How to master the art of negotiation

Negotiation is a staple in business and in life –from the mega mergers in the banking, pharmaceutical and advertising industries to monthly budget meetings at work, weekly sales presentations, to everyday encounters at home. A negotiation is an interactive communication process that may take place whenever we want something from someone else or another person wants something from us.

Life is definitely far easier when people have the sense to see things your way. In the real world, however – diplomacy, selling, collective bargaining, annual budgeting, and priority setting all tend to require people from different organizations, or even your own people with different points of view, find satisfactory means to reach an agreement.

No two negotiators and negotiating situations are the same. You must learn to adapt to these differences realistically and intelligently, while maintaining your personal ethics and self-respect. G. Richard Shell, director of The Wharton Executive Negotiation Workshop in his book Bargaining for Advantage leads you to the foundations of effective negotiation. It is a guide to better negotiation practice, not a substitute for it, since the template can be as flexible as the players in the negotiating table and the circumstances you are in.

• Know your bargaining style. Assess the way you communicate when you face a situation containing interpersonal conflict. Your success as an effective negotiator depends on candidly assessing your strengths and weaknesses as a communicator. Know thyself. Take a personal inventory, and ask how you feel about the negotiation. Do you want to get over it fast? If so, you may give in too quickly, or give away too much. Are you a cooperative sort of person, striving to meet everyone’s goals so people leave the negotiation feeling good? Or are you a more competitive type who is less concerned with how the other party feels and more interested in how well you do?

• Do your homework. Determine who you’re negotiating with before you sit at the negotiation table. Know what his reputation is as a negotiator. Does the person want to negotiate with you, does he dread the negotiation, or is he veering towards a neutral situation?

Creativity in your personal bargaining style can also help. Anyone can do things the same old way. Using brainstorming techniques, listening to outlandish proposals and opening up to unanticipated possibilities expand agreement opportunities. If you respond with new ideas and do the unexpected, you can open doors to far greater gains than when you behave predictably. It is not enough to know what you want out of the negotiation. You also need to anticipate what the other party wants, as you try to anticipate what the other party thinks you want.

Active listening contributes to an effective negotiation process. Don’t spend all of your listening time planning how to zing the other party. Focus on what others say, both on their words and their underlying meanings. This will help you understand the interest upon which an agreement can be based. When your response makes it clear that you have really been listening, they too, may be more predisposed to listening. External listening will also allow you to see important nonverbal messages, facial expressions, and other body language manifestations.

The Danish folk saying, "You must bake with the flour you have."

• Set your goals and expectations. Once you set your sights on a concrete, challenging goal, you will become more motivated. The intuitive part of your mind – the part that works and learns "below the surface" while you are getting ordinary things done during the day – will become a powerful ally and problem solver. You will become more focused, persistent, and achievement-oriented, and you will be more likely to come up with good arguments and new ideas about how to get what you want.

Your clarity will communicate confidence and resolve to the other party. You will convey the message that you have high expectations for both yourself and the deal. And perhaps no other personal variable makes such a difference in negotiation as the quiet feeling of confidence, self-esteem, and commitment that emanates from people who know what they want and why they ought to get it.

Sam Walton, founder of Wal-Mart, expresses, "I believe in always having goals, and always setting them high."

• Set authoritative standards and norms. Arguments about standards, norms, positioning themes, and authority are the bread and butter of negotiation. It is all about truth, fairness and consistency.

Fairness counts. If people feel that the negotiation process is fair, they are more likely to make real commitments and less likely to walk away planning ways to wriggle out of the agreement. Sometimes things are helped when a neutral, external authority is used to measure fairness like a lab test, or an academic article.

• Be prepared to commit. You should not make a commitment unless you can fulfill it. Your commitment is not worth much unless the parties to the negotiations are Drop-Dead Decision-Makers. Moreover, a commitment is not likely to result unless all parties feel the process has been fair.

Samuel Taylor Coleridge avers, "The first duty of a wise advocate is to convince his opponents that he understands their arguments."

• Gain access and credibility through relationship networks. Most of your relationships are with repeaters, like people you run across time after time such as your boss and officemates. The same is true for borrowers, directors and representatives of affiliated institutions. If you understand the relative priority of the relationship, it can be easier to know when giving in on a particular point may yield short term costs but long term gains.

Build trust as well. Negotiation is a highly sophisticated form of communications. Without trust, there won’t be effective communication. Instead you will have manipulation and suspicion masquerading as communications. Be trustworthy. Honor your commitments. Tell the truth. Respect confidences.

Franklin D. Roosevelt says, "If you treat people right, they will treat you right – at least 90 percent of the time."

• Determine the other party’s interest. Finding out what the other party is worried about sounds simple, but your basic attitudes about negotiation make this surprisingly difficult to do. Don’t assume that the other party’s needs conflict with your own. Do not restrict your field of vision to the issues that they themselves are troubled by, forgetting that the other side often has its own problems based on its own worldview.

Be conscious of the difference between positions and interests. If you can figure out why you want something, and why others want their outcome, then you are looking at interests. Interests are the building blocks of lasting agreements.

The classic story to illustrate this describes two sisters fighting over the only orange in the family larder. Each sister must have the entire orange for herself.

Any less is impossible. A wise parent privately asks each of the girls why she wants the orange. One explains she wants to drink the juice, the other wants to use the rind to cook a pudding. What each sister want is her position, why she wants it is her interest. In this case, the simple solution is to give the cook the rind after the juice has been squeezed for the thirsty sister – thus meeting the interests of both.

The lesson here is simple. Find the shared interests that will motivate negotiators on the other side to agree with your proposal and explore why they might say "no."

Henry Ford writes, "If there is any one secret of success, it lies in the ability to get the other person’s point of view and see things from that person’s angle as well as from your own."

Obtain an agreement on your own terms. Harness your power of leverage, a critical variable in negotiation. You can improve your leverage using many different moves, including finding good alternatives to achieve your goals away from the table, gaining control over assets the other side needs, forming coalitions, arranging the situation so the other party will lose face if there is no deal, and showing the other negotiator you have the power to make him worse off materially.

Know your Best Alternative To a Negotiated Agreement or BATNA. The acronym comes out of the research on negotiation conducted by the Harvard Negotiation program. It suggests that before you begin a negotiation, know what your options are. Can you walk away from the deal? What other choices do you have? What are the pros and cons of the different choices? But don’t stop here. You must also consider the other party’s BATNA, and work around it. The relative strength of each party’s BATNA will determine the balance of power each one can exercise.

American gangster Al Capone remarks, "You can get much further with a kind word and a gun than you can with a kind word alone."

Effective negotiation in Shell’s judgment is 10 percent technique and 90 percent attitude. And to acquire the right attitude, you need realism, intelligence and self-respect.

* * *

E-mail: bongo@vasia.com for comments/questions.