Negotiations can be defined as the process in which you and another party with different needs, wants, desires, and goals discuss an issue or outcome to find a mutually acceptable result. As a business owner, you must realize negotiations are essential in both a formal and informal manner.
Negotiations are extremely valuable, and mastering the art of negotiation is imperative for anyone in business. Good negotiations can significantly increase your success as negotiating effectively builds long-lasting relationships and delivers lasting solutions instead of a stopgap. Negotiating with the proper tools in place will also help you predict and prevent future conflicts.
You have probably noticed and experienced that not everyone is a natural-born negotiator, but that doesn’t mean you can’t learn the tools of the trade. With a bit of practice and a thorough step-by-step plan, anyone can learn to negotiate in business like a boss!
What is Negotiating, Types of Negotiations & How Often Does It Come Up?
Negotiations are an art – an art by which two sides with seemingly different objectives and goals meet to find a compromise that satisfies both parties, allowing them to move forward in unison. When we think of negotiation, we may think they only come up in the formal context of leases, service deliveries, legal agreements, conditions of sales, etc., when the reality is that negotiations occur all day, every day, in seemingly mundane tasks. For example, without even knowing it, you are often negotiating with family members in your early morning conversations, who showers first, who makes the coffee, and so forth.
There are a wide variety of types of negotiations. To name a few, there are (1) principled negotiations, (2) team negotiations, (3) multiparty negotiations, and (4) adversarial negotiations.
A principled negotiation focuses on conflict resolution and uses parties’ principles and interests to reach an agreement. This type of negotiation is integrative, looking to serve the interests of both parties. Think of it as a method whereby you are both focusing on your interests absent any emotion with objectivity to reach a mutual gain – the goal is a plan that benefits everyone.
A team negotiation is a form of bargaining whereby both sides have multiple ‘players’ serving various roles. For example, they may have a leader who is the group’s spokesperson, a recorder to keep track of progress and a relater whose task is to form relationships with the counterparty.
A multiparty negotiation is one where there exist more than two groups at the bargaining table. For example – when all your company’s managers or department heads join the meeting to represent their respective group’s interests.
The fourth type of negotiation in which you may find yourself, one which often does not serve the interest of both parties, is adversarial negotiation. Typically, in adversarial negotiations party’s take hard-line stances and bully their way to their desired outcome with little to no concern for their counterparty.
Regardless of the type of negotiation you as a business leader find yourself in – fear not! With a thorough plan, practice, and preparation, you too can negotiate like an expert. Below are five techniques that can assist you in any negotiation.
Five Techniques to Be a Better Negotiator
1. A Positive Mindset
If you’re nervous or worried about a negotiation, there is no better tip than to be positive. Having a positive attitude will not only help you to feel more confident but will also set the tone for a favourable negotiation. If you select an upbeat style, you’re more likely to preserve a beneficial business relationship, gain concessions from a happier opponent, and persuade the acceptance of offers. Your positive mindset can fuel and energize a more positive and productive dialogue.
2. Building Strong Long-Term Relations
When negotiating, remember that one negotiation or agreement is not always the be-all and end-all – there is always a tomorrow. It’s essential to build these relationships through solid communication, a commitment by your side to care about the interests of the other, proof of reliability, and respectfully contributing to a fair and equal outcome.
These long-term relationships are essential for various reasons. Not only do long-term positive relations give a warm feeling of appreciation, but they also foster trust – a key element to any current and future negotiation. This long-term relationship will allow you to be able to negotiate better positions in the future. Picture this – you pitch a slightly risky offer to a long-term colleague. They are more likely to accept the proposition if they have a relationship of trust with you.
3. Creating Value for the End-User
Creating value in negotiations is, in simple terms, the art of manufacturing a win-win situation for all parties. It is the art of not seeing negotiation as a win-lose game but instead creating positive outcomes for both sides, yourself and the end-user or customer. Additionally, you can create value by focusing on common interests as opposed to opposing positions.
For example, in a consumer market, they may want the best deal, and you may want the most profit, but you have a common interest in a good, profitable product. On this basis, you can create value for the end-user by providing them with an unparalleled product that allows you to reach your desired price point.
4. Prepare, Prepare, Prepare
Negotiations are only as good as your delivery and the impression you make. They require significant preparation, whether researching your position, practicing your lines or giving yourself and your team the pep talk to push you over the edge.
Preparation is necessary because it can give you power in a negotiation – it enhances your chance to persuade the other side to agree if you are well prepared to argue your stance. So how can you be prepared? Know your strategy, choose your negotiation style, identify your goals and positions, and compile your options.
Knowing your strategy and practicing allows you to easily articulate what you are negotiating for and why which will make it possible for you to feel confident in your delivery and helping the other side understand your position. Choosing your negotiation style allows you to set the tone of your negotiation depending on the opposing party’s behaviour. For example, perhaps you’re more willing to compromise with a long-time business acquaintance whose relationship is a win-win for both sides. Lastly, you must know your goals and desired outcomes so that you’re prepared to answer what you will and will not do in negotiations confidently.
For obvious reasons, the art of compromise is a valuable tool in negotiation. Compromise reduces the strain and pressures of a negotiation. Suppose you have nothing left to offer in a negotiation or require a decision in short order. In that case, compromise can allow you to reach a satisfactory conclusion for all parties involved. Giving up something you want or that is of value to gain something you want even more is a powerful tool – because it allows the other side to feel they have ‘won’ while also fulfilling your wants or needs.
Don’t ever feel you can’t succeed in negotiations. Trust your instinct and utilize these tips and tricks to improve your skills in negotiating. Have you grown as a negotiator? Connect with us on social media to tell us about your journey!