Effective Negotiation Skills
Jewel in the crown of effective negotiation. Get this right and your performance in the negotiation dramatically improves. (G. Kennedy, 1993)
Good preparation is essential in negotiation. A poorly prepared negotiator demonstrates sooner or later that s/he does not know what s/he is talking about.
There are three basic elements in any preparation:
- Setting bargaining objectives.
- Assessing the other side’s case.
- Assessing relative strengths and weaknesses.
Let us consider each element in turn.
1.1 Setting bargaining objectives
In negotiating like many other activities, it is vital to understand that ‘if you don’t know where you are going, you are liable to end up some place else’. What you need to do, therefore, is to think carefully and prior to the actual negotiation about what you are trying to achieve.
How to set objectives?
When preparing, identify a range of objectives, rather than a single target point. This range includes:
- A top line objective – the best achievable outcome
- A bottom line objective – the lowest, still acceptable, outcome
- A target objective – what you realistically expect to settle for
Bargaining normally takes place between the top line objectives of the two negotiators, whereas agreement takes place between the parties’ bottom line objectives. If the bottom line positions do not overlap, an agreement cannot normally be reached.
On the other hand, not all issues and disputes lend themselves to a range of objectives. For example, when some matter of principle is involved, the top and bottom lines may not really exist. Where this is the case, you should at least establish a realistic bargaining objective. It is crucial to have a clear goal in mind while negotiating. While the most likely outcome of a negotiation is a compromise, this does not mean that the final agreement must be ‘down the middle’ of the negotiators’ respective target objectives. In fact, better preparation, more skillful bargaining or more power usually means that one of the parties will finish closer to his\her target point.
1.1.1 How to define your bargaining range?
A considerable amount of information is required to establish your objectives for the negotiation. Some of it will be available during your preparation, other information will have to be gathered during the early stage of the discussion. As you decide your bargaining objectives, try not to get so wrapped up in contemplating what you can win that you forget to calculate what you can lose. Ask yourself ‘What is the most I can lose in this negotiation?’. This is your best alternative to no agreement (commonly referred to by its acronym BATNA) and it will help you define and decide on your target objective in a realistic way. It also determines your degree of generosity and the level of your ‘walkaway’ position. If you have little to lose, your downside risk is small. You can afford to be generous. On the other hand, if you stand to lose a great deal, you must choose and use your objectives with great care.
In defining your BATNA, ask yourself:
- How far can I go? When should I stop negotiating?
- What will happen if I stop negotiating?
- Do I need the other party for implementing my solution?
- Do they need me?
Normally, the better your BATNA, the stronger your bargaining position, and the more demanding you can afford to be. However, to assess bargaining power, you also need to consider the other party’s best alternative to non-agreement.
If possible, one of your bargaining objectives should be to help the other party to feel satisfied with the outcome. Finally, in negotiation, firmness and clarity are strength. Therefore, as a rule, you’re BATNA and bargaining objectives should not be altered unless the underlying assumptions change.
1.2 Assessing the other side’s case
To plan your negotiation, you may have to make assumptions about the other side’s likely reactions to your demands. Assumptions are best guesses, and must be tested. If you act without testing your assumptions you may inadvertently spend a lot of energy in resisting something the other party is not demanding or demanding something the other is not resisting.
What are the key stages?
As early as possible in your preparation and negotiation, you need to carry out the following activities:
- Try to establish what the other party’s claims are and what they are seeking to achieve.
- Probe whether specific problems or concerns lie behind their questions or claims.
- Exchange factual data in advance of negotiations.
- Consider what facts and arguments the other party is likely to use in support of their claim.
- Consider the possible existence of a hidden agenda. Look for underlying issues which may influence the conduct and outcome of the negotiations or cause delay and confusion during negotiation.
1.3 Assessing relative strengths and weaknesses
Strength is the power or influence you can exercise over the actions of the other party.
What kinds of power are there?
Power and influence may take many forms, for example:
- Decision-making authority (you’re the boss)
- Superior knowledge of the issues in dispute
- Superior financial resources
- More time to settle the case.
- The moral strength of the actual case.
- The determination or persistence of the negotiator.
- Better preparation.
- More experience in negotiating.
What should you bear in mind when assessing your strengths and weaknesses?
- Power is of no use unless both parties know about it and have a similar view of its extent.
- If you are stronger than the others but they do not know, then you have no effective power. If you are weak and they do not know, you are stronger than you think you are.
- If you are stronger and both parties know it, then your basic use of this advantage in the negotiation will be to remind them of the consequences of not conceding to your suggestions.
- The skilled negotiator uses or threatens to use his/her power to influence and persuade the other party rather than to defeat them.
- You may be the weaker of the two parties but you are never totally powerless.
- When your case is really hopeless, plan to minimize your losses rather than to defend the case.
- Experienced negotiators will think very carefully before they take full advantage of the other side’s weaknesses. Recognizing the need to ‘live together’, however uncomfortably, gives each side some negotiating strength.
- Negotiating skill is no substitute for lack of negotiating strength. Skill can only offer short-lived advantages.
Your own negotiation position can sometimes be strengthened by identifying and tactfully reminding the other party of sanctions which are available if negotiations fail. These sanctions may be financial, legal or emotional, or may relate to the effect of a particular outcome on an organization’s or on an individual’s reputation, image or self-esteem. Displays of emotion may occasionally be beneficial provided that they are sincere and used consciously. However, they to avoid the emotional outbursts.
KEY POINTS FOR PREPARING YOUR NEGOTIATION
When preparing for negotiation, do the following things as often and thoroughly as possible:
- Identify the real issues in dispute.
- Ask yourself:
- What are our basic underlying concerns?
- What are our ‘must get’ objectives?
- What are our ‘like to get’ objectives?
- What are our ‘intend to get’ objectives?
- What are the criteria by which we will judge whether the negotiation has been a success or a failure?
- If we fail to achieve our objectives, do we re-negotiate?
- Determine your walk-away position.
- Examine what sources of power you possess.
- Assess your relative strengths and weaknesses.
- Determine your strategy for the first meeting.
If you are negotiating as a team, also consider the following:
- Decide clearly who will be the spokesperson during the discussions.
- Determine the roles of the other team members.