12,99 €
Mehr erfahren.
- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
Become the best negotiator you can be, one manageable step at a time
In the newly updated third edition of The Negotiation Book: Your Definitive Guide to Successful Negotiating, distinguished commercial negotiator Steve Gates delivers a singular and practical guide to the art and science of negotiation. Steve Gates is the founder of the world’s leading negotiation consultancy, The Gap Partnership – and the methodology in this book is used by the world's biggest businesses to successfully execute their strategies. The book lays out the behaviours and traits associated with successful negotiation and offers a comprehensive model for how power, process and behaviour can have substantial impacts on your next negotiation. You'll also learn how you can shape these factors to optimise value for yourself, your client or your organisation.
The author shows you how to secure more agreements and realise more value with every agreement you conclude. Through simple, realistic and hands-on advice, you’ll improve as a negotiator and apply straightforward techniques to the real-world, dynamic environments in which your negotiations take place. You'll also find:
- Strategies for maintaining a balanced perspective and keeping your ego in check
- Maintaining a focus on the interests and priorities of the other party/parties
- Incremental steps for improving your negotiation ability that are easy to apply and retain
This third edition brings the book firmly into the zeitgeist as it considers the very modern challenges presented to commercial negotiators as a result of an ever-changing world, in which they must navigate technological advancements, the post-Covid reality of virtual negotiation, and the impact of war, Brexit and other macro-economic and political developments that are having far-reaching impacts to business and beyond.
An invaluable roadmap to becoming a Complete Skilled Negotiator, The Negotiation Book is the negotiation playbook that business leaders, lawyers, consultants and other professionals have been waiting for.
Sie lesen das E-Book in den Legimi-Apps auf:
Seitenzahl: 393
Veröffentlichungsjahr: 2022
Ähnliche
Table of Contents
Cover
Title Page
Copyright
About the Author
Acknowledgments
Preface — Context and relevance
CHAPTER 1: So You Think You Can Negotiate?
SO WHAT IS NEGOTIATION?
THE NEED FOR SATISFACTION
PERSONAL VALUES
HONESTY WITH YOURSELF
NOW DO THIS!
CHAPTER 2: Virtual Negotiating
AND WHAT OF TRUST?
THE RISK OF THE WRITTEN WORD
TIME:
MESSAGING IS EASY YET CAN PROVE COMPROMISING
NOW DO THIS!
CHAPTER 3: The Negotiation Clock Face
WHY ARE THERE SO MANY DIFFERENT WAYS TO NEGOTIATE A DEAL?
HOW THE NEGOTIATION CLOCK FACE WORKS
NOW DO THIS!
CHAPTER 4: Why Power Matters
WHAT DO WE MEAN BY POWER?
HOW DOES POWER INFLUENCE NEGOTIATIONS?
NOW DO THIS!
CHAPTER 5: Time – The Distinct Advantage
THE TIME MACHINE
MANAGING WITH TWO CLOCKS AND SOMETIMES MANY MORE
PLACING A VALUE ON TIME AND FLEXIBILITY
THE CONSUMER SEEKS FLEXIBILITY
TIME LINKED DYNAMIC PRICING
TRIGGERS AND CHANGE
TIME CAN REPRESENT RISK AND UNCERTAINTY
NOW DO THIS!
CHAPTER 6: The Ten Negotiation Traits
1. NERVE
2. SELF‐DISCIPLINE
3. TENACITY
4. ASSERTIVENESS
5. INSTINCT
6. CAUTION
7. CURIOSITY
8. NUMERICAL REASONING
9. CREATIVITY
10. HUMILITY
NOW DO THIS!
CHAPTER 7: The 14 Behaviors that Make the Difference
THE 14 BEHAVIORS
NOW DO THIS!
CHAPTER 8: The “E” Factor
THE EFFECT OF HUMAN EMOTION ON NEGOTIATION
CONSCIOUS COMPETENT
YOUR VALUES
EMOTIONAL INTELLIGENCE
THE ART OF LOSING
MANAGING THE EMOTIONAL NEED FOR SATISFACTION
TRUST, TACTICS, AND EMOTIONS
VISIBLE EMOTION
NOW DO THIS!
CHAPTER 9: Authority and Empowerment
UNDERSTANDING EMPOWERMENT
YOUR BOSS CAN BE YOUR WORST ENEMY
EMPOWERMENT WITHIN TEAM ROLES
GETTING EMPOWERED BEFORE YOU START
DECISION‐MAKING AUTHORITY
EMPOWERMENT AND SCOPE TO CREATE VALUE
NOW DO THIS!
