Chapter 81 The Art of Negotiation.
In a world of human co-existence, the ability to negotiate well is vital. Through negotiation, contracts are won, sales are concluded and even grievances, labour strikes and major conflicts are settled peacefully. At various times in your life, negotiating is a serious business. The main ingredients of negotiating skills are: Knowledge of the matter and of your counterpart, preparation, perception, strategy and actual tactics.
Your knowledge and outlook. You have little control over the many complex variables, especially the value and cost structures on which your counterpart bases his strategies and demands. To begin with, the right frame of mind, attitude and assumptions are important. This is not a contest or game to be played, but an agreement process in which both parties should benefit. This is a cooperative process, not a competitive one. The ideal outcome is where both parties gains are more than their losses; each gets something he needs more than his opponent. For example, an employer gains more from his employees service than his loss in wages, the employee profits more from his salary than his expense in time and energy. Other important considerations are: Where, when, how, what, and with whom to negotiate?
We should never negotiate on the phone or in letters, of course. Flesh and blood make a world of difference. Furthermore, a good and realistic grasp of the situation by both parties can prevent misunderstanding and time wastage. General all-round knowledge and an insight into the specific matter to be discussed are both indispensable, so are the command of various tools and tactics to be used. Your pool of information, quality of your products, services or job performance are your biggest assets.
Preparation. Do some self-evaluation first. What are your strengths and weaknesses? What are your values and needs with regard to the upcoming negotiation? Do detective work and scientific research if necessary, to find out as much as possible about the matter and your opponent beforehand. Who are the other interested parties who will be present or absent at the talk? Do your homework and empower yourself by fact-finding, digesting, careful reasoning and strategy. If possible, find out about your opponents past performance in bargaining. Then sharpen your insight, foresight and your ability to predict his behaviour. To be thoroughly prepared you have to probe the assumptions, beliefs, needs, strategies and styles of both sides of the game. People have various needs comprising: Finance, safety and security, self-esteem, self-actualisation, love, harmony and aesthetics. A variety of situations can exist, in which you negotiate for your needs, for your opponents needs, or both, or even let your opponent negotiate for yours! Likewise you could negotiate against your needs, against your opponents, or even against both your needs and his. Anyway, a good preparation is essential, it is half the way to success.
Perception. Get as much information as possible, certainly not less than those information you give! Look for hidden wants and commitments. Each clue can provide some negotiating advantage. Learn to see needs by asking questions, by listening and studying body language, which reveals important cues and secrets. The more you understand your opponents necessities, the better you can negotiate. In asking questions, know what to ask, when to ask and how to phrase them and put them across. Some words and gestures can show sensitivity or emphasis on certain areas, and even sincerity. You should be exhaustively watching, sensing, digesting, adapting, adjusting; with full alertness, responsiveness and excellent timing. Bear in mind too that respect for others preferences, viewpoints and confidentiality are also important. Next, lets look at the various tactics:
Positions of advantage. An example is where you can concede less but take more. In many cases it is good to use an agent yet deal with the principal. Your agent has limited power to give yet you deal with the man who writes the cheque!
Precedence and participation. Where precedence is set by other trade unions or workers in the industry, your demands are on stronger grounds. When you are part of a certain group, or when you associate with certain people, places and products you can bargain better, as countries do when they belong to a trade zone or regional grouping. Conversely, disassociation with undesirables helps in the same way.
Contrive and provide many options. If most or all of these alternatives are to your advantage, you are likely to latch on to something beneficial and laugh your way to your bank. Hence you must always negotiate as creatively as possible. Shall I get a longer credit period instead of a price discount? Can I have more share options and longer holiday leave in lieu of salary increase? What about a cash allowance in place of a company car? Shall I take a lump-sum payment rather than staggered ones with interest? You can refer to Chapter 30 again for tips on creative thinking. You can give concessions on the one hand and gain on the other. Use barter and interlocking deals too. Some options bring greater benefits for both, and conclude the deal better and sooner. A concluding remark here: If you cant make a sale, make a buy and take over!
Retreat to advance or seeming withdrawal. Examples are: You supply something below cost to put competitors out of business first, then you revive! You appear to have surrendered while in perfect control of the situation. Back-paddling also allows you to catch you opponent off guard; assuming that you are losing and leaving, he may give you a little concession. You enter conceding but emerge winning. You seem to have his interest in mind but you also open more ways for yours! You can further use the elements of stand-off, or surprise; you can even move in contrary to normal and popular patterns.
