Top ten tips for negotiators

1. Sell first, then negotiate - but only if you have to.

If you can sell a solution as it stands, at the full price, why negotiate? The reality of major business contracts is that this rarely happens. Usually the buyer will signal the start of negotiations with an opening such as, “I’d like to do business with you, if…”, Poor negotiators will already have given things away to reach this position; skilled ones will not.

2. Never concede, always trade

An effective negotiation involves give and take by both parties to achieve a mutually satisfying outcome. So avoid giving something without securing something in return. When you need to alter your position, make a conditional offer, such as: “I might be able to move on X, if you’re prepared to move on Y.”

3. Win/win is not 50:50

A win/win outcome is not a case of splitting the difference, or feeling awkward about representing your interests. Huthwaite will help you achieve a ‘WIN/win’ result – the best possible deal for you, that still allows a degree of win for the other side.

4. Power is in the head

Power in negotiation is a perception: if you feel powerful, you are powerful – and you’ll behave accordingly. If you feel weak, the reverse applies. Because this power involves perception and emotion, you can manage and control it. Some of the later tips explain how skilled negotiators generate and manage their feelings of power.

5. Prepare and plan

Before a negotiation, skilled practitioners will actively manage their feelings of power and identify the possible overlaps, trades, and levers that maximise their flexibility to bargain. Establishing a credible fallback position, or BATNA (best alternative to a negotiated agreement), is crucial, as it will prevent them feeling they must do a deal at any price. Next, they identify as many negotiable issues as possible, prioritise them, and develop a negotiable range for each, from best through to target and worst. They also calculate the cost of concessions for each, to avoid impulsive and expensive mistakes when under pressure. Finally, they repeat this process from the other party’s point of view, identifying common ground and planning how to use it when negotiating.

6. Identify and use your levers

A lever is something that is worth less to you than the other party thinks, or is worth more to them than to you. It can therefore be traded for something that you do value. Comparing your respective priorities on each issue identifies those levers. Linking those issues, and obeying the second tip (never concede, always trade), ensures you use them.

7. Logic is not persuasive

Skilled negotiators know this. They don’t browbeat the other party, or use long chains of logical arguments. They just have one or two key reasons for whichever position they adopt. They do, however, prepare lots of smart questions that probe the other side’s stance.

8. Don’t just cut the pie: grow it

A good deal is a creative deal. It creates value over and above what the two parties bring to the table. Ideally, that value is created at the expense of a third party; for example, the competition or even the taxman. Skilled negotiators look outside the deal for extra value.

9. Develop your behavioural skills

Preparing and planning are fine, but we all face impromptu negotiations. When this happens, we have to fall back on our personal negotiating skills. The stereotypical image of the negotiator, as a stubborn, hard-faced character, is inaccurate. Skilled negotiators have a wide behavioural repertoire and the flexibility to adapt their behaviour to suit the situation.

10. Keep all the balls in the air till the end

However tempting, avoid settling issues as you go, particularly minor ones. The risk is that you discard your levers and the negotiation comes down to a single-issue confrontation – usually price – with no remaining factors to break the deadlock. You need to be able to juggle the issues so you can bring any of them back into play, at any time, before the deal is concluded. Until you close the deal, only settle issues provisionally.

And, of course, as with any top ten, here’s the inevitable eleventh:

11. No deal is better than a bad deal

Obvious, isn’t it? But not so obvious when the deal has been in the sales forecast for months, seems tantalisingly close, and a few final concessions might close it. But skilled negotiators are clear about their worst position, and have a credible fallback. They can recognise a bad deal, and aren’t afraid to walk away from it.