The ability to negotiate is an important skill that we need in both our business and personal lives.
Chances are you negotiate each and every day as part of your work.
We see that skilled negotiators rarely “wing it”.
They approach negotiation with a well structured plan.
Focused preparation will help make negotiations a success.
It is important to identify in advance what your position is and
that of your counterpart.
These questions will help evaluate your negotiation position:
What is my goal?
A specific list of items is much better than a general idea. Take the example of applying for a new job.
Points to consider might be salary, vacation time and training. Knowing specifically want you want adds confidence and strength to your negotiating position. Being vague will only serve to lengthen the process and may result in key points being left out. Your position may be seen as a lot weaker if you don’t know what you want.
Where can I compromise?
Negotiation is a two-way process and it is likely you will not get everything you want. Instead, prioritise your demands to identify those that are of vital importance and those that have scope for compromise.
Plan alternative courses of action
It pays to analyse all the possible courses of action open to you if the negotiation is not a success. If you have not planned an alternative course you might make a snap decision and desperately take whatever’s offered during the negotiation. Always reserve the option of walking away to get a better deal.
Once we have identified our position it is time to turn our attention to our counterpart’s:
What is their goal?
Identifying what the other side wants increases the chances for making mutually beneficial agreements.
The negotiation itself is a sure sign they want something from you. Their position may have a range of limits (the price they can pay for your product or turn-round time for example) and these might be possible to discover in advance. Ultimately, if you don’t know what the other side wants you can always ask rather than be unprepared and surprised.
What do they value?
Once you understand what your opponent values you can gain a better idea of your negotiating position.
Say for example a company wants to do business because they want exclusivity rights to supply a certain
product then price becomes slightly less significant.
Why are they negotiating?
If somebody has a completely dominant position there would be no reason to negotiate. Understanding why they need to negotiate can add strength to your position, especially when it is unexpected. Consider an employee who has announced they are leaving. If the company tries desperately to negotiate with the employee it is signaling an improved contract could be available for negotiation.
What do they offer?
In most negotiations it is clear what the other side brings to the table. If it is not and you cannot see any possible benefit to negotiate, then save your time and energy and don’t participate.
What resources do they have?
Evaluating the extent of the other side’s resources and likely alternatives will help to improve your position.
Can they get want they want easily from somewhere else? Do you offer something that they don’t have and are willing to make concessions to get?
So remember the five P’s i.e. proper planning prevents poor performance and approaching negotiations without the correct amount of preparation could leave you short-changed.