Implementation is crucial, and every deal must deliver as promised. Your organization cannot risk negotiating deals that collapse under implementation due to how they were structured or negotiated.
Some forward-thinking organizations have come to recognize that metrics which reward negotiators for how quickly and how many concessions they secure often lead to deals which fail to deliver as promised.
1. Focus on the Issues
Negotiators must remain 100% focused on their counterpart, their emotions and interests to create an environment conducive to open communication. Furthermore, they should let go of any preconceptions or assumptions which might prevent a deal being struck.
People tend to seek information that supports their existing beliefs while disregarding or discounting information that challenges them. When it comes to negotiations, individuals can employ tactics like bogey, auction and power plays in order to gain advantage by creating competitive situations or suggesting that something with little value should have greater significance.
Negotiators can get trapped by having an “close it at any cost” attitude or engaging in tactical exchanges that fail to address all issues. Companies struggling during an economic downturn cannot afford deals that tie up capital, employees, and management attention without providing real benefit; companies should focus on properly preparing negotiations as the start of implementation and passing off responsibility smoothly to those responsible for implementing it; this includes identifying all stakeholders, designing appropriate risk management plans, and formulating effective handoff strategies.
2. Keep It Simple
Negotiation often conjures images of two people sitting across from each other to negotiate a business deal, yet negotiation can be applied to many situations beyond just conversations between two individuals. Negotiation skills can help negotiate better salaries for employees or vendors and even help increase valuation during fundraising rounds or exit strategies.
An easy way to keep negotiations straightforward and uncomplicated is recognizing both your priorities and those of the other side. An effective negotiation should not solely aim at winning; instead, its purpose must be about building long-term sustainability for both parties involved.
Individuals should clearly communicate what they desire from negotiations and rank their needs on a scale of need-to-have to nice-to-have. That way, if negotiations fail to deliver everything on their list, they have an acceptable fallback position that they can offer the other party as proof that you are committed to getting a deal done and might encourage them to offer additional solutions that meet those needs.
3. Don’t Overcomplicate Things
“Shark Tank,” the reality show, relies heavily on creating an uncomfortable environment to create excitement and drama for viewers while placing undue strain on entrepreneurs who must pitch their ideas to wealthy investors (known as sharks) who negotiate on behalf of wealthy investors (aka sharks). Although this type of negotiation does help create excitement and drama for viewers, it also places immense pressure on entrepreneurs themselves who must accept whatever offer the sharks make or face disappointment as they believe that more should have been done to gain what was wanted from them.
Expert negotiators know it’s crucial not to make their counterparts feel anxious on purpose, which means avoiding over-stimulating negotiations by offering too many options, such as offering two identical but slightly worded choices; too much stimulus can lead to frustration, which leads to disappointment in negotiations. One strategy to avoid over-stimulation in negotiations is by adding pauses during them which allow everyone involved to calm down and gain perspective again.
4. Don’t Overcomplicate Yourself
Negotiations is a two-way street; both parties should benefit equally from any agreement reached. But don’t overdo your assertiveness so much that you refuse to consider suggestions from those sitting opposite of you.
Before entering any negotiation, it is a good idea to establish your “must-haves” and “deal-breakers,” the things you are unwilling to compromise on regardless of the cost. By setting this clear endpoint in mind and not overcomplicating yourself.
Negotiations strategies that can easily derail negotiations include the agreement bias, nibbling (also known as salami tactic), and snow jobs. An agreement bias occurs when negotiators focus on reaching common ground rather than addressing differences, leading to less opportunities for mutual gain. Nibbling happens when negotiators demand proportionally small concessions they had not discussed prior to finalizing the deal which creates confusion and mistrust between negotiators; lastly, snow jobs happen when negotiators use technical language and jargon to obscure answers from negotiations.
5. Keep the Line of Communication Open
Negotiations is often an exercise in futility; to maximize results it’s essential that both parties involved understand how to communicate effectively in order to get what you want while still satisfying one another.
Knowing your opponent’s style is also crucial in successful negotiations. Consult other business contacts or your advisors, and observe their previous negotiating tactics; even research their organisation strategy for potential points of negotiation.
Understanding your opponent’s position and priorities will enable you to tailor your offer in line with what would likely be the most successful result of negotiation. Conducting research prior to negotiations will also allow you to identify key trends, market demands, and opportunities.
Maintain open communications during negotiations by communicating regularly with your counterpart, whether via email or phone calls. Doing this will keep both parties up-to-date and can also prevent situations from escalating quickly, giving both sides time to address any concerns that have surfaced throughout the negotiation process.
