How to negotiate really good deals http://www.qed-consultancy.co.uk Copyright Jeremy Thorn QED www.qed-consultancy.co.uk en-us Plan your case meticulously. Knowledge is power, especially in a negotiation More deals go wrong because of the lack of preparation than for any other reason. Engineering Adventures Ltd 2007-03-25 Set clear goals. Differentiate between what you must have, and what you would like Be absolutely firm about this. A 'must have' is any issue which, if you can't win, would be cause for you to walk out on the deal. Decide these before you start. This will give you much greater resolve during your negotiation. It will also focus your mind on what you really needed and what was only 'nice to have'. Engineering Adventures Ltd 2007-03-25 Research your best guess as to what the other side might want, and separate their issues into likely 'must haves' and 'would likes' If one side's 'must haves' are just not realistic, a deal may not be possible. Not every situation is negotiable, so don't waste time on trying to do a deal that is not possible. Equally, if you can win what you want without having to negotiate, don't! Engineering Adventures Ltd 2007-03-25 Find out who will be negotiating for the other side Try to establish their preferred style, perhaps from past negotiations. Check out any special characteristics or favourite ploys which they may be prone to adopt. Remember, forewarned is forearmed! Engineering Adventures Ltd 2007-03-25 Note that negotiating means that both sides need to trade concessions in order to come to a resolution If one side genuinely has nothing to concede, there cannot be a negotiation. The other side may then wish to offer concessions in return for nothing, but this is not what true negotiation is about. Engineering Adventures Ltd 2007-03-25 Decide what you might be prepared to trade, to achieve what you want The secret of good negotiating is to offer something which the other side might value more than you do, in return for something of even greater value to you. Engineering Adventures Ltd 2007-03-25 Search also for variables in their case, which you might seek in return for whatever they might want from you Negotiation is about the two-way trade of concessions. Skilled negotiators always look for something in return. Engineering Adventures Ltd 2007-03-25 Negotiate only when both parties are willing in principle to do a deal This means that both parties must have the power to vary the terms of the agreement. If one side does not have this authority, the other side should insist on talking to whoever does. Engineering Adventures Ltd 2007-03-25 Check out both side's relative power base Remember, it is perceived power that matters most. Your job is to make your side appear to be more powerful than theirs. The side with the greatest power is the one most likely to win, so this is critical. Engineering Adventures Ltd 2007-03-25 Be brave in seeking concessions from the other side If you don't ask, you won't get! One of the key skills in negotiation is to ask for as much as you can. So be ambitious - aim high. Engineering Adventures Ltd 2007-03-25 Note that those who ask for less are generally satisfied with less, and win less Good negotiators always win more than others because they ask for more. Engineering Adventures Ltd 2007-03-25 Choose the negotiating team for your side which is best suited to the situation Trust, respect and integrity between both parties are essential components of a sound deal, as are your team's negotiating skills, experience and knowledge. So choose your team with care. Engineering Adventures Ltd 2007-03-25 Be patient in your negotiating style The best results come to those who are prepared to wait. So be ready to take your time. Engineering Adventures Ltd 2007-03-25 Be positive in outlining your case If you don't believe in it, nor will the other side. Engineering Adventures Ltd 2007-03-25 Know that in any negotiation, shared trust is critical If ever your side's integrity, credibility and influence is lost, your ability to do a deal will be severely damaged. If you fear this has happened, change your team. Engineering Adventures Ltd 2007-03-25 Remain placid when you negotiate. It costs nothing to be polite Ignore any barbed comments the other side might throw at you. Temper tantrums might be used to create an advantage, but more often they result only in the loss of goodwill and respect. Engineering Adventures Ltd 2007-03-25 Focus clearly on what you want and put any fine feelings to one side This is especially the case in hostile negotiations where the other side's intention might well be to destabilise you emotionally. Engineering Adventures Ltd 2007-03-25 Show respect for the other side, however unreasonable you think they really are Once respect is lost, a reasoned negotiation may well descend into no more than a brawl. Engineering Adventures Ltd 2007-03-25 Invest time in understanding the other side This does not mean you have to agree with them, but it will help you to build a better relationship with the other side and help you to avoid personalised and unfruitful argument. Remember, most people would rather be understood than win petty gains. Engineering Adventures Ltd 2007-03-25 Aim for an environment which is cordial, co-operative, business-like, brisk but not brusque These are all ways to signal that you are a professional negotiator whom the other side can trust to be fair, if hard. Engineering Adventures Ltd 2007-03-25 Be clear who is representing their side and what they do Try to establish who is the most senior and check that they have the power to agree a deal. You don't want to find that the deal you thought you had agreed is going to be over-ruled by someone more senior at a later date. Only negotiate with those who have the authority to do the deal you want. Engineering Adventures Ltd 2007-03-25 Start the negotiation by clarifying what each side is seeking from the meeting, and agree the agenda and a timescale It is important to do this at the start to avoid any surprises later on. Engineering Adventures Ltd 2007-03-25 Check that the other side does want to reach agreement, in principle There is no point in negotiating with someone who has no intention of settling with you. Engineering Adventures Ltd 2007-03-25 Highlight points of commonality and summarise neutrally why you are both meeting Stress the benefits of both sides reaching agreement. Your first aim is to build a collaborative atmosphere if you possibly can. Engineering Adventures Ltd 2007-03-25 Resist any temptation to make provocative or inflammatory comments, or ask leading questions Otherwise, you are more likely to end up with damaging recriminations and argument, rather than any attempt to resolve your differences. Engineering Adventures Ltd 2007-03-25 Listen carefully to their opening statements and note them down There may be many useful clues here about what they really want and what they truly feel about your case, which they might not want to make overt at this stage. Engineering Adventures Ltd 2007-03-25 Respond with a clear summary of your case, in measured tones This does not need to specify any particular demands at this stage - these can come later - but you should specify the issues on which you seek resolution. Engineering Adventures Ltd 2007-03-25 Use collaborative language "Would it be helpful if we agreed an agenda?" "May I suggest we..?" Listen to skilled negotiators - they tend to do this instinctively. Engineering Adventures Ltd 2007-03-25 Establish all of the other side's key issues before starting to negotiate, to prevent them raising new issues later on Then try to get them to prioritise these issues, to check out which are their 'must haves' and which are probably only their 'would likes'. Engineering Adventures Ltd 2007-03-25 Clarify the other side's opening statements and probe them You need to know exactly what they think their case is founded on. Ask for facts and figures, rather than dwell on the emotions of their position, without showing signs of either acceptance or rejection. Engineering Adventures Ltd 2007-03-25 Check your own initial assumptions about their case For example, if you are selling, don't assume, that your price is the sticking point. It may well be your delivery record or product/service quality. You may never know if you don't ask! Engineering Adventures Ltd 2007-03-25 Explore across the whole front If you have to concede an issue in one area, such as price, link it to something you want back in exchange in another area, such as more favourable payment terms, guarantee or delivery. This will help to prevent 'salami slicing', where each issue is isolated and negotiated separately (ie in slices), possibly to your disadvantage. Engineering Adventures Ltd 2007-03-25 Look for possible variables in their case ie the concessions you may well be able to squeeze out from them in return for what you want in due course. Engineering Adventures Ltd 2007-03-25 Copyright Jeremy Thorn QED www.qed-consultancy.co.uk Jeremy Thorn is a prize-winning author and Chairman of Quantum Enterprise Development (QED), a multi-functional management consultancy and development company based in Doncaster, England, dedicated to making good businesses better, encouraging customers to be more loyal and to helping employees and suppliers be more effective. Engineering Adventures Ltd 2007-03-25