The art of negotiating

Let me ask you 3 questions. Please be truthful with your answers because I won’t be there to hear them.

1. Have you ever walked away from a negotiation all flustered and hot under the collar?
2. Have you ever felt that you’re not making much headway with certain people or organizations you’re trying to negotiate with?
3. Have you ever walked out of a negotiation feeling that you got a raw deal because you got painted into a corner?

I know I have. In fact, many times over for each. And I still do, just less now than before. We all find ourselves engaged in various kinds of negotiations every day. It can be trying to get your kids to do their homework before you allow them out to play; or getting that promotion you believe you deserve, or winning that multi-million dollar deal that can make or save your career.

So why is it that our “batting average” can sometimes be so bad even though it’s something that we do often?

Many of us have come across many self-help books about strategies we can employ to help us win more during negotiations. However, employing strategies without the right guiding principles can sometimes be counterproductive as many of us have found to our detriment.

So what are these? And how many are there?

Personally, I found 3. Yes, only 3. And they’re not rocket science either, so if I can remember and practice them, so can you.

PRINCIPLE #1 BE CO-OPERATIVE INSTEAD OF ADVERSARIAL

We have absolutely NO CONTROL over how others behave towards us during a negotiation, but we do HAVE CONTROL over our responses to them. And getting angry / frustrated / annoyed won’t help you to achieve the outcome you desire. Being human, our most primitive response to any situation is either “flight” or “fight”.

And because we have seen many examples that “might is right” in the course of our formative and adult lives, the most likely response, at least in non-life-threatening negotiation scenarios, is then to “fight”. So, instead of going into “fight” mode, please remember that using other people’s bad behaviour as an excuse for behaving badly ourselves is both immature and unbecoming.

Therefore, in such situations, we should tell ourselves to focus on the following:

a. Solving the Problem – look always to find and reach a mutually acceptable agreement. And the best way to do this will be to understand the reasons behind the other party’s behaviour;

b. Understanding the other party’s Point of View – try “walking in their shoes” so you may see the same problem from their perspective. Too often, we tend to look at issues from our own perspectives; and

c. Respecting Others – if you treat the other party like an adversary, you will likely get the same treatment back. Treat them with dignity and they will likely reciprocate. Take the lead here and start being respectful first.

Here is a personal example to help illustrate points “a” and “b” above:

While running an internet design firm, I discovered that my web-designers were not updating information after getting complaints from existing clients about the slow turnaround times.

Their reason? It was more fun and challenging coming up with and working on new concepts and designs for new projects instead of updating the websites of existing clients with new information.

So, I got my web-designers to agree to help out while I interviewed and formed a new unit (WebExpress) that did website maintenance & updates exclusively. In the end, everyone was happy because they got what they wanted.

PRINCIPLE #2 LISTEN, LISTEN, AND LISTEN SOME MORE

Why is this so? People tend to trust those who pay attention to them, those who listen to them. Is this not true of ourselves too? That the people we trust are the ones who really care about us, and they show this care through their willingness to listen to our problems without passing judgment.

Too often, we are so concerned about our own interests and getting what we want that we forget that unless the other party’s interests are taken care of as well, why should they deal? Would we deal if we were in their shoes? Not likely, right?

So, to gain trust, we should do more of the following:

d. Following the 70/30 Rule – listen 70% of the time, and talk only 30% of the time. So before you step into any negotiation, remind yourself of this rule so you’ll end up listening more;

e. Seeking Clarification – and when you do speak, ask questions. Not just any question, the right questions. These are usually open-ended questions that will lead the other party tell you more. And please do ask them about their needs and interests; and

f. Acknowledging Their Position – when the other party disagrees with you, simply acknowledge their position. Giving acknowledgement doesn’t mean you agree with them, but it does demonstrate that you are giving them “face”. Furthermore, it also gives you the opportunity to state your own position.

Here’s a personal example to help illustrate point “f” above:

I was in my 20s and interviewing for a job as a Forex Dealer in one of the foreign banks here. My interviewer was the person in charge of the entire dealing room – a much older Chinese man who’s been around the block many more times than I had.

He kept an aloof distance throughout my 20-minute interview. At the end, he asked what my expected salary was, so I told him. He squinted and shot this back at me – “Since you have no prior experience in this line, why should I pay you this much? I can hire 3 fresh grads for this same amount!”

I nodded and smiled. Then I replied, “Yes, you are absolutely right, sir. You can. However, I believe you see value in me else you would not have called me in and wasted 20 minutes of your precious time on me.”

I got the job, and at the salary I wanted.

PRINCIPLE #3 EXPLORE OPTIONS TO REACH MUTUAL AGREEMENT

Too often, we think that reaching a compromise in a negotiation is a good thing. To compromise may sometimes mean that neither party gets what it wants, but instead settle for 2nd best. Also, we sometimes end up “having blinkers on” because we believe we are constrained by the limits of what’s on the table.

In both cases, it does help if we can be more “creative” in finding options that not only are acceptable to both the negotiating parties, but meet their needs and interests as well.

Here’s what I mean:

g. Expanding the Pie – don’t limit yourself to what’s on the table because if you can expand the scope of the negotiation and more is at stake, everyone will be forced to re- evaluate their initial positions. This is a great way to break deadlocks;

h. Brainstorming for Outcomes – when both parties are actively collaborating on this, the likelihood of reaching agreement is a lot higher. One way to start the ball rolling will be to use these phrases – “What if we try this?” or “How about doing it this way?” – before you put forth your suggestions; and

i. Finding Agreement – the more issues both parties can agree on, the more productive the negotiation. By starting with the smaller issues and leaving the larger ones to the end, it may end up that because of the relationship built, neither party will want to see the negotiation fail.

Here’s a personal example to illustrate point “i” above: A large and very well-known American company in the entertainment business wanted to create a website to showcase a major event that they’d be holding in Singapore. Though the contract value was relatively small compared to some of my other projects, I wanted them as a client because of their brand. However, their standard vendor contract was about 30 pages long in printed legal text on both sides.

I wrote down a list of the clauses I didn’t agree on and prioritized each one, starting from those that had little or no consequences in case of a contract breach, right up to those that could potentially break us. Then I called my counterpart in Japan and started working down this list.

It took almost a full week before we came to the key “bone of contention” – that of liquidated damages. I argued that this amount was not in proportion to the contract value and that unless they removed this clause, I could not sign the contract. But because we have worked and agreed on all the issues prior, we’ve forged a comfortable friendship (on 1st name basis) and didn’t want to jeopardize the show, they agreed.

IN CONCLUSION

Please do learn and apply these 3 principles in all your future negotiations, whether they are personal in nature or work-related, and you should see more of your negotiations succeed with both parties walking away happy and satisfied. I certainly have!

Good luck!