CHAPTER 10: Tactics and Values
A QUESTION OF CHOICES AND PERSONAL STYLE
WHAT ARE TACTICS?
NOW DO THIS!
CHAPTER 11: Planning and Preparation That Helps You to Build Value
EACH AND EVERY DEAL IS UNIQUE
UNDERSTANDING VALUE
THE SEVEN PRIMARY VARIABLES
WORKING WITH VARIABLES
KNOWING WHAT VARIABLES YOU HAVE TO WORK WITH
RISK AS A NEGOTIABLE
PREPARING TO MANAGE COMPLEXITY
PLANNING FROM A PRACTICAL PERSPECTIVE
NOW DO THIS!
Final Thoughts
About The Gap Partnership
Index
End User License Agreement
List of Illustrations
Chapter 3
Figure 3.1 The clock face.
Figure 3.2 Hard bargaining positioning.
Figure 3.3 Low‐cost, high‐value win‐win trade‐offs.
Chapter 7
Figure 7.1 The clock face.
Chapter 8
Figure 8.1 The four stages of competence.
Chapter 9
Figure 9.1 Empowerment.
Figure 9.2 Escalation.
Chapter 10
Figure 10.1 Tactics scale.
Chapter 11
Figure 11.1 Trading off variables.
Figure 11.2 Planning tools.
Figure 11.3 Trade‐storming.
Figure 11.4 Trade surveyor.
Figure 11.5 Issue map.
Figure 11.6 Sample agenda.
Figure 11.7 Move planner.
Figure 11.8 Record of offers.
Guide
Cover Page
Title Page
Copyright
About the Author
Acknowledgments
Preface — Context and relevance
Table of Contents
Begin Reading
Final Thoughts
About The Gap Partnership
Index
Wiley End User License Agreement
Pages
iii
iv
vii
ix
xi
xii
xiii
xiv
xv
xvi
xvii
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
249
250
251
252
253
254
255
THE NEGOTIATION BOOK
YOUR DEFINITIVE GUIDE TO SUCCESSFUL NEGOTIATING
Third Edition
Steve Gates
Copyright © 2023 by Steve Gates. All rights reserved.
Edition History
First edition published 2011, second edition published 2016, all by John Wiley & Sons, Ltd.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by law. Advice on how to obtain permission to reuse material from this title is available at http://www.wiley.com/go/permissions.
The right of Steve Gates to be identified as the author of this work has been asserted in accordance with law.
Registered Office(s)
John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, USA
Editorial Office
The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, UK
For details of our global editorial offices, customer services, and more information about Wiley products visit us at www.wiley.com.
Wiley also publishes its books in a variety of electronic formats and by print‐on‐demand. Some content that appears in standard print versions of this book may not be available in other formats.
Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book.
Limit of Liability/Disclaimer of Warranty
While the publisher and authors have used their best efforts in preparing this work, they make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives, written sales materials or promotional statements for this work. The fact that an organization, website, or product is referred to in this work as a citation and/or potential source of further information does not mean that the publisher and authors endorse the information or services the organization, website, or product may provide or recommendations it may make. This work is sold with the understanding that the publisher is not engaged in rendering professional services. The advice and strategies contained herein may not be suitable for your situation. You should consult with a specialist where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
Library of Congress Cataloging‐in‐Publication Data:
Names: Gates, Steve (Business consultant), author. | John Wiley & Sons, publisher.
Title: The negotiation book : your definitive guide to successful negotiating / Steve Gates.
Description: Third edition. | Hoboken, NJ : Wiley, 2023. | Includes index.
Identifiers: LCCN 2022040098 (print) | LCCN 2022040099 (ebook) | ISBN 9780857089502 (paperback) | ISBN 9780857089519 (adobe pdf) | ISBN 9780857089526 (epub)
Subjects: LCSH: Negotiation in business. | Negotiation in business—Case studies.
Classification: LCC HD58.6 .G38 2023 (print) | LCC HD58.6 (ebook) | DDC 658.4/052—dc23/eng/20221003
LC record available at https://lccn.loc.gov/2022040098
LC ebook record available at https://lccn.loc.gov/2022040099
Cover Design: Wiley
Cover Image: © schab/Shutterstock
About the Author
Steve Gates is the founder and Chairman of The Gap Partnership, the world's leading negotiation consultancy. Since 1997, Steve has consulted with and supported global corporations from all business sectors facing the challenges of optimizing value from their many and varied negotiations. His interest in economics, capitalism, and business psychology continues to inspire his innovative flair and passion for greater insights into the art and science of negotiation. His home remains in the Hampshire, United Kingdom.
