How to negotiate really good deals http://www.qed-consultancy.co.uk Copyright Jeremy Thorn QED www.qed-consultancy.co.uk en-us Note that successful negotiators often create deadlock (ie stalemate) to their advantage They are used to 'aiming high' and minimising your concessions. Deadlock is a powerful tool to win an objective, so learn to expect it in tough situations. Engineering Adventures Ltd 2007-03-25 Get used to deadlock, perhaps in role play when it does not matter Most people find it extremely uncomfortable, but practice helps. Engineering Adventures Ltd 2007-03-25 Learn to relax when you reach stalemate Deadlock is not 'your fault' but, rather, to be expected in many situations. Engineering Adventures Ltd 2007-03-25 Continue to be positive and avoid being provocative Stress your desire to do a deal but do not make inflammatory statements. Engineering Adventures Ltd 2007-03-25 Restate/summarise and clarify both your case and theirs, concentrating on the future, not the past This will help to focus on the real issues at stake. Engineering Adventures Ltd 2007-03-25 Highlight points agreed and try to isolate the issues that divide you Often the latter might be shown to be trivial compared to the points you have agreed. Engineering Adventures Ltd 2007-03-25 Agree an agenda for moving forward and set a deadline for settlement For those who have created deadlock intentionally, this will help them focus on what is really important. But if you set a deadline, get the other's agreement to it. Otherwise you might appear more desperate to find a solution than will be helpful to your case. Engineering Adventures Ltd 2007-03-25 Recess - take a break for both parties to cool down and review the situation You might be astonished how often deadlock is averted shortly after such breaks. Engineering Adventures Ltd 2007-03-25 Divert the attention of the other side Perhaps with a new team, a different location, a change of emphasis or new variables. Engineering Adventures Ltd 2007-03-25 Keep something in reserve. It is often the smallest concession that can win the day when all other possibilities have been exhausted So keep the whole package in mind and take a judgement of what was really important, for both parties. Engineering Adventures Ltd 2007-03-25 Save your 'best' concessions to the end You may find you will never need to give them away. Engineering Adventures Ltd 2007-03-25 Be on your guard that they may be keeping their best concessions until the end too! So when you have a deal that looks quite favourable, be brave and reject it politely. Continue to see if they can possibly offer you just a little more. Engineering Adventures Ltd 2007-03-25 Note that deals agreed under duress rarely hold for long So try to ensure the deal you have agreed has at least some advantage to the other side. Engineering Adventures Ltd 2007-03-25 Check that both sides are agreed on what they have agreed If you don't do this, the deal may easily fall apart if there have been any misunderstandings, with a consequent loss of goodwill. Engineering Adventures Ltd 2007-03-25 Make sure you have dealt with everything before you close Avoid adding any new points at this stage as this will almost certainly put the rest of the deal at risk. Engineering Adventures Ltd 2007-03-25 Reject any new points that the other side might seek to add at the end And don't let them distort the agreement by adding new weight to old points in their favour. If the other side insists on adding new points, say you can consider them, but you will have to start the negotiation all over again if so. Engineering Adventures Ltd 2007-03-25 Try to stay poker-faced at the end of the deal However delighted you are, try not to show it! Otherwise they will think they have been taken advantage of. Engineering Adventures Ltd 2007-03-25 Congratulate the other side on having negotiated so ably and successfully Tell them what a good deal they have won. If they don't believe this, they may want to renegotiate or even abandon the deal. Engineering Adventures Ltd 2007-03-25 Ratify formal agreements in writing, to agree what you have agreed, and ask both parties to sign If you can, be sure that you volunteer for this job. You don't want to run the risk of the other side doing this and perhaps re-writing the deal in their favour. Engineering Adventures Ltd 2007-03-25 Be aware that research shows that negotiators rarely acknowledge they did a bad deal So when you get back, analyse ruthlessly what happened. Could you have won a better deal? Check any assumptions you may have made incorrectly, decide if you could have asked for more than you did and see if there were any demands from them which you might have resisted more strongly. That way, you will do better deals next time. Engineering Adventures Ltd 2007-03-25 Record the key features of this negotiation, most especially if you are likely to meet again This helps if you need to re-negotiate annual contracts for example. Note the key personalities and their styles, so you are better prepared next time. Engineering Adventures Ltd 2007-03-25 Prepare your case fully, and try to establish theirs in advance Never 'go along to see what the other side has to say'. This can only suggest you haven't prepared properly! Engineering Adventures Ltd 2007-03-25 Make sure, if you are working in a team, that you have the requisite skills and knowledge between you Check that you are a compatible and mutually supportive team with common objectives, and have clearly allocated duties, such as (apparent) leader, note-taker/secretary, observer and time-keeper. If you don't feel the team is right, change it. Negotiating in a team is much harder than working on your own. Engineering Adventures Ltd 2007-03-25 Keep a firm eye on your 'must haves' Don't let the 'would likes' or prepared strategy get in the way of