Negotiation is the process of discussing and compromising in order to reach an agreement. It is a common occurrence in everyday life, from purchasing a car to negotiating a salary increase.
In any situation, good negotiation skills can help you get what you want. But, before you can effectively negotiate, you must first do your homework. This entails careful planning and understanding your own and the other party’s interests.
Check out this story shared by our partner Jeff Cochran, in an excerpt from the book The Power of Nice:
After college, I joined the Peace Corps and was assigned to work in Nepal. As you might imagine, traveling in this tiny Himalayan country could be extremely arduous at times. The village I worked in was 200 miles away and was 19 hours by bus to the capital city Katmandu on a good travel day.
However, there was a tiny airport near my village that had flights to Katmandu, once per week. This airport was not the kind most people are accustomed to. The runway was a dirt strip in the middle of a field, where goats had to be moved out of the way whenever a plane had to take off or land.
Needless to say, my first flight from there was memorable. The plane was a tiny four-passenger puddle jumper, the kind amateur pilots use to learn how to fly. I walked out across the dirt runway/ goat path to the plane, the pilot took my bag and put it in the little hold beneath the fuselage, and I climbed up all three steps to get on and into my appropriately tiny seat.
As I buckled my seatbelt, I saw the pilot reach beneath his seat and take out a clipboard. He started reading whatever was on the paper and I started to panic. If he doesn’t have a whole lot of experience and is just now reading up on how fly the plane, we’re in big trouble. I leaned over and tapped him on the shoulder.
Me: “Hey, how you doin’”?
Pilot: “Good, sir, how are you doing?”
Me: I’m fine. What’s up with the extra reading material?
Pilot: “Ah, it’s just my checklist.’
Me: “How long have you been flying?”
Pilot: “Over 20 years.”
Me: “And you still need the checklist?”
Pilot: “Yes, it has key items about the plane that as pilots we shouldn’t overlook.”
Me: “And you still need that after 20 years?”
The pilot turned the clipboard toward me and pointed down the list, ‘Would you want me to overlook anything on here?”
Me: “Nope. For my money you go ahead and check: Check away!”
Jeff’s story always reminds me of how simple but essential checklists can be, no matter how experienced or knowledgeable a negotiator.
Negotiation planning is a critical component of any successful negotiation. You can increase your chances of getting what you want in any negotiation by following these tips.
Precedents are past events or decisions that can be used as guidelines in future negotiations. When starting a preparation for negotiation, they can help to establish norms, set expectations, and build credibility. It is critical to be aware of the precedents set in previous negotiations when negotiating. This information can be found online, in trade publications, or by speaking with experts in the field. Prepare to explain how your terms conform to precedent. Be adaptable because precedents are not always applicable to the current situation.
Alternatives are options you have if you don’t reach your primary goal in a negotiation. They are “Plan Bs” or “backup plans.” Having options gives you negotiation power. You may regret concessions if you only focus on your main goal. If you don’t get what you want, you can leave the negotiation if you have alternatives. This will demonstrate your seriousness and willingness to walk away.
Consider BATNA when creating alternatives (Best Alternative to a Negotiated Agreement). If you left the negotiation, this is the best result. Consider the other side’s BATNA. If the other party left the negotiation, this would be their best outcome. Consider these factors to create feasible alternatives.
Be ready to leave the negotiation if necessary. Though difficult, remember that you can always leave. If you’re not getting what you want and won’t compromise, it may be time to leave. Leaving a negotiation is powerful. It demonstrates your seriousness and willingness to walk away. If the other party knows you’re willing to leave, they may be more willing to negotiate.
Interests are the underlying reasons why people take the positions they do in a negotiation. Negotiations are driven by these hidden factors. When you are preparing for negotiation, understanding the other party’s interests helps you find solutions that satisfy both parties.
Identifying interests requires some considerations. Interests are not positions. Positions are what people want, while interests are why. “I want a 10% raise” may be your negotiating position. “I want fair compensation for my experience and skills” may be your interest.
Second, interests are often varied and tangible or intangible. Money, time, and resources are tangible. Recognition, respect, and security are intangible.
Third, shared or conflicting interests. Both parties want shared interests. One party wants what the other does not.
Understanding the other party’s interests helps you find solutions that satisfy both parties. If you’re negotiating a raise with your boss, they may want to keep the company from overpaying. Understanding this allows you to find a win-win solution like a signing bonus or promotion.
Deadlines can also be useful in negotiation planning. If a deadline for reaching an agreement is set, the parties may feel pressured to make concessions. If there is no deadline, however, the parties may be more willing to wait for a better deal.
Strengths and Weaknesses
In negotiation planning, understanding your own strengths and weaknesses allows you to devise a negotiating strategy that capitalizes on your advantages while minimizing your disadvantages.
You must develop a negotiating strategy after considering all of the factors involved in the negotiation. Your strategy should be based on your goals, the goals of the other party, precedents, alternatives, the parties’ interests, deadlines, your strengths and weaknesses, and any other factors relevant to the negotiation.
It can also be beneficial to create negotiation scripts. Scripts are rough drafts of what you intend to say and do during the negotiation. They can assist you in staying on track and avoiding rash decisions.
Here is another example by our founder Ron Shapiro, in a passage from the book The Power of Nice:
There was one such negotiation that I will never forget. We did our research and gathered every bit of information we could. All of that data was used to develop a strategy, compose scripts for each call, and establish a Highest Goal and Walkaway for this deal. The player’s agent came in with what we thought was a ridiculously high offer, but, thanks to our preparation, not one that was unexpected. His “ask” was substantially beyond our Walkaway, so we had no realistic room to adjust. We didn’t break off the negotiation abruptly. We “did the dance” for a while, talking and exploring, giving the other side the opportunity to adjust, reconsider, recalibrate, or compromise. In contrast to many people, we created a Walkaway we believed in and didn’t submit to negotiating pressure, and therefore stood our ground with confidence.
Of course, the agent was not happy. He did eventually find the player a home with another team, for a deal that was much higher than the largest deal we had thought was reasonable. It would seem the agent got his Highest Goal. But the player did not live up to, or even come close to, the value of the contract. We were content with our decision before that outcome, and that outcome validated our preparation and Walkaway.
Negotiation planning is an important part of any successful negotiation. You can improve your chances of getting what you want in any negotiation by following the advice in this blog post.
To summarize, the following are the key steps to successful negotiation preparation:
- Set specific objectives. What do you want to get from the negotiation?
- Research the other party. What are their interests and objectives?
- Create a BATNA (Best Alternative to a Negotiated Agreement). What are your options if you and the other party are unable to reach an agreement?
- Prepare your negotiating strategy. How are you going to approach the negotiation?
- Improve your negotiating skills. To become acquainted with the negotiation process, role-play with a friend or colleague.
Negotiation preparation is a critical component of any successful negotiation. You can improve your chances of getting what you want in any negotiation by following the advice in this blog post.
If you want to learn more about negotiation planning, I recommend you go to the Shapiro Negotiations Institute website. We provide a variety of resources and training programs to assist you in improving your negotiation skills.