Business owners and senior managers routinely find themselves in negotiations. They may be negotiating with customers, unions, lenders, insurance companies, vendors, acquisition targets, potential buyers or employees.
Too often, when the word negotiation comes to mind, one pictures a situation that is adversarial, angry and angst ridden. Sometimes that picture is real. However, it need not be and, if at all possible, should not be.
In order to have meaningful and successful negotiations, keep the following tips in mind.
Keep your expectations high. World class athletes do not compete for second place. They set their sights on lofty goals, whether it be a professional championship, a world record or an Olympic gold medal. Even if they do not achieve that particular goal, they make substantive strides forward.
In business negotiations, you should set your sights on the best possible outcome while bearing in mind you may not achieve it. But, even if you don’t, you may well achieve enough to close the deal.
Stay in “take it or leave it” situations as long as dialogue continues. Even if you feel that you’ve reached an impasse, as long as the other party is willing to talk, there’s a chance to succeed.
Price and cost are only one of your variables and are often the least persuasive. Don’t start with them; build a foundation of logic and appeal that will support both of them.
Use your powers of persuasion, knowledge of your needs and knowledge of their real needs to move them closer to your perspective. Remember, rarely does an argument carry the day.
The first person to talk, loses! Not always true, but learn to listen and to commit later rather than earlier. Don’t be too anxious to make your points early. Let the other party talk, because they’ll often reveal the key for your success.
Deal with some of the smaller issues first, build positive momentum, establish rapport and then move on to the bigger or tougher issues. Some might think that if the big issues are taken care of, the little ones will fall into place. More often than you might think, it’s the little issues that derail the process.
Focus on your needs as well as theirs. Don’t be such an altruist that you give out of proportion to what you gain in return. The law of business balance should prevail.
Offer concessions only when there is something of value received in return. And, the something of value should be in proportion to the concession.
Quickly discern the negotiation pace at which your customer is comfortable while keeping positive momentum and achieving a series of agreements.
If the negotiations become heated or angry, try to defuse the situation. It may be best to take a break to cool off or to continue the negotiations another day.
The old adage, “Rome wasn’t built in a day,” may well apply. You may have to go through a series of “smaller” negotiations to bring the overarching negotiation to a successful conclusion.
About the Author
L. Douglas Mault is president of the Executive Advisory Institute, Yakima, Wash.
