Negotiation s a skill that is central to all occupations and one that is used every single day. Negotiation is both an art and a science – and hence requires both careful planning as well as tact in execution. As an entrepreneur your typical work day would involve you negotiating with your existing and prospective customers, vendors, partners, employees, financers and so on. Negotiation is inherent to how you go about growing your business and it is important to constantly evaluate your environment and how you respond to it. Your ability to negotiate may mean the difference between success and failure.
Negotiation is a process, not an event – involving various phases. The first involves planning, preparation and analysis. This is followed by relationship building. Next comes the information exchange that includes a first offer, counter-proposals, persuasion, concessions and compromise. Finally, there is the agreement.
Through our various interactions with entrepreneurs, we were able to generalize some common tips on what it takes to be a successful negotiator. Let’s outline a few important tips on building an effective negotiation strategy implementing it
- Clearly articulate the issues that you are negotiating about and the objective. It is helpful to identify and distinguish the key issues from the peripheral ones.
- Before you sit on the negotiations table – do your homework – it is critical to understand your counterparty’s objectives, his motivations, thought process and probable approach. Find out as much as you can about him – not just professional achievements – but his DNA as a person – his interests, his influences, likes, dislikes, common talking points, etc.
- Assess bargaining strengths and weaknesses for yourself and your counterpart. Knowing how much to bend and how much to push is important as this sets a boundary for your negotiation agenda.
- Draw up a wish-list or expected outcomes. Then prioritize them. Recognize what is a must-have and what is not. Against your prioritized wish-list it would also be helpful to pen down what your counterpart’s reaction is. Similarly you could run this exercise the other way around – putting yourself in the other party’s shoes. Identify potential trade-offs or concessions on both lists.
- Prepare yourself – be ready to deal with conflict. The goal in negotiation is to respond without reacting, which can be difficult if you are an emotional person or dealing with an extremely close issue. Being deliberately slow, taking pauses in-betweens to reflect and reassess and deep breathing is helpful to maintain a calm disposition. Sometimes getting a mediator to represent an unbiased view can be helpful too.
- Work with, not against, the person on the other side. Use your best communications skills; be clear and concise. Ask open-ended questions, then be quiet and listen. Be flexible and open to unseen possibilities. Negotiation borne out of harmony is far more successful for all parties involved rather than decisions made out of haste or impatience. Be patient and keep a cool head during your negotiation process. It is important to remember that you have to “give something to get something” – the best solution is one that balances everyone’s expectations.
Conflicts are an everyday occurrence at is important to realize that every outcome may not go your way – you win some and lose some. While negotiations can help you find a mid-path and an amicable solution at many times, ready yourself for events not unfolding the way you had desired. At the end, you have added one more experience to your learning curve. There is another battle waiting for you’re the next day.
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