiled into a formal dossier. However, even if it is only a real estate transaction between neighbors, try to make yourself aware of the behavioral tendencies and interaction styles of those you will be working with. The more you know about them, the better you can match your style and pace with theirs, and avoid accidentally creating extra confusion and distractions because you adopted a style that doesn’t mesh with theirs.
4. Identify interests; avoid positions. Interests have to do with the underlying needs each side has, such as a need to expand a parking area, for instance. A position is the one solution that you might think is the best and only solution to the problem – like wanting to tear down a historic building to make room for more cars. Taking a stand on a position tends to stop the process of finding real solutions. During the preparation process, try to identify both your interests and those you suspect are motivating your opposite number. Keep the interests front and center at all times.
5. Don’t forget, this isn’t about winning; it is about Win-Winning! Even during the preparation phase, be looking for opportunities to offer something of value to the other side. What concessions can you give in exchange for the concessions you are requesting? Would they be of lower value to you than what you expect to receive? Would they be of higher value to the other side than what you are asking them to give? That is how Win-Win negotiation works best.
As you can see, all this preparation will take a lot of time and energy. However, I promise you that it will pay for itself many times over once you sit down at the table. There is an old proverb that says, “Well begun is half done.” When it comes to negotiating, great preparation will carry you more than half way to success; it will take you all the way.
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December Negotiation Quick Tip of the Month – Put It In The Right Frame
You have heard it said that a picture is worth a thousand words. It is also true that sometimes putting a few words in the right frame can make all the difference. Most people tend to view the possibility of potential gains differently from the possibility of potential losses. They will usually be cautious when trying to protect a gain or something of value. On the other hand, they may become unpredictable risk-takers if they feel they are about to lose something. In negotiations, threatening people with the risk of loss may trigger defensive behaviors that can derail the whole meeting. Whenever possible, try to match a possible loss with a possible opportunity, so that the other side can see the potential for gaining instead of losing. The meeting will be more productive and less stressful.
