Description
In this book, we’ll define negotiation and explain our four “mantras” of negotiation philosophy. We’ll work through the five crucial phases of every professional negotiation and what we call the ten golden rules. We’ll suggest a ten-point planning process to help you prepare correctly for a successful negotiation. We’ll show you how to put together a better “jellyfish”—a way to create more effective proposals during your negotiations. All this will be described in the context of how your organization can ensure success in its deals by creating the appropriate strategies and framework of processes to plan, guide, and support successful negotiations. Finally, we’ll emphasize the importance of reflective practice, coaching, and support for people engaged in negotiations. It doesn’t matter which side of the negotiating table you are on, this book will help you to achieve your objectives.
A Definition of Negotiation
Our starting point is to clarify why it is that people need to negotiate at all. The main theme of this book is to show you how you should negotiate and to provide key guidelines or rules, but we’ll begin in this chapter by explaining why we negotiate in the first place. A good place to start is in the commercial world. Here, we can define negotiation as the voluntary and systematic exploration of both parties’ interests, with the objective of agreeing on a mutually acceptable compromise that resolves the conflict. Figure 1-1 breaks down this definition into a few key components so that we can talk about each part in detail.
We’ll touch on hostage negotiation and diplomatic negotiation later in the book, so for now, conflict in this context means commercial conflict. Perhaps the most obvious example is when a buyer tells a salesperson that their product is too expensive or they don’t want it this week or they don’t want it in green. That’s what we mean by conflict in the business world.
By resolution we mean that by the end of the negotiation we have achieved a satisfactory outcome on our part. But we also mean that the other party also feels that they have obtained a satisfactory outcome. Both parties can see the resolution as a “win-win.”
When this fails to happen, it is often because the negotiators forget that part of the definition of negotiation is compromise. You will see later in this book that the first golden rule of negotiation is as follows: don’t negotiate unless you need to. If you are a seller, you should sell well and avoid negotiating wherever possible. If you are a buyer, you should buy hard. If this fails and you need to negotiate, then you will have to make some sort of compromise—and so will the other party. That’s what’s meant by mutual compromise. So, before you unintentionally slip into negotiation mode, remember that if you have a superior bargaining position or the other party simply gives you everything you want, then you should promptly close the transaction. You still have the option to negotiate with the other party at some later time, if business circumstances change. Meanwhile, in the more usual situation where the other party puts up an understandable and reasonable resistance to certain elements, you should search for favorable common ground.
Of course, in today’s tough economic environment, many businesses are seeing their margins squeezed, and some feel the need to use “gamesmanship” to try to gain an advantage in negotiation. We don’t believe the analogy of a game is useful because that suggests negotiation is a sporting talent where luck and finesse are more important than good planning, critical analysis, and sheer hard work. Nevertheless, the other party may be tempted to employ tricks and manipulation. This book will cover such tactics, not least because being forewarned of these techniques is to be forearmed to protect against their use. However, the use of even legitimate gamesmanship runs the risk of the other party feeling they have suffered a loss, which may encourage later reprisals or simply lose you the possibility of a profitable future relationship. This is why we emphasize mutual compromise.
If mutual compromise is not attainable, you may need to simply walk away from the situation. You don’t always need to agree on a deal in every attempted commercial negotiation or diplomatic negotiation. That’s one of the big dif-ferences when it comes to hostage negotiation—where there are unaccept-able consequences of failing to agree on a resolution. In the commercial and diplomatic realms, sometimes a poor resolution of conflict is worse than none at all.
The essence of negotiation is compromise, so before you begin any negotia-tion, you should ask yourself and any other people in your corner if you are all ready, willing, and able to compromise. If you don’t really want to negotiate and you don’t want to compromise, then don’t do it. If you don’t know what the negotiation compromise should be or what the cost to you may be, then don’t do it. Perhaps the culture of your organization does not encourage true negotiation. Or maybe your part of the organization lacks the capacity to negotiate because you do not have sufficient authority or the mandate to agree on the necessary compromise. If you are in a sales organization, are you ready to drop your price? Are you willing to extend the delivery date? Are you able to change the color of your product? If you are not ready, willing, and able to compromise, then by definition you won’t be negotiating.
Similarly, if the other party doesn’t recognize the conflict, does not need a resolution, or does not have the ability and desire to compromise, then there will be no mutuality involved. If there is no mutuality, there is no negotiation. In some circumstances, our clients often say they feel the need to aim for a “win-lose,” such as when they know they will never again deal with the other party. We have found that in analyzing those circumstances the situation has often not actually been a negotiation as we would define it. Usually, these situations have been good examples of our clients selling well or buying hard and taking a robust commercial approach that proved appropriate and valid. However, caution is recommended. If the other party feels they have suffered a “lose” and still have to deliver some aspect of the deal, they may see the chance for reprisals against you.