The Art of Negotiation

“Negotiation” defined is a “discussion aimed at reaching an agreement”-which is not always the simplest of tasks. Following certain guidelines is helpful to develop better negotiation skills for more productive discussions. A method to use for optimum give-and-take is principled negotiation. Principled Negotiation

Principled negotiation, or “negotiating on the merits,” achieves success by being hard on the problem and soft on the people. This approach takes away the roadblocks to clear communication. This method is summarized in five points:

1.  Separate the people from the problem.

2.  Focus on underlying concerns, not stated positions. Ask why.

3.  Generate a variety of solutions before deciding what to do.

4.  Base an agreement on objective standards or fair procedures.

5.  Prepare in advance what you’ll do if negotiation fails. Know your “BATNA”-Best Alternative to a Negotiated Agreement.

Remember that people are in a constant negotiation, frequently looking for an edge in obtaining the most efficient solution possible. During a negotiation, everything you want is owned or controlled by someone else. This knowledge helps us break our methods down further to the critical factors of power, information and time. Power in negotiation comes down to influence.  Specifically, what makes one person able to influence another person? Information is the knowledge that influences the negotiation. Time comes into play in how critical the negotiation is to either party’s ultimate success.

Effective Negotiating Skills 

The “Big Three” in skilled negotiation are perception, emotions and communication.  If you can master these three skills, every negotiation you engage in will create success for both parties involved.

The Big Three in Skilled Negotiation are:

• Perception
• Emotions
• Communication

Perception– Ever heard the term, “perception is reality”? It holds just as true in the case of negotiation. Perception involves understanding the way the other side thinks. As you negotiate, your perception improves by following a few simple steps:

• Put yourself in their shoes.
• Don’t deduce their intentions from your fears.
• Don’t blame them for your problem.
• Discuss each other’s perceptions.
• Look for opportunities to show them you’re not who they think you are; give them a reason to think you’re flexible.
• Give them a stake in the outcome; have them participate in the process.
• Make your proposals consistent with their values.

Emotions- Hand-in-hand with perception is emotion. Allowing emotion to affect your negotiation style hurts your bottom line. With this in mind, be aware of what you are feeling. The following are guidelines for dealing with emotions during persuading sessions:

• Recognize and understand emotions-yours and theirs.
• Acknowledge emotions, and make them a focus of discussion if necessary.
• Allow the other side to let off some steam.
• Use symbolic gestures; invite the other side to join you for dinner or for a cup of coffee.  Show them you care about them as people.
• Don’t react in kind to emotional outbursts.

Communication– After harnessing our emotions and winning the game of perception, we can move on to more open, honest, two-way communication.  Here are some proven psychological techniques to improve communications:

Speak to be understood, and reduce outside distractions by keeping confidence and communication in private.

Speak about yourself, not about them. Use first person.

Listen actively and acknowledge what is being said.

Don’t simply react. Think before you speak, then speak with a purpose.

Know Your BATNA

Armed with these guidelines, we can still run into roadblocks on the way to success.  Prepare in advance for negotiation failure. Know your BATNA. It’s always important to have a backup plan, so invent a list of actions you might take. Next, convert the most promising ones into realistic options and then select your best option. This option becomes your “walk-away alternative.” Judge every offer against this alternative. While you’re at it, consider the other sides of BATNA. The more you understand the alternatives, the better prepared you will be for negotiation. Here’s how:

• Don’t attack the other person’s position-look behind it.
• Don’t defend your ideas.  Instead, invite criticism and advice.
• Recast an attack on you as an attack on the problem.
• Ask questions and then pause. Silence can be very effective.

It’s important to use all of your options, whether it’s your top priority or your best alternative. Keep everything on the table without narrowing the negotiation down to only one item. One common mistake in negotiation is making the whole discussion about price. If you narrow the give-and-take down to price, someone has to win, and someone has to lose. When you include every facet along with price in the negotiation, you have a real chance at an agreement that fosters future communication.

In the end, the art of win/win is to piece together the various elements. Different people want different things. We assume other people want what we want and that’s not always true. Don’t fall into the trap of making assumptions. We assume price is the most dominant issue in a negotiation, but there are many elements other than price that are important to people. Once we master all the elements of effective negotiation, each party will walk away feeling they’ve made the ultimate agreement.

Construction Business Owner, September 2007