Eight tips for a better outcome.
—by Barry Scholl
Negotiation is a bargaining process between two or more parties with the goal of reaching a common understanding. It’s something all of us do every day with loved ones, co-workers, and friends. Yet even in a friendly negotiation, each party wants to minimize risks and protect his or her interests. This month, we’ll focus on arriving at an outcome that is mutually acceptable to all of the parties involved. Although focused on business negotiations, the strategies below work equally well in personal negotiations.
Know what you’re trying to achieve. As obvious as this might seem, during the heat of negotiation, this concept is sometimes forgotten. Particularly if a negotiation drags on or becomes emotional, you may be tempted to carve out a psychological edge over the other side by issuing what author Robert Mnookin in Beyond Winning terms “threats and warnings.” Instead of succumbing to that temptation, try writing down your bottom line objective and keeping it nearby, referring to it periodically as a reminder that the outcome is more important than the process—no matter how painful or protracted the process might become.
Know what you’re willing to concede. Certain key points are likely to be essential for you, while others are likely to be less important. Focus on the most important details (for example, expenses, division of responsibilities, deadlines) and try to remain flexible on the less significant items. Doing so might even encourage the other party to make concessions in return.
Arm yourself with facts. In a retail transaction, for example, know the MSRP and the street price for an item you’re seeking to buy or sell. If an item is used, familiarize yourself with the regional and seasonal fluctuations in price, consumer demand, and the effect any optional features might have on price. For example, selling a snow blower for top dollar after a January blizzard is likely to be much easier than trying to sell the same item for big bucks during the superheated days of July.
Prepare. There’s no substitute for preparation. Anticipate the other side’s likely arguments and practice your responses. Even if it makes you feel self-conscious, rehearse your arguments aloud. By doing so, you’re likely to feel much more relaxed and authoritative during the actual negotiation.
Be an active listener. Ask questions and listen carefully to the other party’s replies. This will help you to better understand his or her position and might enable you to reach common ground more quickly, with less chance of misunderstanding or jumping to conclusions. Try restating the other party’s position to be sure you really understand his or her position.
Seek a win-win. If you’re selling an item or service, disclose any problems with condition or other issues up front. Not only will you feel better if you come clean, but it will also encourage the other party to do the same. At the same time, feel free to ask questions; just because you are playing fair by engaging in full disclosure doesn’t necessarily mean the other side will feel obligated to do the same. They may not reveal everything they know unless you ask. So ask.
Understand your alternatives. In their book Smart Choices, Hammond, Keeney and Raiffa devote an entire chapter to the subject of understanding your alternatives and point out that “you can never choose an alternative you haven’t considered.” So consider all possible alternatives before arriving at a decision, no matter how unlikely they might seem at the outset.
Be prepared to walk away. We’ve all been part of a negotiation that goes awry, sometimes through no fault of our own. Recognize that in spite of your best efforts, some negotiations are doomed to failure. In those instances, it’s best to get up from the bargaining table. Maybe the other party will reconsider his or her position and seek to resume negotiations after a suitable cooling down period. And if not, there’s almost always another deal out there waiting for you. .
Barry Scholl is an attorney in Salt Lake City and a former CATALYST associate editor,. He co-founded Entrada Institute, a nonprofit supporting artists, writers and scholars whose work focus on the Colorado Plateau.