NEGOTIATION – A WIN-WIN APPROACH

1.?????? OVERVIEW

“Like it or not, you are a negotiator … Everyone negotiates something every day,” wrote Roger Fisher, William Ury, and Bruce Patton in their seminal book on negotiating, Getting to Yes: Negotiating Agreement Without Giving In.

You negotiate in your personal life, either when you bargain the price of your favorite BMW X5 with a seller in BMW World in Munich, or when you try, daily, to persuade your toddler to taste broccoli and other “healthy” meals.

You negotiate in your professional life, either while you discuss the terms of your dream job offer with a recruiter, or when you face the challenge of closing a huge commercial deal with the most important client of your company?

Negotiation is a complex communicational operation, where the debaters deploy their argumentation and communication skills to achieve the best results in their endeavors.

Personally speaking, negotiation could be also an alluring and mind-provoking game. A game that could be seen by two perspectives:

One the one hand, you could perceive it as a competitive game, e.g. chess. Resembling chess players, both sides involved, deploy their pawns upon the chessboard.? Each of them applies superior tactics and maneuvers, either to avoid, or to achieve “checkmate”.? One’s “life” is other’s “death”. In academic and commercial terms this type of negotiation is called zero-sum or distributive negotiation, where parties compete over the distribution of a fixed pool of value. Here, any gain by one party represents a loss to the other.

One the other hand it could be like a cooperative pc game like Warhammer, where all players deploy their beloved heroes and through constant interaction and cooperation must survive many challenges, until achieving the main communal goal of the game. This is defined as a win-win negotiation, where all involved sides try to create value. In other words, it involves working to get the best deal possible for yourself while also working to ensure that your counterpart is satisfied. It means making offers that are good for them and great for you. And it means thinking creatively about how you can get more of what you want by helping the other side get what she wants.

You decide after all what kind of gamer you are. The article below constitutes the distillate of more than 25 years personal in-depth experience in win-win negotiations. A long professional journey, during which strong and mutual partnerships were built, immense hardships were overcome, huge contrasts were bridged, great benefits were mutually earned, and significant commercial goals were achieved.

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2.?????? DEFINING GOALS

First and foremost, clarify within your mind what your situation is, what problems you are facing, what you want to achieve and define your negotiation purposes loud and clear in your head. Portray them in detail and write them down.?

If your goals are related to measurable issues, translate them into numbers. In this case you must define the following waypoints.

·?????? Target point (what you want to achieve)

·?????? Starting point (where you start to negotiate)

·?????? Point of resistance (what you can tolerate)

All your waypoints should be carefully measured, within reasoning and reality, after a careful examination of all parameters involved (e.g. price trends, competition analysis, local and international market conditions, current social and financial situation, etc.) followed by specific argumentation, focusing always on a win-win situation. However, when the conditions permit it, do not hesitate to ask both for the sky and the stars. You will get either the sky, or the stars after all. Not to mention the possibilities to get both. Bear always in mind what Dr. Cheste L. Karrass mentioned in his writing In Business as in Life - Kindle Edition: “You don't get what you deserve, you get what you negotiate”.?

Below you will find some examples regarding this stage of negotiations:?

E.g. 1 You want to introduce a new product line to your clients, which is already well known in the market. You want to approach the leading selling company in the market regarding this product and to begin a long-term and fruitful cooperation.?

E.g.2 You receive extreme pressure from your clients regarding the price of your number one selling product. Your competitors in the market have penetrated your market, by selling much cheaper.? You carry out market research to find out that your competitors’ selling price per unit is 2,00€, while you are selling at 2,20€.

You are dealing with a big dilemma: If you keep selling at 2,20€ your turnover is at stake. If you adjust your price at 2,00€ or lower, your profitability is at stake. Your current gross margin per unit is 0,30€. You are willing to adjust your price at 1,95€, to keep up with your competition. However, you want to preserve a gross margin of 0,25€ -0,30€ per unit. You want to contact your strategic supplier and re-bargain your purchasing price at 1,70€ (target point). Your initial proposal will be at 1,65€ (starting point) and you will tolerate maximum a price of 1,75€ (point of resistance).?

