Recently I wrote a post on M&A’s which is a high stakes move for any business and involves the art of negotiation at its finest. Here is my continuation of that same theme.
What is the Art of Negotiation?
In simple terms, negotiation is a discussion aimed at reaching an agreement. But what if you don’t feel confident in your ability in getting the best outcome for yourself? It would be so much easier if everyone thought the same as you did and also wanted the best for you, but that is magical thinking and if it was the case, you probably would not be reading this article! The truth is that in a negotiation, neither party has the winning hand, so if you’re in this situation, what should you do?
- Are you sick of getting to the end of a negotiation and not knowing if somehow, somewhere the wool has been pulled over your eyes?
- Do you worry that when you come to an agreement, there is something you have missed and that the other side is actually getting a better deal than you?
- Do you lie awake some nights feeling like a failure despite the fact that you are outwardly successful?
If the answered yes to any of these questions, keep reading. Through years of experience as a lawyer, I have devised 5 SIMPLE STEPS that you can follow to ensure you are ready to sit at the table and face your opponent, who could be a landlord, a tenant, a romantic partner, a parent, a child (from experience negotiating with a toddler can be difficult for even the most experienced negotiator), a business partner or a neighbour (…the list of possibilities goes on). These are 5 steps you MUST take if you are going to be involved in a high stakes negotiation to get the best possible outcome, and in the best case scenario, deepen your relationships along the way.
Let’s go through the steps, starting at Step One:
STEP 1: Prepare Yourself AND Your Opponent
Do your homework! Know all the events leading up to this negotiation, who are the key players and how they are involved. Be certain about what you want as an outcome and what your goals are. What you want has to remain the main focus of the discussion and not get put to the side – you don’t want to get sidetracked with other issues.
Think about the other party, what they are likely to ask for? What is important to them? What might they be willing to accept or settle for? The more you know about your opponent the more likely you are to be able to counter their arguments and have facts and figures at the ready.
Part of your strategy should entail determining yours and the other side’s Best Alternative to a Negotiated Agreement (BATNA). Your BATNA determines the lowest value acceptable to you for a negotiated agreement. An offer that is deemed higher than your BATNA is to be considered better than reaching a stalemate. Keeping in mind that in order to be successful in your negotiation, your offer to the other party has to be more attractive than their BATNA.
STEP 2: Propose By Observe & Engage
When you meet in person for the negotiation you should know when to be quiet, and you should master this technique. Ask questions but make sure you give others the time to collect their thoughts, while at the same time thinking about how you are going to respond. Listen actively and show respect by not interrupting. The more you can hear them talk, the more insight you’ll gain about their why, and the way they are thinking about this negotiation – and what is actually important to them. It is imperative in understanding how to build the relationship, and keep the negotiation moving forward.
Be sure to take away the urgency to respond as soon as they have finished talking. A momentary pause can work to your advantage as it shows that you’re thinking about what they’ve said, it shows you have control over your emotions and it creates anticipation.
STEP 3: Bargain
When it comes to bargaining, the strategy is simple; don’t give something away and get nothing in return. You will give the other party an opening to get more than what you are willing to give.
If you have done your research and you are negotiating with knowledge then your bargaining power should be significant and you will be more likely to anticipate the weak spot of the other party.
Keep in mind that concessions will inevitably be made by both parties but stay optimistic and focus on getting your result. Studies have shown that an optimistic negotiator is more successful than a pessimist.
STEP 4: Promise and Commit
So you have reached an agreement! That means that you are at the final step of the negotiation process. All that is left is to formalise the agreement that has been worked out and then commit to the development of any procedures that are necessary for implementing it.
STEP 5: Leverage an Expert
I cannot stress this enough, ask an expert! An expert can bring so much to the table and the best part is that they are on your side and will be working towards the best outcome for you.
An expert is there to bring –
- New Ideas;
- Best Practice; and
If followed, these 5 SIMPLE STEPS is enough to give you the confidence and understanding to step into a high stakes negotiation and get the best possible outcome for yourself while building relationships at the same time. Remember with this process that it’s not linear, you may go through step one, then step two, step three and back to step one depending on what happens. So be patient, be prepared and learn and grow with each negotiation you do. Let me know your experiences, I would love to hear them!
Want to share this exercise with your team – download PDF here.