We at Huthwaite International have conducted the world’s largest body of independently and directly observed research into negotiations. Our observation of thousands of hours’ preparation, planning and face-to-face negotiation have led us to develop the Top Ten Tips for Negotiators.
Sell first, then negotiate (but only if you have to!)
If you can sell an unchanged solution at the full price, why negotiate? Well, in major business contracts, this is rare. Usually the buyer will signal the start of negotiations by saying something like, “I’d like to do business with you, if…”. Poor negotiators will have already given things away to achieve this position; the skilled will not.
Never concede, always trade
An effective negotiation involves movement by both parties towards an outcome with which both are comfortable. So avoid giving something without getting something in return. When you need to move from any stated position, make a conditional offer, such as: “I might be able to move on X, if you’re prepared to move on Y.”
Win/win is not 50:50
A win/win outcome is certainly not a case of splitting the difference, or feeling awkward about representing your interests. Huthwaite will help you achieve a ‘WIN/win’ – the best possible deal for you, that still allows a degree of win for the other side.
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. So if power is about perception and emotion, you can manage and control it. Some of the later commandments explain how skilled negotiators generate and manage their feelings of power.
Prepare and plan
Before a negotiation, skilled practitioners will actively manage their feelings of power and identify the possible overlaps, trades, and levers that give them the maximum flexibility to bargain. They develop a credible fallback position, or BATNA (best alternative to a negotiated agreement) – which prevents them feeling they must do a deal at any price. Secondly, they identify as many negotiable issues as possible, prioritise them, and develop a negotiable range for each, from best through to target and on to worst. They also calculate the cost of concessions for each, to avoid impulsive and expensive mistakes in the heat of battle. Then they repeat the process, but this time from the other party’s point of view, spending time identifying common ground and planning how to use it in the negotiation.
Identify and use your levers
A lever is something that is worth less to you than the other party thinks, or than the value the other party puts on it. It can therefore be traded for something that you value. Comparing your respective priorities on each issue identifies those levers. Linking those issues, and obeying the second commandment (never concede, always trade), makes sure that you use them.
Logic is not persuasive
This applies in every aspect of life, as any parent will tell you! Skilled negotiators know it, too. They don’t browbeat the other party, or use long chains of logical arguments. They just have one or two key reasons for any particular position they adopt. They do, however, prepare lots of smart questions for probing the other side’s stance.
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 the taxman! When planning, skilled negotiators look outside the deal for extra value.
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 hard-faced and intractable character, is inaccurate. Skilled negotiators have a wide behavioural repertoire and the flexibility to match their behaviour to suit the situation.
Keep all the balls in the air till the end
However tempting, avoid settling issues as you go, particularly the minor ones. The risk is that you discard your levers and the negotiation comes down to a single-issue confrontation – usually the price – with no remaining issues 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, settle issues provisionally.
And, of course, as with any top ten, there is an eleventh:
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, it 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.
