Six Do’s and Don’ts for a Win-Win Negotiation
This continuation of What CEOs Need to Know about Hardball Negotiating explains what to do, and more importantly what not to do, in order to get the outcome you want in tough negotiations.
October 11 2011 by George Nicholas
- Don’t negotiate for a bigger share of the pie. Do work with the other party to make the pie bigger.
- Don’t use confrontational language that creates defend/attack spirals. Do develop a friendly, trusting relationship with your opposite number.
- Don’t make concessions without getting something in return. Do think of what the other party will value that won’t cost you much.
- Don’t agree to a deal that doesn’t meet your must-have needs. Do plan the negotiation with a clear understanding of your BANTA, or your Best Alternative to Negotiated Agreement.
- Don’t negotiate one issue at a time. Do put everything on the table at the start and encourage your partner to do it so there can be lots of trade-offs.
- Don’t just keep muddling through if the negotiation seems stuck. Do change the dynamics: Sleep on it, move to a new location, ask for “crazy” ideas that can unleash creativity, or change the negotiators.
How to Keep the Negotiation from Derailing
The longer a negotiation drags on, the less likely it is to get closed, Ann Lawrence, a partner in the law firm DLA Piper, says.
“All negotiations need to have a deadline or they may never finish,” according to Huthwaite’s John Golden. “This is not to say that the deadline can’t be extended with the agreement of both parties. If you are buying a fleet of jet fighters, for example, you want to make sure that the service contract meets all contingencies. That could take a while. It doesn’t need to preclude a deadline, however.”
Negotiations that seem endless can create frustration and cause the negotiators to act out. Call attention to the bad behavior, suggests Michelle Lederman of Executive Essentials, an employee training firm. “Not with a pointing of a finger, though,” she adds. Acknowledge that the circumstances are difficult. Schedule a break. Sleeping on it overnight might be helpful.
When anxiety and anger threaten a negotiation, Michael Bechara, managing director of Granite Consulting Group, suggests that the parties put their positions on the shelf and come up with three alternative solutions. This can open the door to a new approach that works.
A stubborn impasse can be resolved with a move to another location. Mark Jankowski, president of Shapiro Negotiations Institute, was involved in a bitter negotiation that pitted the Baltimore Police Chief against his top lieutenant, with each using the media to further his cause and increasing the tension. Mr. Jankowski moved the negotiation from the city to a farm. In the reopened talks he took the position of the lieutenant while his partner represented the police chief. A negotiation that had been deadlocked for months was resolved in an evening.
Creative approaches to making the pie bigger also can keep sales negotiations from reaching an impasse. The Haas School’s Prof. Moore says a buyer or seller who says “This is my final offer” might be stuck in that position because to change it would cause a loss of credibility. “The best approach might be to say I’ll pay the price but I want this and that and that,” he says.
Linda Richardson, the author and sales trainer, suggests that a customer who insists on a 10% discount can be given it — in return for a three-year contract, up-front payment, or changes in terms for delivery or service.
Though a ninth-inning zinger likely is a hardball negotiator’s tactic, don’t assume it is. Mike Schultz, president of the Rain Group sales consultancy, tells of a friend who was selling his midsize technology company to a larger business. The parties agreed in principle on the buyout but after thinking about it the seller realized he was under-pricing his company. He explained his position at the next meeting. The other company grumbled but said fine and the deal was done at the new number, Mr. Schultz reported. With openness and flexibility on each side both enjoyed a satisfying resolution.