E.g. 3 You receive an e-mail from a CEO in a “newborn” company, who is looking for a commercial representative and distributor for his company’s distinctive and original products. As your company is the biggest and most reliable distribution network in your area of business activities on the one hand and you realize that he is desperately in need of a trustworthy partner on the other, you set up a face-to-face meeting with him, to request area exclusivity, best price and payments terms, extra budget for promotion purposes, bonus for your sales team and the fairest return goods policy. In return you can guarantee him a 100% successful initial distribution and sales result.

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3.?????? PREPARATIONS

Before you enter the negotiations’ “game room”, be prepared. Your preparations should include the following:

?‘Have read’ your ‘potential partner’ in detail.

·?????? In case you must deal with people from other countries with different civilizational characteristics, be previously informed about their custom behaviors according to their cultural ethics and act accordingly. E.g. if you address to a Japanese Sales Manager, you might have to bow during first contact, or suffix that person’s surname or his/her company’s name with the term “san”.

·?????? Check the financial and market status of the “other side”. Market position, market share, annual turnover, gross margin, net profit, fame, and other vital financial rates should be noted. You should realize whom do you really have on the other side of the table.

·?????? Be aware of the domestic and international markets, as well as the financial and social conditions. Market trends, average prices, competition analysis are some of the most important and strongest tools you could deploy in the discussion.

·?????? Have also ready any statistical data regarding the issue you want to negotiate.

All the above collected information is your “heavy weapon” in your knowledge arsenal. And “knowledge is power”.

?Have at least one BATNA at hand.?

Have studied alternative plans and options to follow in case of “malfunctions” to your initial “targeting operation” in the negotiation process.? Analyze and cultivate your BATNA (Best Alternative to a Negotiated Agreement). In both integrative negotiation and adversarial bargaining, your best source of power is your ability and willingness to walk away and take another deal. Before arriving at the bargaining table, wise negotiators spend significant time identifying their best alternative to a negotiated agreement, or BATNA, and taking steps to improve it.

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4.?????? PRELIMINARIES

The first impression of a welcoming company during the first introduction steps plays a significant role in a successful negotiation outcome.??

If you are the host of the negotiation meeting within your company’s premises, set a warm-welcome environment, to trigger a pleasant mood and subsequently to achieve a smoother transition to the main discussions. Welcome your guests with a cordial headshake or any other gesture, according to their cultural customs, lead them to the meeting room by keeping a discreet distance behind them, showing them the way. Ask them to choose their seats and to sit comfortably. The sit first and you follow. Offer them a drink or a snack. Make them feel secure and important.?

If you are the guest, greet them kindly and let them show you the way to the meeting room, by following them.?

In every case, being extremely kind will surely provide you with extra bonus points and significantly boost your success possibilities.?

Establish human connection. Although it’s not always feasible to engage in a short talk at the start of a negotiation (particularly if you’re on a tight deadline), a brief preliminary introduction could bring real benefits. You and your counterpart may be more collaborative and likely to reach an agreement if you spend even just a few minutes trying to get to know each other. If you’re negotiating over email, even a brief introductory phone call may make a difference. This is one of the most valuable negotiation skills to master.

Proceed with a solid presentation and introduction of your company, emphasizing in the ‘robust points’, like the recognition and reputation, the sustainable policies, the market position and share, the annual turnover, the profitability rates, the distribution capacity, the number of clients. Leave no doubts to your partners that you are the best they could have!

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5.?????? DURING NEGOTIATIONS

“Let the games begin”! Time of truth has come. As an excellent negotiator you are, you have many personal traits and tactics you could deploy in the negotiation process. From personal experience, I would suggest you to:?

Be restrained! You will get the best negotiation result, when you indicate minimal interest for the negotiable items. E.g. they will lay pure gold upon the table. You find it alluring. You really want to possess it. You are dying for it. ?However, what you see is beach sand. Neutralize your feelings. Hide your desires, your admiration. Even the slightest dilation of your pupil, caused by excitement, becomes perceptible by the “others” and you begin with a disadvantage.?

However, you should react and say something. Bear in mind that you should never insult your co-speaker in any case. Silence or no reaction at all, could be considered as full indifference and at the current point this could be measured as a fatal mistake. Try to express yourself in a condescending way. E.g. “…we see a fine product…” , or “…we realize an evolution in your product line…”.?

