How strategic thinking will help you succeed in your negotiations
June 25, 2014
Do you negotiate at work?
Do you have to sell your thoughts, your ideas, your recommendations to your boss or your customers?
Do you need to pitch a position to someone else?
If you have answered "Yes" to any of the questions above, chances are, you would have been involved in some form of negotiation. So the next question is: how good are you? And, would you like to get better?
At the root of the matter, a negotiation is a discussion between two or more parties to resolve a difference. That difference may simply be a difference in opinion, a difference of perspectives or a difference of values. It is not necessarily one that deals in price. Of course we all know the price difference negotiations: we call it "selling". Yet when we utter that word, we immediately have a sense of dread. We hate selling and we hate being sold to even more. As someone once said, "I love buying; I just hate being sold to." Yet this very line seems oxymoronic because someone would have to sell you something before you buy it. So why that sentiment? Well, it so happens that selling has taken on a whole new meaning; and most people associate it with sleaze, with one-upmanship, with having been taken for a ride. This sense of dread has spread and now we view negotiations with the same broad strokes as selling. In this article, I would like to take a different view. To say that both selling and negotiating are about the other person; that strategic thinking can help you become a much better negotiator.
So when you negotiate with someone, what do you want to achieve? Most people want the best-case scenario: that the counterpart agrees with them. Unfortunately, when two people view the situation from two opposite ends, and expect the other to capitulate, a stalemate ensues and negotiation is futile. Parties to a disagreement need to identify their intent clearly and to make the negotiation a success, to articulate that as early as possible. Cross-talking wastes time, creates frustration and builds mistrust. Ingredients for negotiation failure.
We know that there are varying degrees of success for each intent and hence we have to also shape it via success factors. But that is not all. We also know that we seldom get everything that we want, and hence we have to categorise these success factors into MUST HAVEs, GOOD TO HAVEs, and NICE TO HAVEs. The more Must-Have factors you have, the harder it is for you to reach an agreement. So while you plan your negotiation strategy, be tough on your success factors; you don't have to put everything into the Must-Haves.
Every decision - and your agreement in a negotiation is a decision - is driven by your constraints. As we have already mentioned time and again, a constraint is a necessary condition for a successful decision (in this case, a successful negotiation), so you need to articulate them. Do you only have $5M to work with? Then this is your constraint. Do you need product rollout witin one year? Then this is another constraint. Do you have to meet your Board's requirements? Then these are yet other constraints. The more constraints you have, obviously, the harder it is also for you to come to a decision - and hence, an agreement.
Do you actually need to go into this negotiation? Do you have any other way of achieving your intent? Is there a cheaper, albeit less robust, solution that you can implement to meet the major needs of your intent? The more of these that you have, the less you need to negotiate. It does not mean that you won't negotiate; after all, the counterpart's solution may be the best-case for you; but if you can accumulate more of these options, you can increase your bargaining power or strengthen your resolve to walk away.
Identify your BATNA
With all these in mind, you can now develop your BATNA, the "best alternative to a negotiated agreement". This is simply what you will do when there is no agreement in the negotiation. Never go into a negotiation with a weak, or absent, BATNA. Don't think that you can charm your way to agreement. Always be aware that your counterpart will have a BATNA, and that they will have a plan to address their intent without you if need be. So you must do the same.
Finally, when you are at the negotiation table, seek win-win. Help your counterpart meet their intent; and by so doing, you can help yourself. Be guided by your success factors, your constraints and your BATNA. Ultimately, a successful negotiation is not one where one capitulates, as in a war. (And even in wars, these days, there is no clear victor.) So seek win-win so that you can continue the next negotiation, and the next.
And that is being strategic about your negotiations.