The use of patience, time and silence. Endurance is needed while waiting for the right time to make certain suggestions or demand. Procrastination however, should be avoided, unless you have a strategic reason. With care and cunning, deliberation, delays, deadlines and dumbness can sometimes be used fruitfully, depending on the arrival of right and timely situations.
Diversion and re-focus. Diversion provides breathing space, and while you divert attention and pressure elsewhere you can pursue your real goals. Re-focus provides a fresh outlook with better options.
Use facts and figures. Statistics give evidence for what you claim and serve as bargaining tools. Marketing and promotion people and others show numbers, random samplings to assert their points. We know too that politicians and propagandists can even plant the people who take samples and averages! An extension of these is the appearance that you possess more knowledge and information than you really have, and that puts you on a stronger footing. On other occasions you can be the strategist who releases information to test responses and gets feedback!
Inching your way. This works well where you are settling many issues, and where your many little gains are almost imperceptible to your opposition. They all add up in the end!
Go the extra mile. This means working hard and covering as many grounds and opportunities as possible. Take advantage of the force of numbers. Ask for the moon. Aim higher.
The extreme case of negotiating for maximum gains. Here you may make higher demands than usual, bargaining for the highest returns, and giving little concessions, if any. Time factor may have to be ignored because stalemate and sitting it out are expected. You could show little sign of weakness or hunger for consensus, but to make some headway you would still need to appear congenial, seemingly pursuing mutual benefits. Conversely, If you are confronted with this type of negotiator, you will have to seriously consider whether it is worth going through the tough game. Balance your pros and cons, and leave the negotiation if it is better to do so.
The danger here is the tendency to get carried away by power trips, if you push too hard and too far, your next step could be the last straw that changes your counterparts stance traumatically or completely! Besides, a one-sided settlement where one gains lavishly at the expense of the other seldom has lasting benefits. The loser will sooner or later look for ways to turn his hardship around. A settlement in favour of one side normally breeds trouble and has no permanence. It is better to go for:
The better way of negotiating for win-win outcomes. Persuasion is surely better than force. Often it is better for both parties to pursue a win-win finale, although your counterpart may occasionally get more from your concessions. Start the talk with an open, objective, unbiased mind. Be harmonious and reconcile opinions and needs. Turn the negotiation into a co-operative exercise for mutual benefits. Change divergent interests into areas of shared interests. Trust, creativity, goodwill and common gains should replace suspicion, conflict and greed. Find some idea or item to agree on first and expand from there. Try and limit any disagreement to varying points of view, and not to your counterpart as a person. Weigh the pros and cons. Take a long-term view, instead of quick reward.
In a win-win situation, you provide something acceptable, yet easier to achieve in terms of time, efforts and costs. This means you have to be creative in your offers and counter offers. The secret is to detect and understand the needs of your counterpart and to assure him that you can help him to meet them. The above are two extreme cases of negotiating, you can compromise the toughness with the softness, at a point in between to suit your situation.
Negotiating for a raise. Here, the things you do before the actual negotiation, like preparation and positioning, are as important as the negotiation itself. The whole process takes planning, strategy, manoeuvring, timing and tactics. Size up the overall situation, including competition, your contribution and indispensability in the company. Set job objectives and performance targets, and turn yourself into a little profit centre. Gather knowledge and a skill that nobody possesses, or even something that surges in value over time.
Reduce your flaws, and have ways to conceal the remnants of your weak points. Take for example a common employment situation where you are doing well, but you are taken for granted and destined for just a normal raise. Your solution would be to show in a subtle way the expanse of your knowledge and skills by organising a training for the more ignorant subordinates.
There are various creative proposals you could put forward; you could take a higher pay for less insurance and retirement benefits, etc. If you are in a situation where your contribution is just beginning to show, stress the motivational effect a pay-rise would have on your performance. One blunder many raise-seekers make are the self-defeating, half-hearted efforts in getting a decision, and sadly letting the boss off the hook! The causes of this fiasco are: Indecisiveness, fear of rejection, poor preparation for all kinds of resistance. Another good advice is: Always try and get your "raise at the entry point before you start work!