The Art of Negotiation

by Joanne Leitschuh

Have you ever thought about how often you enter into negotiations? It could be anything from deciding where to eat out to planning how to spend your company's marketing budget for the coming year. Perhaps the idea of sitting around a conference table arguing your ideas with colleagues leaves you feeling drained. But really, negotiating is a dynamic part of business which -- if you step back and analyze it -- is based on human relationships. "What can I get out of this" isn't the backbone of successful bargaining.

Jim Alvarez, a New York psychologist who trains the NYPD and the Metropolitan Police in the art and skills of hostage negotiation, says that the fundamentals of any negotiation boil down to two aspects: "Solving problems and building relationships. Problems become almost the third party in a negotiation. They are something both sides have in common, and concentrating on them helps to build a relationship. That way it becomes easier to make headway."1

The key to building relationships is listening. Have you ever let the other person have their say without always trying to prove your point? It really brings everyone at ease when they sense that what they say is important. 55% of communication is non-verbal, so the eyes have a big part in "listening". 2

Have you also noticed that women tend to make better negotiators? Alvarez says that "Women tend to be better communicators. They are often better at listening to the emotions behind the words. That is the key to unlocking talks."

I (being a woman!) know the part I enjoy about meetings is discovering where the other person is coming from -- what makes them tick. What have they said? What have they NOT said? What drives them? Status, position, money, acceptance? If I can understand what motivates them when solving the problem together, then a happy conclusion is possible. For example, I called a meeting so that our USA and UK selling teams could get together and discuss the pros and cons of our current marketing strategies. Changes needed to be made to our current packaging, and promotional literature and displays creatred for our new line of jewellery. As expected, there were many differing ideas put forward, but once we agreed on where we were heading and why each idea had to be put aside or expanded, we could make progress in the decisions.

So what makes a successful negotiation? Certainly doing your homework to prepare ahead of time is crucial: knowing the facts, goals, fears, alternative agreements and even details of what the other person may be thinking. If you are like me, you don't want to be forced into taking a position. I would rather discuss solving the problem than get emotionally involved. I've found it does no good to assume anything, so I am curious and like to ask questions. The people in our wholesale jewellery company have been together for more than 25 years. We've had countless negotiation sessions and yet we can get along because we keep the problem separated from the person. If one person is strongly pushing for a different way of doing something that doesn't mean they are stupid. It's just that their interests are different from mine.

It also is a good idea to be prepared to compromise, especially if the other person is standing firm. Alvarez believes that, "80% of a smaller deal is better than 100% of no deal at all. If you can help the other person say `yes', you are on the right track." On the challenging side, you may encounter a person who doesn't want to compromise. They are the type who says, "Take it or leave it!" Well, all hope isn't lost here. Perhaps you can talk to others involved to see what points can be open for compromise. After all, negotiation is all about talking and building confidence and trust in the relationships to keep them going.

Another way to open up a difficult negotiation is to ask questions. Haven't you been at a meeting where someone makes a pretty strong statement that creates a heavy "air" of resistance? It seems far better to ask questions that will lead people to think along your lines if you truly believe your answer is a winner.

There seem to be three common pitfalls in unsuccessful negotiations:
1) "Failing to find out what the other party wants (`I know what I want and I don't care what you want.')
2) Failing to define what you want (`I don't like it but I don't know why.')
3) Adopting a win-lose attitude (`If I win, you lose.')"3

Funnily enough, it is important to know when to STOP pushing so you don't lose it all! At this point a win is when both parties have gotten something from the deal. A settlement is somewhere between your best and worst possible outcome.

So what happens when talks fail? Part of your homework is to list your other options. This is known as your BATNA, "Best Alternative to a Negotiated Agreement".4 Decisions at this point are best not made irrationally from the emotional heat of the moment! Think of the alternatives before you begin negotiating.

Negotiating is an inevitable part of business because people make up businesses. The dynamics of relationships make solving problems challenging if not at least interesting! Who we are deep down and how we treat each other can be expressed in the negotiations in the boardroom as well as in the lobby of a cinema: "Now, if we see your movie, can we go to my favourite restaurant later?"

1,2,3,4: Ben Rooney, "How to Negotiate", Management Today, June, 2002.

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