Negotiating is an everyday thing. You do it when you wake up, just before breakfast, as you try get your kids ready. You do it as you make your way through traffic or on the metro to work, negotiating your space, who is first in the line, who merges first in the traffic. You definitely do it at work. In fact negotiating is omnipresent in our lives, but how good are we actually at it? Why don’t we learn it at school and how can we get better at it? Are you a top negotiator? Want to be one?
The starting point
Negotiation is the skill of getting what you want, while offering in exchange what someone else wants. It is a form of exchange. An agreement, if that makes more sense, to exchange something.
Negotiation always starts with one thing: an objective.
To be successful in any negotiation one must know exactly what the objective is. This is essential as if the objective is not clear, then the negotiation can never be successful.
Often when a negotiation starts, we might believe we know what the objective is, but actually what we have in mind is actually something annexed to the real objective.
We may start negotiations to buy a house and our objective may be to get the price down to our target price. We may start with a low offer in the negotiation, and then gradually try argue why the seller’s price is not realistic or why it needs to be reduced given certain defects that would need to be corrected.
Soon, we may start other techniques to get the seller to concede. We may fain disinterest or allude to another house we are looking at, and that may help somewhat – or it may not help at all.
However as we go through the process, we may soon realize that the objective is not the monetary objective but the house itself and that changes completely how we go about the negotiation.
We may then accept the seller’s price and the house could be ours. However, it may be too late and the seller may have accepted another offer.
If we had known what the real objective was at the start, it would have saved us not only time and effort but helped us get to our goal of attaining the objective right away and lowered the risk of us failing in the negotiation.
So before you even start negotiating, make sure you are very clear on what your objective is.
Once the objective of the impending negotiation is clear, the next step is active preparation for the negotiation discussions or exchanges.
This is not where one enters the tactics of back and forth negotiation, that comes later. Preparation encompasses understanding more about the product, service or, generally, the objective you are after.
Simple example: the plumber.
You want to change your water boiler and you need to negotiate the service with a plumbing firm. Before you rush into the techniques, you really do need to know more about the various types of boilers you might need, their cost and their time to install. this will prime you with the necessary equipment or knowledge required to adequately undertake your negotiation.
You will be able to discuss with the plumber when he proposes the boiler models and starts talking about time to install. Knowing more about how your plumber would undertake the work you are after, enables you to more adequately negotiate with him.
This made sound simple and obvious, but you’d be surprised the number of times we go into negotiations without the necessary preparation.
The best way to know you weren’t prepared? You feel “cheated” after the negotiation.
A successful negotiation means each party comes away feeling satisfied they they reached a good conclusion.
Understanding who you are up against
Preparation is not only limited to the product or service you are after, it is also about knowing more about the person or persons you will be negotiating with.
This is sometimes more difficult than knowing more about the product or service you are after. After all, it is not always easy to know more about the plumber you will be talking to.
There are, however, various ways to obtain information. The first way is similar to the one above, in that one needs to try solicit information from as many sources as one can.
Do you know anyone who already used the plumber and can talk about him/her, the type of person they are and the quality of their work?
Can you find out about the financial strength of the plumbing company or how busy they are (or not)?
The goal here is to accumulate the maximum amount of information on the actual person you will be talking to, and negotiating with, in order to start selecting the techniques you might try during the negotiation.
The second way to accumulate information about the person you are negotiating with happens in a very dynamic way and that is during the negotiation.
No successful negotiation occurs without small talk. Small talk doesn’t waste time, it actually provides you with the information on your adversary that you may not have been able to obtain prior to the negotiation.
For our plumber, we can ask if he/she is busy, we can ask about the quality of what they do, what products they use, how long they have been in business or anything else that might help in the actual negotiation.
Obtaining this information helps us ascertain if our adversary is constrained somehow.
Knowing constraints helps us better position our negotiation. This is an essential point to grasp for a negotiation to be successful.
Knowing the constraints
A constraint is an adversarial weakness that can be exploited before and/or during a negotiation. Constraints go from the obvious to the complex.
