Articles > Positional and Mutual Gains Negotiating (Part 2)
Positional and Mutual Gains Negotiating (Part 2)
by David Bryson
Norton Media
Preparation
The amount and quality of preparation has a very significant impact on outcomes. Excellent preparation can give us a
huge advantage particularly if the other side has not prepared well (and this is highly likely!)
The amount of time that we should dedicate to preparation will obviously depend on the value/importance of the negotiation.
For more important negotiations, I suggest the following approach.
- Understand the environment in which you are negotiating, perhaps by conducting a PEST (political/economic/social/
technological trends) analysis. (The process of conducting such analysis is likely to lead to more profitable outcomes by
flushing out issues that have not previously been considered. For example, you might anticipate changes in technology
that will take place during the lifetime of the contract that need to be taken into account in the substance of that contract.
Furthermore, the analysis might sensibly affect the way that you negotiate.)
- Make sure you understand higher strategies e.g. group, corporate, divisional, departmental, project strategies. Any
deal that we do needs to be in line with these strategies.
- Gather relevant information e.g. on their industry, their company, your competitors, their competitors, other suppliers/
customers, them as individuals, previous contracts, market data, sales data - the list of possible useful information is
likely to be long.
- Then commence detailed planning:
- List variables i.e. the things we are negotiating, prioritise them, set MSPs for them, and calculate the value of each
(it's important to know where the "money" lies in a contract, though not always obvious).
- Then do the same for the other side. (Obviously we need to make assumptions to do this.) Try to spot variables that
are high on your priority list but low on theirs - you shouldn't pay much for these; and variables that are high on their
priority list but low on yours - make sure you get plenty in return for these!
- Set your goal for each variable.
- Conduct a strengths-and-weaknesses analysis of yourself and the other side. You'll then be in a position to exploit
your strengths and their weaknesses.
- Consider what your attitude and behaviour should be during the negotiation.
- Anticipate their attitude and behaviour.
- Decide where you should meet and who should be involved on your team (and find out who's going to be on their
team).
- Of course, there is more that we can do to prepare well. In particular, there are many "what-if" scenarios that we should
consider - preparation is about cutting out surprises. But this will do for now and we've probably covered the more important
aspects.
Of course, there is more that we can do to prepare well. In particular, there are many "what-if" scenarios that we should
consider - preparation is about cutting out surprises. But this will do for now and we've probably covered the more important
aspects.
Talking and listening
In negotiation, talk less, listen more. When you are talking, you are giving away information, and information is power.
What we should be doing is asking good, succinct questions and then listening carefully to what the other side is saying
to us.
This advice can be particularly difficult for salesmen to follow. Their skills include persuading others to buy their product
through talking. There comes a point in every commercial interaction when the selling stops and the negotiation starts.
Negotiation is a completely different activity to selling, requiring different behaviour.
Much to most people's surprise, persuasion hardly comes into it. Negotiation is more to do with threat and emotion. I
should add straight away that threats are often implied rather than overt. The most common form of threat is that you will
not come to an agreement with the other side. They know this and may not need reminding of it. Even when a threat is
overt it is usually best delivered obliquely e.g. "I was talking to your main competitor X yesterday, and they can give us
what we want at a lower price. However we would rather continue the relationship with you."
There are a number of other legitimate reasons for negotiators to talk - for example, making the other side well-disposed
towards us. We want them to like us. Also, we need to provide enough information to allow others to give us what we
want. But try to talk as little as possible in achieving these ends.
Successful negotiation is more to do with excellent listening skills. Recognise the difference between hearing (an aural
impulse) and listening (an intellectual process.) To listen well:
do
- sit up straight and concentrate
- make (non-threatening) eye contact with the speaker
- expect to be interested
- listen for the words behind the words - what's he/she really saying
don't
- allow yourself to be distracted by other thoughts
- interrupt
- jump to conclusions before the speaker has finished
- dismiss what's being said as being irrelevant or uninteresting.