We all know that it is tough to do a good job of negotiating a deal. In fact, many people dread negotiation, not recognizing that they negotiate on a regular, even daily basis. Most of us face formal negotiations throughout our personal and professional lives in many different forms during which we all use many different forms of negotiation styles and negotiating techniques: bargaining over the price of a new car, discussing the terms of a new job offer, or hammering out a contract with a supplier.
Then there are the more informal, less obvious negotiations we take part in daily: persuading a child to eat his food, working out a conflict with a coworker, or convincing a client to accept a late delivery of a product or a service. Like it or not, you are a negotiator. What we need to realize is that everyone negotiates something every day. What do these negotiations have in common, and what tools should we use to get what we need out of our everyday negotiations? In the end, these are the questions that every negotiator needs to find answers to.
What is A Negotiation?
The experts define negotiating as a “…back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed.” Other experts define negotiation using similar terms.
Negotiation has been referred to as being an “interpersonal decision-making process” that is “necessary whenever we cannot achieve our objectives single-handedly.” Another way to view negotiating is to think about it as being when two or more parties need to reach a joint decision but have different preferences, this is when they negotiate. Together, these definitions encompass the wide range of negotiations we carry out in our personal lives, at work, and with strangers or acquaintances.
The Seven Key Elements of Negotiations
The bad news for most of us is that most people are not natural-born negotiators. The good news for us is that research consistently shows that most people can significantly improve their negotiation skills through education, preparation, and practice. A framework has been developed to help people prepare more effectively for negotiation. This framework describes the essential tools needed to identify our goals, prepare effectively to minimize surprises, and take advantage of opportunities as they arise in negotiation. The framework consists of seven elements:
- Relationships: Whether you have an ongoing relationship with the other side or don’t think you’ll ever see them again, you need to manage your relationship as your negotiation unfolds. Relationship dynamics become all the more important when you have an ongoing connection: your reputation, future business, and your relationships with others may hang in the balance. You can strengthen the relationship by taking time to build rapport and by making sure that you meet your own ethical standards throughout the process.
Interests: Interests are some of the fundamental drivers of negotiation – these are our basic needs, wants, and motivations. Often hidden and unspoken, our interests nonetheless guide what we do and say during a negotiation. Experienced negotiators take the time to probe the other side’s stated positions to better understand their underlying interests.
Options: In negotiations, options refer to any available alternative choices parties might consider to satisfy their interests, including conditions, contingencies, and trades. Because options tend to capitalize on both sides similarities and differences, they can create value in negotiation and improve everyone’s satisfaction.
Communication: Whether you are negotiating in person, online, or via phone you will take part in a communication process with the other side. The success of your negotiation can hinge on your communication choices, such as whether you threaten or give in, brainstorm jointly or make firm demands, make silent assumptions about interests or ask questions to probe them more deeply.
Legitimacy: The quest for a legitimate, or fair, deal drives many of everyone’s decisions in negotiations. If you feel the other side is taking advantage of you, you are likely to reject their offer, even if it would leave you better off. To succeed in negotiation, we need to put forth proposals that others will view as legitimate and fair.
BATNA and Alternatives: Even as we take part in negotiations, we need to be aware of our alternatives away from the table — what we will do if the current deal doesn’t pan out. Negotiation preparation should include an analysis of your BATNA, or best alternative to a negotiated agreement.
Commitments: In negotiations, a commitment can be defined as an agreement, demand, offer, or promise made by one or more parties. A commitment can range anywhere from an agreement to meet at a particular time and place to a formal proposal to a signed contract.
What All Of This Means For You
Although many of us may dread having to go into our next principled negotiation, it turns out that we spend a great deal of our time in negotiations all ready. We negotiate with family members, coworkers, and people that we meet everyday. In order to become more comfortable negotiating and to become better at it, we need to realize that there are seven key elements that make up every negotiation.
Negotiations are all about relationships. We need to manage our relationship with the other side no matter if this is the start of a long term relationship or a one-off. We need to understand that shared interests are going to be key to our ability to secure a deal. In every negotiation that we participate in we always have options and we need to remain aware of what they are. Our ability to clearly communicate what we want to the other side will play a major role in helping us to get the deal that we want. We’ll only be able to get the deal that we want if the other side sees our offers as being legitimate. We always have alternative to a negotiated deal and we have to remain aware of what our BATNA is. No deal will be possible if both sides are not committed to fulfilling the promises that they make during the negotiation.
Armed with a better understanding of these seven building blocks of negotiation, you are positioned to learn more about how to prepare to create and claim value in negotiations, manage concerns, and reach the best deal possible — both for you and for the other side.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: How do you think that you can tell if the other side is going to keep up their side of the agreement?
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What We’ll Be Talking About Next Time
As negotiators, we all believe that when we reach the end of a negotiation and have a deal that both sides can agree to, the deal is done. This is the time that we start to pack up our negotiation styles and negotiating techniques and move on to our next negotiation. However, there will be those times that things don’t turn out the way that we thought that they would. What can happen is that once the deal is done, there is always the possibility that the other side will demand a renegotiation of the deal. This can both surprise and anger you – why did they agree to deal if they now want to renegotiate it? When this happens, you need to keep your anger under control and follow the following guidelines on how to proceed with re-negotiating with the other side.