You make concessions and/or prevail in small ways or debates every day and are probably pretty good at communicating your needs or value to colleagues and clients. But at some juncture in your professional life, there will come a time when you will have to negotiate a major career or business deal. With so much on the line, emotional thermometers soar and sound sleep is traded for worries about how to present the best case. To help you gain the best ground possible in that scenario, here are some key tips I’ve gleaned from radio interviews with law professors, business negotiators, M&A experts, and others who make a living negotiating for best outcomes.
#1: Transform your own idea of “negotiation” away from “confrontation” and toward “conversation”. Either there is a ball on the table that two parties want to put into play, or someone has something the other person wants some, more, or perhaps all of. Even in smaller negotiations – Who should drive? Who will lead a project? – at risk are egos and desires, implied or explicit valuations. So of course, the potential for conflict is high. However, if you know what you want, are aware of the fair market value or “cost” of that, and if you can listen to another’s opinions and respect their right to be at the table as well, you’ll be more grounded in your expectations and your remarks and observations. Insist on, and contribute to, a respectful atmosphere and you’ll make real progress much quicker and easier.
#2: The one with the most “power” in the room is the one who cares the least about the outcome. Power constantly changes hands and it is a relatively fluid transfer or back-and-forth handoff in a healthy relationship – even between employee and employer. But one hard truth prevails in any negotiation: The one who can walk away from the situation with the least emotional and/or financial fallout has the greatest personal power at that point in time. Before you enter into any confrontation or negotiation, be cognizant of how much skin both you and your opponent have in the game; if you are more invested than the other party, consider bringing in a third-party negotiator on your behalf to better level the negotiating field, or develop a realistic “Plan B” BEFORE you sit down at the table.
#3: Be first and be firm. If, as a seller, you throw out “a ballpark range” between $5,000 and $7,000, a buyer will begin negotiations under $5,000 because you’ve signaled you want at least $5,000. A negotiation, by definition, is about forfeiting a “wanted” price for the “must have” price. Research shows that the one who throws out the first offer – a set amount – actually anchors the discussion and the result favors that person. Begin with your true or lightly inflated “wanted” price – a set amount, never a range — and a clear explanation of why that is fair. However… know privately your “must have” price as well, and the range between the two. That is your honest playing field. If a concession is required and remotely possible, make it, but retain something in return: “I can deliver “a” and “b” for that price, but would understandably have to take “c” off the table, if that’s your best offer.”
#4: Forget about “winning” – that attitude is for losers. A negotiation or “settlement” should be a desire to come to a fair transaction – not the best and not the worst outcome, but a realistic or fair transfer of property, power, wealth, or influence. (Affection cannot be negotiated, but respectful behaviors can, which influence affection – but that’s another blog). Take your time, don’t be pressured into a decision that leaves you feeling like a “loser” and reconsider one that leaves you the obvious “winner” – the “loser” will resent the concessions or price and it will come back, in reputation or fact, to hurt you. “Win-win” is too often a fairy tale; an outcome that both parties can live with, and maintain respect for one another and a long-term business or personal relationship, is your more realistic goal.
With that in mind, join us next week when the discussion will turn to the art of making “accidental” sales!