Acknowledgments
I would like to thank an exceptional team of negotiators from across The Gap Partnership with whom I have shared so many experiences and drawn so much inspiration. They have committed their lives to pushing negotiation capability and practice to a new level, which inspired me to write this account of the Complete Skilled Negotiator. The Negotiation Book is a philosophy based on the human challenges of negotiating today, which they have all helped to build. Every day this serves to inspire our clients around the world.
Preface — Context and relevance
I thought I would find you here. But why here? Why now? Well, if you want to save the world, you are going to have to negotiate with someone. If you want to be a millionaire or even a billionaire, you are going to have to negotiate with a lot of people. If you want to stay in a relationship, there will be times when you will need to concede or even capitulate so negotiation will definitely come into play. Do you want a pay rise? Do you want to start a business? Do you want to optimize an enterprise? Do you want to stay married, even get married?! Guess what?
Yes, negotiation is fundamental to your life and those around you. The way you distribute, create, protect, resolve, and manage anything of value and every minute you invest in you, becoming a better negotiator will pay back, throughout your life. It's an activity that many avoid at all costs. The prospect of perceived conflict of positions or interests and the discomfort that come from it is hardly appealing as a “fun pass time.” My passion for this skill remains because it is central to the viability of every business, your business. Negotiated agreements go beyond viability or profitability. The way you identify and engage with the opportunities to negotiate can set the culture for how your business does business, contracts with others, and defines the types of client or supplier relationships you have. It has delivered peace in war, resolved bedtime tantrums with our children, helped avoid millions of court cases, and has probably helped save a few marriages along the way too. It can deliver immeasurable benefits, although we always like to measure them, for you or those you represent, your family, your business, your charity, and yourself. So yes, it's worth the effort. In the end, the outcomes determine viability or insolvency, profit‐making or loss, growth or decline, certainty or ambiguity, fear or confidence.
If you buy or sell services, products, ingredients, components, platforms, solutions, licenses, accommodations, consumables, or raw materials you can and should negotiate your agreements.
Great negotiators often go unnoticed. So if you want recognition or gratification, it is not the place for you. Negotiators are not interested in winning or glory, which can be rather challenging when you, as I, have an ego that from time to time needs satisfying. It requires a state of mind, a patience, a tenacity that is motivated by curiosity rather than competitiveness, that simply wants to optimize value and opportunity.
As a great negotiator you recognize that the return on time invested is dramatic, perhaps in relationships, time saved, risk reduced, profit made, or even dilemmas resolved. No other skill offers so much value in return for competent performance. But it can take time in planning, preparation, and alignment with others. It takes patience in that nothing is agreed until everything is agreed and there may be lots to agree or negotiate around. In other words, it may not be quick, is rarely easy, and is often stressful. Are you still in?
The most valuable resource on this earth is your mind. My aim here is to help you make the most of life through the agreements you reach. For this to happen we need to open your mind to what really goes on in negotiation and how you can navigate the array of opportunities you will face.
So, why a third edition and what could have possibly changed when not much has changed about negotiation in the past 5000 years or so? The answer is: A lot. The acceleration of change and disruption on a global scale has meant that if this account of negotiation is to provide you with a way of negotiating, it should be relevant and provided with context. I dedicate this version of The Negotiation Book to the concept of CHANGE. Wherever there is change, there is a need to negotiate or re‐negotiate, and in your life, where you finish up with your agreements will either move you on or hold you back.
The desire for convenience and instant gratification driven by 24/7 media and apps that will deliver you just about any service, are conditioning us to expect events to be quick and convenient. The world is moving faster fueled by technology and innovations. Time in negotiation has always been important but given the prevalence of change and the implication of time, I have dedicated a whole new chapter to Time and its central psychological influence on all negotiations.
Working practices have changed involving more remote, virtual negotiations being conducted. The 2020s is an environment presenting new dynamics to relationships, trust, accessibility, opportunity, and vulnerabilities. Therefore, I have dedicated Chapter 2, “Virtual Negotiations” as the attributes of The Complete Skilled Negotiator are not restricted to the meeting room.