The obvious constraints are things like the need for money fast, or the need to finish the negotiation quickly. Time and money constraints are fairly easy to exploit.
If an adversary needs to finalise a negotiation quickly, dragging one’s feet can quickly give an advantage.
If an adversary needs quick money more than anything, then they might be willing to sacrifice things that you want, if you offer up the money within the time frame they need it.
Other constraints may be more difficult to spot and this is where the art of simple, well placed questions can help identify them.
An adversary may not have personal skin in the game during a negotiation or you could be up against someone who doesn’t like or respect the company they are working for. Knowing that can help you extract more value from a negotiation, by playing on the “mean” company angle or offer to go quickly or help them shine by giving up things that have little value to you.
Using the Pause to your advantage
When a constraint is spotted and one if not sure how best to use it in the heat of the negotiation or if you feel under pressure and that things are slipping away, use one of the best kept secrets of negotiation: the Pause!
Calling time for an organic break or because you have another urgent matter to deal with, or whatever other excuse you can think of can be highly effective. It can cause your adversary to lose momentum and allow you to gather your thoughts and better prepare for the next session.
But the Pause doesn’t need to be long. You can also use micro-pauses in the conversation.
Most people are not comfortable with silence, and when someone stops speaking, someone else usually starts to fill the silence. Use that! The more your adversary speaks, the more they help you uncover their constraints. Try this powerful skill in any conversation. Pausing effectively causes the person you are with to start talking.
A micro-pause can also be disconcerting, especially if you keep your eyes locked with your adversary. It creates a sub conscious idea that you have the upper hand, know something your adversary doesn’t, and can destabilize your opponent.
I’ve found the Pause to be an extremely powerful technique in any negotiation.
Have a Viable Plan B (if you can)
It is not always easy to have a Viable Plan B in all negotiations, but if you really want to come out on top, nothing works better than a Viable Plan B. 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, in a negotiation.
Let’s look at a not so obvious Plan B situation : asking for that raise.
You want to ask for a salary increase because you feel you deserve it and you’ve been working hard.
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.
This isn’t the case of a Bluff. A Bluff is someone you never want to use in a negotiation, as it can backfire and speed up you losing.
A Plan B needs to be a viable option. You actually need to have something lined up and you need to be ready to follow through on it. this is of utmost importance in the use of Plan Bs.
If you can’t have a Viable Plan B, then all is not lost as you may still have something the other person wants and negotiation can still happen.
The other success factors
To be successful you also have to employ a few other key capabilities.
Control your emotions
This is important for any negotiation, even the most difficult and contentious ones. Allowing emotions to take control during a negotiation will almost always lead to your downfall.
If you paid attention during the notes on how best to prepare and know your opponent, you will have already guessed that active listening is a key skill. So much so that I wanted to point it out again. You need to be able to listen closely to the other person. You need to be able to read body language. The more skilled the negotiator, the more time they spend listening to their adversary.
Knowing when to Anchor
Anchoring involves putting down what you propose at a certain time during the negotiation. Usually this isn’t right away but it really depends on the negotiation. Some people drop their Anchor right off the bat and use it as a ceiling above which they won’t be able to go. This early anchor technique can be efficient when you the negotiation is fairly straightforward and you don’t want to waste time peeling in further value.
A mid anchor is usually the most appropriate as it enables you to learn enough about your adversary and then lay down your value proposition.
Knowing when to anchor is a question of being able to read your opponent and read the negotiation and where it is going. Don’t worry if you don’t get this right all the time. As with any skill, the more you practice the better you get.
“When the final result is expected to be a compromise, it is often prudent to start from an extreme position.” ―
Every negotiation is different and it never boils down to starting from extremes. Make sure you prepare, prepare and then prepare some more. Known your adversary and spot his/her constraints. Have a solid Plan B and know exactly what you want.
With these simple basics and lots of practice you’ll be an ace negotiator in no time at all.