doing the deal you really want. Engineering Adventures Ltd 2007-03-25 Use the 'power of limited authority' - so leave your boss at home! Then you can say: "I'd like to agree with you, but my boss wouldn't let me.. " Engineering Adventures Ltd 2007-03-25 Remember that quick deals tend to produce extreme results: Good for one side maybe, but often bad for the other. So give yourself plenty of time to do a deal and, if you are up against a tight timescale, try not to show it! It can only diminish your power base, significantly. Engineering Adventures Ltd 2007-03-25 Note that most settlements occur shortly before an agreed deadline So setting an agreed time limit may not only accelerate agreement, but also provide a helpful way out of deadlock. Engineering Adventures Ltd 2007-03-25 Listen carefully to the 'music behind the words' of what the other side says For example, "We don't normally allow.. ' almost certainly means that they do, for those who ask! If you ignore their signals, you may only prolong unnecessary argument. (And always challenge: "It is not our policy to.. " All policies can be changed given sufficient reason!) Engineering Adventures Ltd 2007-03-25 Keep looking for variables in their case, to find concessions you might seek in return for giving them what they want This is especially helpful if the other side offers you a 'take it or leave it' proposition. Engineering Adventures Ltd 2007-03-25 Explore the other side's signals If you are ever in any doubt, ask what they meant. It is much better to do this than let a signal pass by. Engineering Adventures Ltd 2007-03-25 Use signals yourself, to hint at what you might be prepared to accept in return for the right offer from them If they ignore these, repeat them in a new form until they are picked up and responded to. Engineering Adventures Ltd 2007-03-25 Make your signals as clear as you can without prejudicing your position So signal what kind of negotiator you are, what has to be achieved, what you want and your preferred agenda. Avoid confusing signals, such as overly quick concessions, which may suggest to the other side that there is more on offer if they fight you hard enough. Engineering Adventures Ltd 2007-03-25 Be sure you are clear what is important to you (ie your 'must haves') Keep these firmly in mind. Otherwise, you may well get a deal, but not an acceptable one. Engineering Adventures Ltd 2007-03-25 Listen more and talk less! Smart negotiators tend to say very little They want information, and they don't get this by talking. Engineering Adventures Ltd 2007-03-25 Be aware that an aggressive style can quickly turn a reasonable 'win-win' deal into competitive deadlock Possibly even to 'win-lose' (where there will be little room for fine feelings) - and even 'lose-lose'. So try to avoid creating this style of negotiation if you can, unless you are fully prepared for the consequences. Engineering Adventures Ltd 2007-03-25 Head off any opening belligerence from the other side from the very start Do this early because hard bargaining starts quickly with such a style and there is usually little time for opening niceties. Say you are willing to do a deal, but will walk out if they continue in this unacceptable manner. Don't let them highjack the agenda and stress that the deal has to offer something for both parties if it is going to stick. Engineering Adventures Ltd 2007-03-25 Keep your cool in an aggressive negotiation Don't respond to personal attacks and don't start any. This can only fuel aggression. Engineering Adventures Ltd 2007-03-25 Remember that aggressive, bullying or antagonistic negotiators are usually well practised in the art of fighting This may be where they are even most comfortable. This is another reason for being very cautious about either using such a style yourself, or letting the other side continue in this way. They may be better at it than you are! Engineering Adventures Ltd 2007-03-25 Take notes to absorb any attack, especially in the face of complaints Apart from ensuring you have a record of the basis of their case, it shows you are listening carefully to their point of view without necessarily agreeing with it. Engineering Adventures Ltd 2007-03-25 Build your power base to strengthen your case, and be sure you have researched the strength of theirs Don't be put off by any greater seniority of the other side; ignore it. And if you don't like their agenda, change it! Engineering Adventures Ltd 2007-03-25 Be aware of hidden agendas, such as workload, personal ego and undeclared objectives Find out what you can about these at an early stage to ensure they do not come to haunt you later on. Engineering Adventures Ltd 2007-03-25 Hold meetings at your choice of venue or at a neutral venue, if you can If you have to meet at their place, be prepared for tactical interruptions. And insist on changing the seating arrangements if you don't like them. Engineering Adventures Ltd 2007-03-25 Check for hidden issues concerning timescales, such as impending holidays, debt repayments, accounting periods If the other side is in a rush to conclude a deal, this must be to your advantage. Engineering Adventures Ltd 2007-03-25 Use positive phrases to promote cordiality Such as : "I'm sure we can settle this", "May we check with you what we're hoping to achieve together today. Is that acceptable to you?" Avoid inflammatory phrases such as: "No way", "With respect" (it rarely is!) or "You must be crazy!" Engineering Adventures Ltd 2007-03-25 Summarise the negotiation at regular intervals, especially in complex situations Make sure that both sides have fully understood all the issues and can then put them into their true perspective. You may well find that some 'difficult' issues are really not that important to the other side after all. 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