Let me start off by saying that Negotiation should never be treated as a skill but in fact more as a behaviour we need to cultivate amongst the various other professional behaviours we are constantly grooming and improving upon (think punctuality, respectfulness, professional courtesy, etc).
The moment you interpret Negotiation to be a skill, then you are already lost in the pursuit of ‘Win/Lose.’ After all we all develop skills in the hope of being better than someone else -right?
So how do we negotiate from a position of equal opportunity for both parties involved?
Let’s explore the concept of Win/Win or walk away with no deal.’
This position proposes that a negotiation is nothing more than an opportunity for two individual parties to come to the table because one party needs something the other party is willing to bargain with. Both parties are open to the idea of arriving at a conclusion that is mutually satisfying to each other – and this is key! Dr. Stephen Covey has a great section in his seminal book “Seven Habits of Highly Effective people” on this approach.
If a mutually satisfying deal is not forthcoming – both parties should be willing to shake hands and walk away
The objective in this sort of negotiation approach is that both parties are aware of why they may be able to do business with each other, and there is already a relationship, mutual trust and an understanding of the basic needs and wants of either party.
The negotiation will explore areas of common ground that both parties feel comfortable with, as well as some areas that are less understood, where significant dialogue and discussion may be required, before any conclusion can be sought.
Good negotiators are familiar with the various other factors that are in play during the course of the negotiation, and do not invest all of their effort in trying to ‘win’ the main and obvious objective of the negotiation (the main item up for negotiation).
Good negotiators are aware that there are subtle ‘other wins and losses that are all a part of the main negotiation, and never lose sight of that fact. For a salesman in a negotiation, these could be getting to know the various key individuals in the buying organization, knowing who is the Financial buyer, who is the technical buyer, who is the end user of the product or service being discussed, who is the individual who has veto power and can shut down the entire deal (like a CFO or CIO, CEO, etc?). The good negotiators would want to meet these individuals prior to the negotiation to ensure that there are no surprises later in the negotiation cycle.
Good salesmen getting into a negotiation make a it a point of duty to also know the personal ‘wins and losses’ of each of the individual’s listed above.
What do we mean by personal wins and losses?
These are the personal motivations or demotivation’s of the key individuals – a technical buyer could want to be seen as a highly technical person looking out for cutting edge technology. A Financial buyer could be motivated to win the lowest cost deal possible? Sometimes a financial buyer could want to feel powerful as in having veto power?
A User buyer could be someone who wants to be seen as an expert in the user community who knows what the tool or hardware or solution is going to do for the business overall.
The great thing about this approach is that it allows for both parties to genuinely explore a business result that benefits both Organizations. After all, if you were inviting bids for a Surgeon to perform life saving heart surgery on yourself or significant other, would you want to only consider the lowest available offer and then try to beat that offer down a few more percent, just to win a good deal? Or would you want a Win/Win or no deal?
Negotiation is a routine reality that becomes necessary in the conduct of our day to day business engagements.
At a personal level, negotiation is the ever present process that we utilize in agreeing on basic decisions and choices, each of which may require differing levels of flexibility and accommodation. Who drops the kids to school, is there a meal to be prepared/ordered in, who does the groceries, are there any repairs around the house that need supervision, etc? Each of these seemingly innocuous tasks trigger some give and take, some debate and dialogue, some agreements where the negotiation process is applied.
However – these personal engagements are typically non-threatening and therefore seldom trigger any combative stances by any of the parties involved – there is little or no pressure to win.
When we apply the negotiation process to a business engagement, we have a totally different scenario that must be considered as two distinct and separate phases of planning:
1. The strategic planning
1. The Tactical planning
What do we mean?
1. Strategic planning is the pre-work that goes into planning for the negotiation process, before we are in the tactical, face-to-face position in front of our client.
Strategic planning includes researching about our client, their Corporate policy, buying process, Market position, recent organizational history, key personnel changes in the Executive team, recent news articles on the Organization, changes, major initiatives announced, mergers and acquisitions, etc.
Strategic planning includes how do we position our team with our client team – do we have good relationships developed, are there any unknown client team members in positions of power that we are not interfacing with yet – how can we get on their calendar and close the loop? These are red flags that all strategic planning should call out.
Do we have any recent wins or success stories that we can present that may assist the client in evaluating our capability? Do we have strong Industry references we can utilize as a part of our negotiation strategy.
Who are the top three competitors in this engagement – what do we know about them?
Are there any significant advantages or disadvantages we can list in our own position versus our competitors (Tech. specs, Tender specs, special , unique requirements we may be aware of).
What is our negotiation range – what are we wiling to negotiate in terms of upper and lower acceptable limits.
Do we have a strong value proposition?
1. Tactical planning is the activity that goes into the face to face negotiation event. These negotiations could be a simple, brief meeting or a day long session, or for large complex deals that require end to end solution discussions – months of negotiation.
What is the negotiation venue, is it client location, our offices, or a neutral commercial location? Consider any special equipment or facilities both parties may require. For longer sessions catering for food and refreshments may become a necessity.
Are all the right team members available and included in the session. Do we have a good mapping of our team with our client’s team. Do we have the relevant subject matter experts present (Legal, Contracts & Negotiations, H/W, S/W Tech experts, HR, Finance, etc).
Do we have appropriate Sr. Executive approvals to close the deal if the opportunity and the acceptable criteria becomes available to us.
Those are some of the considerations that we need to include in our strategic and tactical planning for any negotiation process.
Best of luck with your negotiations!