Learning to negotiate effectively in order to achieve organisational and career objectives can have a significant impact on long-term professional success. In general, skilled negotiators know what they want, are able to achieve their objectives and can do so without sacrificing personal and professional relationships.
Regardless of our natural talent for negotiating, we can all improve our skills in this area by embracing some basic principles, taking a structured approach to the process and practising over time.
For me, the most important aspect of any negotiation process is the trust factor: there has to be a mutual respect and trust between the negotiating parties. Anyone who can establish a level of trust from the outset will go a long way towards ensuring that the process is ultimately successful.
It is also absolutely essential to have clearly defined objectives before beginning and to know exactly what you want to achieve out of the process. Negotiations have to be flexible but they must always be structured and, to ensure this, it is important to have a clear set of goals:
- What you want to achieve
- How you want to achieve it
- How important the relationship with the other party is.
This last point is absolutely key, and should guide your approach. You can go into a negotiation with a ‘win-lose’ approach if you are buying a house and never expect to see the other person again. In business, however, there is a strong chance you will have future dealings with the other party.
Knowledge is power
Knowing the other party’s position, requirements, strengths and weaknesses makes it far easier to devise a good strategy and to ensure that you can end up with a win-win situation. If you go in believing the process is all about you, there is a pretty good chance you will fail. If you are going for a win-win outcome, the other party must leave the table feeling that they got something out of the negotiation as well.
You also need to know as much as possible about your own negotiating position beforehand and to decide where you stand on various outcomes. I usually prepare for four potential outcomes:
- The ideal outcome, which is very seldom achieved
- The ‘would like’ scenario, which skilled negotiators will usually achieve around 70 to 80pc of the time
- The ‘must have’ result, which really is the bottom line
- The scenario where you walk away because you have not achieved your bottom-line result.
If you find yourself in the fourth stage, ensure that when you walk, the negotiation has not irretrievably broken down. You never close the door so firmly that there’s no comeback: inevitably there always has to be a solution.
Timing is an essential element of striking a deal. A good negotiator needs to know when to concede and when to stand firm. It is never a good idea to concede early on in the negotiation as anything you throw out at the beginning is gone and you gain no benefit from it.
When training people to negotiate, I describe the ‘four forces’ of the process as power, information, timing and approach:
- The power refers to the power you have to carry out the process through your organisational position, your relationship with the other party and your authority to make decisions
- Information refers to your own objectives and what you know regarding what the other party wants
- Timing involves knowing when to be flexible and when to make concessions
- The approach should be honest, open and trustworthy, or should appear as such.
People adopt different approaches to negotiation, such as the haggling approach, starting with exaggerated demands. It is never advisable to go over the top on demands in the hope that you’ll get a certain percentage of what you ask for: do that and it may frighten the other party off before you’ve really begun or, worse, could lead to a total breakdown in the negotiations.
The vast majority of successful business people are good negotiators — it’s almost a prerequisite. Whether you are a CEO or stepping on to the first rung of the ladder, well-honed and practised negotiation skills are a key ingredient in business and career progression.
By Thomas Dunne
Thomas M Dunne is a senior management consultant and HR specialist with Irish Business Training.
This is an edited version of article that first appeared in Marketing Age magazine