Hide your glee too for another important reason. Recent research indicates that negotiators tend to be more interested in working with those who seem less satisfied and interested. Any profound satisfaction may lead your counterpart to assume that you took advantage of him. So, if you have success in meeting your high goals, keep your exuberance to a minimum.?

Be self-confident! You know, you can negotiate with anyone on the ‘other side’. Either with a simple salesman, or with the CEO himself/herself. Don’t let yourself engage in stressful thoughts and actions caused by the status, personality, position in the company of your interlocutor, in case of high-level negotiations. Trace carefully and measure your “potential partners”, keep calm, show respect to gain respect and proceed steadily with the “show”. Negotiation is only limited to God himself. You cannot negotiate with Him for sure.

Be respectful! Always respect your “potential associate” as an individual and within the hierarchy of his/her organization. Never underestimate anyone, regardless of his/her position in the company. Showing the appropriate respect reflects on you. ?In your path to success, never try to reach the higher levels of authorities directly. Even if you have managed already to establish excellent professional or personal relationships with the upper layers. ?One step at a time. You might have to start playing the game with low-level executives. In case you reach a dead-end with them, then ask their permission to address their superiors. And proceed as such with everyone in your way. You do so, you have earned their trust and respect.?

Be empathetic! High level of empathy should consider an asset in your personality. You have human beings on the other side of the table, who have feelings above all. E.g. a simple salesman carries the stress of achieving his sales’ goals, a CEO carries the burden of his company own survival and someone else might face serious personal, or professional issues during the negotiation process. Try to compensate them and to behave as if you are their psychologist, by showing them great understanding, and helping them to overcome their anxieties. Showing real interest helps you build mutual trust as a strong foundation of a successful outcome in the negotiation procedure.?

Be an excellent listener! ?Listening is vital to the further process. Listen carefully with your brain and not with your ears. “Lock” an eye-to-eye contact with your participant and pay full attention to his/her words, without interrupting rudely. However, use smart tactics to intervene during his/her flow of speech, by asking questions, providing feedback, or paraphrasing. This is called “active listening”. Active listening is invaluable in ensuring successful negotiations. In fact, it is just as important—if not more so—than talking, as successful negotiations are based on a give-and-take of information. By listening actively, you will achieve two things. Firstly, you will gain more of his/her respect, since he/she realizes that you pay full attention as he/she will feel momentarily special. Secondly you will fully comprehend his/her point of view and arguments, avoiding the risk of misunderstandings during the discussion flow. And keep written notes, in case more interesting issues and opinions come up on the surface, apart from the main negotiation script.?

Be patient! Patience is an important virtue and is also combined with an excellent listening ability, as mentioned in the previous paragraph and could be formed in two shapes:

·?????? Wait patiently for your potential partners, to finish their argumentation, presentation, commentaries, loud thoughts. In this way you get the full picture of the others’ point of view, identify better their strengths and weaknesses and prepare to launch key queries as well as to provide critical answers to the “hardest” questions.

·?????? Delay acceptance. Your counterpart’s quick acceptance of your offer might cause you to regret not asking for more. Even if the other side quickly acquiesces to your high goals, try to prolong the negotiation a bit to improve your overall satisfaction.

?“Patience is bitter, but its fruit is sweet” declared the famous ancient Greek philosopher Aristotle.?

Be calm and comfortable! During the debate keep a low and steady voice, no face expressions. You have the right only to release a smooth smile upon your lips in all cases. That means you smile either when you hear something pleasant or unpleasant. Always smile and make others feel anxiety. Suit yourself in such a comfortable position, to reveal your confidence. Avoid extreme comfortable positions such as laying your legs or stretching your hands behind your neck. These positions might be insulting to others, and they will jeopardize the outcome for you. “All things in moderation”.

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6.?????? TO SUM-UP

A long-term experience in professional negotiation “games” has proven that a kind and respectful negotiating tactic based upon mutual trust and win-win approach, would have the most beneficial results for all involved parts, especially for the one, who fully implements it, considering the other side not as “lethal enemy”, but as “potential partner”. Sometimes you will surprisingly find out that only two “magic” phrases “please” and “thank you” are good enough to open the “heaviest doors” and lay the “widest streets” to successful negotiations after all.?

P.S. Many thanks to the Harvard Law School for providing more than sufficient bibliography and extended database regarding negotiations that was used by the author for the creation of the current article.