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Welcome back to the Skills 360 podcast. I’m your host Tim Simmons, and today we’re going to explore the topic of negotiations.
Negotiation is something we all have to do on some level. You might be part of a team discussing a huge contract, or on the phone trying to get a good deal on office supplies, or in your manager’s office asking for a raise. Negotiation happens every day. In fact, you might say that in business everything is negotiable.
To kick off, we’re going to look at what you do before you start negotiating. That’s right, this is about doing your groundwork. It’s impossible to overstate the importance of being prepared, not matter what type of negotiation you’re headed into. The more you know and understand going in, the better deal you’ll walk out with.
So where do you start? Well, good preparation begins with learning about the other party. You want to understand their style, personality, and the way their groups work. And you also want to understand their negotiating style. What exactly do we mean by “style”? No, this isn’t whether they dress conservatively or casually. This is about how they negotiate. Are they formal or informal? Are they analytical or emotional? Are they aggressive or passive? Knowing these things will help you tailor your response and approach. For example, if you walk into a negotiation and open with an informal and slightly aggressive approach, but the other party is accustomed to more formal and rational negotiations, you may put them off.
Of course, a lot of negotiating style comes down to culture. Germans, Koreans, Russians, and Indians will all negotiate differently. So do a bit of research and find out how these groups typically approach a negotiation. This will reduce misunderstanding and help you craft your own approach.
Beyond style, you need to know how the other group operates. How do they make decisions? Are they aiming for group consensus? Or is there a top dog who you need to focus on swaying your way? Does the person in front of you have the authority to sign off on a deal? These are things you need to know. So do your homework and find out exactly what you’ll be facing.
Great. Now you also need to understand the other party’s position. That is, what exactly do they want and need? And what are they willing and unwilling to give up? To do this, you can try to get inside information, analyze their business situation, and find out about previous deals. Why did they succeed or fail?
Everyone heads into a negotiation with a list of priorities. It might not be written down anywhere. It could just be a general idea like: we can’t play around with price too much, but the timeline is less important. If you know this, you have power. You can also benefit from information about their options. If they can’t make a deal with you, do they have others waiting? Or are you the only one who can give them what they need? How time-sensitive is a deal? Can they wait? Or is that simply not an option for them? Again, this type of information will help you immensely during the negotiation.
Understanding the other party’s position is also necessary in order to figure out your own basic positions. And you shouldn’t have one position in mind. In fact, you should have three. There’s your dream deal, your expected deal, and your deal breaker. Put another way: what do you really hope for, what can you be satisfied with, and what will you not settle for? Remember, your reach must exceed your grasp. In other words, aim for more than you think you’re likely to get. But don’t forget that you’re probably going to have to compromise somewhere.
The final aspect of preparation I want to touch on is mental preparation. Be strong, not anxious. Think of the negotiation as a discussion between equals, not a boxing match in which there’s a clear winner and loser. Making too strong of a power play or appearing too subordinate will hurt you. So relax and treat the negotiation as a problem to be solved with the other party.
In this way, negotiation is just like anything else in life. The more prepared you are, the more likely you are to succeed. So don’t leave too much to chance. Get ready, and get negotiating.
That’s all for today. I’ll be back next week with some tips on what to do during the negotiation. We’ll talk about control, concessions, and, yes, money.
If you’d like to test yourself on what we’ve just covered, have a look at the www.myBEonline.com website. There you’ll find a quiz about today’s show as well as a complete transcript.
So long. And see you again soon.