The Secret to Negotiating Success
What’s the secret to negotiating success?
First, we will take a look at the conventional approach. Then we’re going to see what new research has to say.
As the conventional approach says, even experienced negotiators fall into certain traps:
They make inopportune remarks, revealing information that undermines their position. The first rule of negotiating is “Shut up!”
To make the deal happen, concessions have to be offered. In the vast majority of cases, the one who concedes first does worse. When you do concede, make sure your first concession is not too big, or you will undermine the credibility of your opening position and leave the other person feeling they can do even better.
Watch out for “Numbers Scrambling” – $5 in price does not sound like much, but that difference could mean big bucks. Never make a concession without calculating ahead of time what it is worth in actual dollars.
We could go through a lot more rules of negotiating. But here’s where we have to part company with the conventional approach to negotiating training. Which is: Here’s the rules, follow them and you’ll do great.
It turns out you can’t understand how people negotiate without understanding a lot more about what makes people tick. It’s not enough to hear new ideas; in order for them to become usable tools they have to become ingrained, part of our automatic system. People have pictures in their heads about the way the world works, and that gets in the way of them doing new things. This program is called CREATIVE NEGOTIATING because it takes a lot of creativity to overcome these self-imposed obstacles. Future webinars will offer advice, based on modern research, about which approaches work best.
There’s more to thinking like a negotiator than being assertive. In the modern world, you have to see the negotiation itself in broader terms. We talk about a negotiating continuum of three main modes:
The bargaining mode is where most negotiations begin. This is focused on price haggling, and it’s competitive, because what you gain comes at my expense, and my gain comes at your loss.
Deal-making is concerned with adding value to this deal by broadening the issues and finding where we have mutual gain tradeoffs.
Relationship-building looks beyond this deal to how we can work together over time. Our focus shifts from what can I get out of the other side to how can I be a resource for them, and how can they help me out at the same time.
Q: What’s your advice about how to handle myself during a negotiation?
A: Since your automatic system based on your current mental model may well lead you astray, then don’t respond automatically. Slow the process the way down. Spend a lot of time on preparation. During the negotiation, think things over before you respond, and take plenty of timeouts to give yourself time to think.
Q: I hate to negotiate. Is that normal, and what can I do about it?
A: Many Americans hate to negotiate. Our whole lives are geared towards getting along with people, and negotiating means conflict. But you can overcome this by focusing on the fact that the disagreement is just business; the conflict is not personal. Look at Bill Gates, who has said, “I hate to negotiate.” He may have hated it, but he became a master negotiator.
Q: How should I judge how well I do in a negotiation?
A: Price alone is not how to judge a negotiation. When I spoke with the head of Supply Chain of one of America’s largest procurement organizations, he said: My people have reputations as being tough negotiators. One of them will come back from negotiating with a supplier and tell me: I got a really good deal; I knocked their price down 15%. Then he’d start reviewing the contract and notice there were no terms — no help with the installation, no training whatsoever, no warranty at all. In other words: Great price, but lousy deal.
Q: What do you mean by “inappropriate information” people reveal in a negotiation?
A: You’d be amazed at the information people will reveal in the opening minutes of the negotiation. Sales people will say things like: “We have a surplus of product right now.” “Our stock price is down; we really need the business.” Purchasing people will say things like: “Your product’s the only one that passed the acceptance test,” “Our engineering people really love your design,” “How soon can you get your product in here; we’re about to shut down the line.” If they stopped to think for a minute, they would realize they are shooting themselves in the foot.