By: Tamer Issa
All of life is a negotiation. We negotiate with our spouses, partners, friends and children. Anyone who is married knows that a great deal of negotiation goes on in the best of marriages. Kids negotiate their bedtime or getting more candy. Teenagers negotiate for the family car or some extra spending money or permission to stay out late. The world of business is no different. In corporate life, the annual budgets, business plans, goals and objectives against which success or failure is measured are all the result of a series of negotiations. So the prudent thing to do is to become an effective negotiator.
ALL SUCCESSFUL NEGOTIATIONS HAVE TO PROGRESS THROUGH THE FOLLOWING STAGES:
Explore:Understand the context of the negotiation, the needs and priorities of the other party.
Propose:Make the first proposal to anchor the negotiation.
Counter:Make counter-proposals to unlock value.
IN BUSINESS AS IN LIFE, YOU DON’T GET WHAT YOU DESERVE, YOU GET WHAT YOU NEGOTIATE.
THE FOLLOWING POINTS SUMMARIZE CRITICAL ASPECTS OF SUCCESSFUL NEGOTIATIONS:
A well-established concept, but this does not in any way mean that the outcome must be fair, logical or that both parties must receive equal “Wins”. Successful negotiation is about trying to reach the best possible agreement for yourself or your company, and is acceptable to the other party.
INFORMATION IS POWER
Do your homework. Try to gather as much information as you can about the other party’s circumstances. Ask as many questions as you can. Gaining information improves your negotiating position. It is also critical to know which information can be shared with the other party and which information is best kept to yourself in order to not weaken your position.
PREPARE YOUR SHOPPING LIST
These are all the items that you wish to accomplish in the negotiation. It should be a complete list, recorded in order of priority. You should also be able to predict the other party’s shopping list.
BE SURE TO MAKE THE FIRST PROPOSAL
Although this might seem uncomfortable, making the first proposal puts you in charge and allows you to manage the other party’s expectations. The points you propose act as references or “anchors” that both parties will use throughout the negotiation. Good negotiators expect their first proposal to be rejected. This is their way of making sure that they have not been under-ambitious.
PLAN YOUR PROPOSAL
Planning is 90% of successful negotiation. Ideally, each item on your shopping list must have three benchmarks
1. The Optimum Point: this is also your starting point, as it represents the level at which you would be delighted to reach an agreement. Aim high but be realistic.
2. The Desirable Point: This is the realistic value of what you expect to achieve.
3. The Essential Point: This is what you must achieve. It is also called the “Walk Away” point, or the “Deal Breaker”, as you cannot accept any agreement below this point. A word of caution, not all the items on your shopping list will include all the points, due to their potential to be show-stoppers. Plan these points very carefully.
The ‘Best Alternative To a Negotiated Agreement’, or BATNA, is the alternative option a negotiator holds should the current negotiation fail and not reach an agreement. The quality of a BATNA has the potential to improve a party’s negotiation outcome. Understanding one’s BATNA can empower an individual and allow him or her to set higher goals when moving forward. One of the best strategies while going into a negotiation is to ensure that you have a strong BATNA, and if not, prepare yourself with the tools that can help you make the other side’s BATNA weak. The best strategy is to ask a lot of questions in order to develop a strong estimate about the other side’s BATNA, so that you will have a better grasp of your own posi-tion during the negotiation.
THE THREE LEVELS OF NEGOTIATION
HOLD: don’t alter you position… the negotiation fails. COMPROMISE: Give up part of what you wish to achieve to close the gap with the other party… you improve your chances of reaching an agreement, but the cost is invariably too high.
TRADE: Introduce other variables to help you gain a concession. An excellent way of unlocking value to both sides of the negotiation.
Tradeable variables are all the items or concessions that you are empowered to use to reach an agreement. Ideally they should be of low cost to you while representing a high value to the other party. Trading is executed through the use of “If you…, then I…” format. Remember, never give away anything without asking for something in return.
All tradeables have to be planned prior to the negotiation. You will need to establish an Optimum, Desirable and Essential point for each of them, in the same way as you did for the items on your shopping list.
When you finally reach an agreement, it is essential to agree on what you have already agreed. This is accomplished by summarizing, confirming, and making sure the other party confirms back. Always follow up on the agreements to ensure the other party is complying with what has been arranged.
A final word of advice to any up-and-coming corporate executive; planning to attend a professional negotiation workshop with a reputable training organization, should be one of your top priorities. The knowledge gained in such a session will have long-lasting and positive impacts both on your corporate career, and on most — if not all — areas of your life.
1-Chester Karrass, bestselling author of “The Negotiating Game”.
2-Journal of Personality and Social Psychology, 83 (5) (2002), pp.1131–1140.
ABOUT THE AUTHOR
Tamer Issa has been a Senior Associate Consultant with Kantar Retail in the Middle East since 2003. He specializes in Sales Training FMCG Sales Forces. Prior to that, Tamer spent 22 years with multi-national FMCG organizations as a Sales and Marketing Executive. These organizations included: Colgate-Palmolive, Johnson Wax and Gillette.