Career

The Art of Negotiation

 

Notice the title? Yes, it is really an art-form.

And yes, there are loads of books on the subject, one written, in fact, by an old colleague of mine that I highly recommend (see the picture with this article). In these books you can read all about the various styles of negotiation and the various forms that it takes, but I do believe negotiation is not something you can fully learn.

You can learn techniques, but just because you know the technique to swing a golf club, doesn’t necessarily mean you are going to hit the ball straight down the fairway, does it?

Negotiation is pretty much the same thing. I do believe that with practice we get better at it and knowing some techniques helps us perfect our skills, but a lot of it is innate. The fruit of our frames of reference, how we grew up and where.

Nevertheless, there are a few things I always make sure I get a handle on when I prepare to head into a negotiation, whether on a new business with a new partner or when handling my plumber.

  1. Always make sure you know what your adversary wants
  2. Know what they are constrained by
  3. And have a real viable Plan B

Let’s start with the last one as this is one that few people use and it is arguably the strongest and straightest arrow you’ll have in your quiver.

You really do need to have another real option. Whether it is the other plumber that you spoke to last week or another partner that can also do the job, you need to have a fallback. Not having a Plan B puts you in the weakest position anyone can be in a negotiation.

Think about asking for a salary increase because you feel you deserve it and you’ve been working hard. Sound familiar? Get in line…

This is how it almost always goes:

You: “Boss I think I need a raise because [add in whatever reasons you could think of]…”

Boss: “While I appreciate [add in the usual responses], I don’t think I can argue for a raise now with HR, but let’s keep this top of mind [or something to that affect]…”

Result: no raise and you feel frustrated.

Now how about this scenario:

You: “Boss, I’ve been approached by [add in name of known competitor or other company]. They’ve made a compelling pitch and while I really want to stay here as you know I love the company, it is something I’m considering, especially as my salary has stagnated of late and they’re coming in much higher.

Boss: “What are they proposing?

Result: You usually get your raise.

Now before everyone starts running out and using this strategy, does it really work? I used it once and I got a 20% increase, by the way. However remember that Plan B: it needs to be a viable option. You can’t just make up being approached by another company as you know your bluff might be called, especially if your boss knows you’ve been working so hard that it is highly unlikely anyone would have even had the time to contact you. You actually need to have something lined up and you need to be ready to follow through on it.

I don’t mean you need to have a job offer, but you need to have initiated some form of discussion where it is plausible enough that you could follow through and hence leave your company for better pay – even if that isn’t your end-game. Your end-game in this above case is getting a better salary not leaving your company.

So now let’s look at those other two options. Both of them would actually play a role in the above example.

What does your boss want? Well if you’ve been working hard and delivering good value (and let’s be honest if you haven’t it is always so much harder to then ask for a raise), I guess the desire would be for you to continue working really hard.

And what is the constraint? Well if you leave your boss needs to go out and replace you and that takes time and effort. Also your boss might just be about to leave on vacation and you leaving at such a time would not be easy for your boss to manage.

Sometimes one needs to look for the constraints. Negotiation is also about making opportunities to get one step ahead.

That’s also where the art comes into play. Like the trained eye of an artist you need to be able to seek out and see the constraints, the desires and build up your strategy around them, while always having a viable Plan B.

The CFO

 

4 Comments

  • ZEMIROU Edith

    Bonjour
    Excusez-moi de répondre en Français, mais mon niveau d’Anglais écrit ne me permet pas d’exprimer toutes les finesses de langage que je souhaiterais.

    Cet article est extrêmement intéressant, MAIS ces conseils me semblent s’adresser plutôt à des Collaborateurs de statut élevé dans l’entreprise. Ils sont plus à même de “négocier” en essayant de faire pression sur leur Patron ou leur Directeur.
    Les employés subalternes n’ont pas la même latitude.
    Un exemple significatif: une personne qui travaille depuis 3 ans dans le même service et a été embauchée au minimum (SMIC + 1%) souhaite être promue à l’échelon supérieur. Son Chef de Service est d’accord et lui dit qu’elle mérite amplement cette promotion (qui lui ferait gagner 100€ de plus par mois). MAIS il n’y a pas de support financier disponible !!!! Et en plus, ce Chef souhaite la garder car elle est “un des piliers de l’équipe”……..
    NEGOCIATION: L’employée essaie, à contre coeur de négocier un départ dans un autre service…. à condition d’avoir la promotion. Le Chef de l’autre service la reçoit et est d’accord pour la prendre mais n’a pas de support financier pour lui accorder la promotion.
    RESULTAT: déception de l’employée et frustration. Fin de la négociation.
    OPTIONS RESTANTES:
    – quitter l’entreprise?
    – continuer à travailler sans perspective d’avancement en attendant qu’un collègue s’en aille et libère un support?
    – trouver un moyen pour joindre le responsable de la création des supports financiers?

  • ezemirou

    Cet article est extrêmement intéressant, MAIS ces conseils me semblent s’adresser plutôt à des Collaborateurs de statut élevé dans l’entreprise. Ils sont plus à même de “négocier” en essayant de faire pression sur leur Patron ou leur Directeur.
    Les employés subalternes n’ont pas la même latitude.
    Un exemple significatif: une personne qui travaille depuis 3 ans dans le même service et a été embauchée au minimum (SMIC + 1%) souhaite être promue à l’échelon supérieur. Son Chef de Service est d’accord et lui dit qu’elle mérite amplement cette promotion (qui lui ferait gagner 100€ de plus par mois). MAIS il n’y a pas de support financier disponible !!!! Et en plus, ce Chef souhaite la garder car elle est “un des piliers de l’équipe”……..
    NEGOCIATION: L’employée essaie, à contre coeur de négocier un départ dans un autre service…. à condition d’avoir la promotion. Le Chef de l’autre service la reçoit et est d’accord pour la prendre mais n’a pas de support financier pour lui accorder la promotion.
    RESULTAT: déception de l’employée et frustration. Fin de la négociation.
    OPTIONS RESTANTES:
    – quitter l’entreprise?
    – continuer à travailler sans perspective d’avancement en attendant qu’un collègue s’en aille et libère un support?
    – trouver un moyen pour joindre le responsable de la création des supports financiers?

  • the CFO

    Plan B needs to be viable and put in place before a negotiation starts. In the example above the employee did not have a real Plan B, hence the negotiation would be bound to fail. The employee needs to know the constraints as well prior to the negotiation. He/she would have needed to understand what financial constraints existed. There are ways to get this information that can then be used. If this information had been obtained, the negotiation would never have been started as the employee would have known it was bound to fail.
    I can’t outline what Plan B needs to be as each case is different, but what is important is that it needs to be in place and it needs to be something that can be turned on – it needs to be certain.
    Thanks for the comment.

  • Edith Zemirou

    Merci pour votre réponse.
    Je comprends votre point de vue. Mais il est en grande partie dicté par votre fonction. J’avais la même vision des choses quand j’occupais les fonctions de Proviseur de Lycée et je m’étonnais parfois de l’ignorance des règles de fonctionnement manifestée par les jeunes enseignants débutants.
    Cela rejoint un peu votre article “Competencies versus Experience”…. quand on débute, on n’a pas l’expérience acquise au fil des années !

Leave a Reply, Comment or Anything else that comes to mind

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: