Tips for leading successful negotiations

Make_me_an_offerOften in business or when supporting coaching clients, I am asked to prepare or help someone to lead a successful negotiation. Here I share my key tips for leading successful individual negotiations:

  1. Prepare in advance – understand the principles of bracketing. Plan for, and clearly know your high point, your low point and your mid point.  Your midpoint should be what you are happy to be paid, your low point is your walk away, and anything upside of your midpoint you should be delighted.  Think about your strategy in how you could move your first asking point greater then where it would otherwise be to help raise the midpoint.
  2. Try to avoid putting your price down first – no matter what.   Look to get the person you are negotiating with to state their position, their thinking, their decision-making criteria. You can look to set the agenda and ideal outcomes based on principles before a number or the details of the introduction gets introduced.
  3. Keep your cards close to you and actively listen to the other party to help you determine your approach and negotiation tactics.  To get the other person to state his or her position first assuming the status quo is fine with you and there is no pressure on you to make a move, be bold enough to say to the other side, “You approached me. The way things are, satisfies me. If you want to do this, you’ll have to make a proposal to me.”
  4. Hold to your position for as long as you can – see how far they will come to your point first without you budging or without you budging far.  Communicate all the time that you are prepared and ready to make the deal and find something that works for everyone.
  5. Understand all the influencers and decision makers – you must know  and work with the person authorized to make the deal.  Talk to the key decision maker. Spend time in researching, listening and understanding their drivers and frame of reference.
  6. Discussions should always begin with a clear understanding of the win-win-win.  How do they win, how do you win, how do you win together?  Much research has been done to support the approach of winning for everyone is a much better outcome and brings greater results (financial & emotional) then if you have win by screwing down the other party.  Negotiation is based on the foundations of inspiration and persuasion.  How can you make the other party see your point of view or vision for the future?
  7. Negotiation is not always about money – negotiation can be based on a number of factors. Think creatively and really understand your own drivers.  For instance, in salary negotiations you may be looking at any one of the following elements:  Base Salary, Added Benefits, Profit Share & other short &/or long term incentives, Working environment & flexibility in hours, Additional holiday periods, Job enrichment & satisfaction based on doing more of what you love.
  8. Avoid being the first to double bracket or to negotiate against yourself (you would be surprised at how many people do this – make an offer, then jump in with another based on the other person’s non-response).  Hold and wait until the other person makes their offer known.  Hold too on your final position and get them to talk about what they are thinking and what you can do to help them.  Reinforce their and the combined win in the win-win-win situation. Identify any potential barriers to bringing closure to the negotiations.  Think about how you can remove them or how else they could be viewed and change your tactics accordingly.
  9. There may be variables in a negotiation, understand what they are and be clear (first be clear to yourself) as to what is important to you – eg timing, breakdown, flexibility etc
  10. Consider the power of using time as a variable – what needs to be done by when and how flexible can you or the negotiating party be around that (and what is the value to you around that variability).  Gain a sense of urgency – if the other party is keen to bring closure to the negotiations you may in fact be able to use that urgency to your advantage by moving slowly and looking like you don’t care how long it takes.  However look to ensure the principles of having something that works for everyone remains a priority.
  11. Never negotiate when you are feeling emotional.  Try to keep a level head at all times.  If you need a break, request time to think about the offer until you can think straight again.  Talk out loud to someone else if you need some help in unraveling your emotions and to help reform the confidence and rationale in your approach and  position.
  12. Remember to celebrate the final result of your negotiations. It is important to ensure all parties feel good about the deal that was done.
  13. Once concluded, spend some time reflecting – could you have done things differently for next time? Any lessons learned?
  14. Finally, never let the other party know you were prepared to accept less or pay more in the negotiations.  They will feel bad, and you will lose any goodwill created by the win-win-win principle.

Each of us negotiates many things and many times in daily life and in business. By considering these simple strategies, you should obtain an outcome you are happy with.

For leading more complex negotiations, there are many resources available.  One book that I recommend reading is “Negotiation Genius – how to overcome obstacles and achieve brilliant results at the bargaining table and beyond” by Deepak Malhotra & Max H. Bazerman, Harvard Business School 2007

What have you found works for you?  Do you recommend any strategies or resources that have helped you?  What tips would you offer others who want to lead successful negotiations?

Can you afford the expense of a cheap lawyer ?

drive-thru-lawyer-brookenovak Ever heard the saying “there is nothing more expensive than a cheap lawyer”?  That lesson can easily be applied to the decisions we make every day regarding our business vendors.

It is easy to make the mistake of spreading our budget too thin or going with the cheapest option – mistakenly thinking we are getting more bang for buck or that we are saving money.   Often you will find this approach will result in poorer quality and not achieving the goal you set out to do in the first place.  The cost either in additional time or further investment to bring what you are doing back to scratch can often be far greater than if you had aligned your budget to your goals in the first place (or your goals to your budget).
Although this rule applies as much to the personal decisions we make, it is less likely we fall into that trap because we tend to naturally protect “our hard earned money”.  We will spend far more time in determining return on investment whether it is through measuring easy to compare metrics, searching online or by talking to family and friends to better understand their experiences and opinions.  We seek recommendations feeling confident of asking someone we know “how did you find your builder, car, computer, TV, phone etc? “.  We do this whether it is a conscious best practice or not. 
It has always struck me the difference that people feel about spending their own money vs. their employers’ money.  The sense of responsibility and ownership for return on investment regarding business purchases often differs from the way the same decision would be approached if it was their own money. At a time where organizations are looking at innovation as a means to survive the global economic environment, we should also be revising our planning and procurement approach.  And this is more about the culture you create rather than defining it through process.
Encouraging your team to spend time on determining the best plan to achieve your goals against budget, investing in research and assessment of the right vendor, obtaining testimonials directly from similar type businesses who have engaged or purchased from that vendor, investing in developing a good brief or requirement specifications; all will help you determine the best partner for you and your company – and I do emphasize that you see the relationship as a partner not just vendor/supplier.   This should result in you choosing the best partner that truly shares your vision and belief in your desired objectives, and is motivated to bring you success beyond “making the sale”.

If you are delivering on someone else’s brief, and you find the scope and budget are out of alignment, you may need to either negotiate more budget or learn to reset expectations when determining how best to achieve the goal within the budget you have.
Whatever you do, don’t make the mistake of going with the cheapest option, spread your budget too thin, and have the outcome you are working to achieve at risk.  Even with the financial pressures as they are today, you can’t afford the ‘real’ expense of going with the cheapest lawyer or any other vendor unless you really have weighed up the true cost and return of that engagement.
The same goes in reverse.  If you are offering a product or service, make sure you invest in understanding the brief and proving how you are best able to help your client achieve their brief.  Be realistic about pricing and quote what you believe is fair and reasonable for the scope of brief or requirement given. Everyone needs to win for success to be fully realized. 
You need to buy well to return well. And this may mean you need to review your purchasing culture right now.