So, why this third edition? Think back only six or seven years. In that time, social media has accelerated to become the primary marketing platform used from multi‐national corporations to one‐person start‐up businesses. We now live in a world in which a small group of influencers can make or break your brand. A world where big tech is as influential in supporting or restricting social attitudes as are governments. Social pressure groups have literally changed political priorities and social values in the west resulting in equality, diversity, mental health issues, and well‐being agendas, which have accelerated in certain parts of the world. So, the media has changed, communication has changed, as a result, personal relationships have become weaker, and trust as a glue for negotiation is challenged. Yet in many areas, dependencies have grown stronger as the world of “subscription‐based relationships” serves to fuel the multiple value placed on many businesses.
There is massive momentum from globalization to nationalization or at least the deceleration of globalization affecting workforces, logistics, and supply chains leading to inflationary pressures and ultimately, the increase in the cost of money.
A global pandemic, which has challenged working practices; virtual communication involving Zoom, Teams, Google; and dozens of others. Zoom had over 300 million meeting participants per day in 2020 (Source: Business of apps). Google Meet had over 100 million daily meeting participants in 2020 (Source: TheVerge). Microsoft Teams had 75 million active daily users in 2020 (Source: Windows Central Flexible).
We have enjoyed over the past 10 years in the west ultra‐low interest rates, cheap money, trillions of dollars, euros, and pounds being printed as part of government quantitative easing programs resulting in a surge in stock values followed by inflation, lower growth, and a different backdrop against which to conduct business.
The emergence of Crypto currencies adds a further challenge to governments and banks around how to protect the integrity of the global banking system.
We have witnessed the acceleration of sustainability as a corporate priority. Global warming has now grown into a priority for how people lead their lives to how organizations deliver on their carbon neutral commitments to the growth in recycling, energy generation, and electric EV motors.
We have started to witness the material implications of efficiency through robotics and AI technology. So much change in the world and at such a pace further highlights a one‐size‐fits‐all‐way of negotiating that cannot work. We have even experienced war in Europe that has had a direct impact on economies, politics, and food and energy prices, which in turn has resulted in the need for even more negotiations with new partners.
None of these challenges, priorities, or innovations can be delivered without the alignment of interests of those who can make them happen. In other words, none will happen without building agreements to change, commitments, and action. The things which we thought were important before may have changed, the way you negotiate and with whom you negotiate may have changed at a pace never before experienced. So, it's time to reassess what it will mean for you and how I can help you become the Complete Skilled Negotiator in “today’s world.”
Of course, we still need homes, schools, cars, roads, planes, airports, ships, TVs, computers, and millions of other physical objects. Every industry continues to make the things we need to keep our communities operating. It is the working practices, the flexibility, the risks, the software, the financing, and the partnerships which are changing and are bringing with them the need to incorporate more complex ways of managing relationships and negotiations.
I've taken a fresh look at some of these agreements and how you can gain commitments to better deals. Technology is changing what is possible, what is expected, and what is traded, which is providing a new mix of variables featured in all types of agreements. Following the pandemic, even more negotiations are being conducted through multiple forms of communication. Virtual negotiations are becoming more common than face‐to‐face. With it, there are implications around time, trust, and the ability to negotiate collaboratively.
In this edition I have set out to challenge you with an insight into negotiation from a practitioner's perspective. It cannot be prescriptive because negotiations are by nature dynamic. I will help you to acquire better deals by being aware of what negotiating different deals involves and what it will do to you. Yes, do to you, and if you are not aware of this, you cannot begin to be prepared for your next negotiation. It is you who are responsible for making decisions based on your own judgment.
Any value you may take from reading this book will come from your motivation to change. For change to happen, you have to be open to your own awareness. Self‐awareness into your own make up, preferences, discriminations, past experience. The percentage of time you spend actually negotiating is minimal within the context of your whole life, and yet the consequences of your performance during negotiations will often distinguish how successful you are in life and in business.
The art and science of negotiation is an interactivity that is influenced by culture, ever‐changing circumstances, expectation, relativity, capability, and personal chemistry. The Complete Skilled Negotiator is an individual who has both the skills and mindset to do that which is appropriate to their circumstances and the ability to maximize opportunity during each and every negotiation.
The abilities of a Complete Skilled Negotiator, however, remain the same. Balanced in thinking, ego in check, and a focus on understanding the interests and priorities of the other party. In your chaotic world with multiple priorities, how can you possibly have the capacity to behave in a chameleon‐like approach? How can I even start to suggest that you need to be what you need to be depending on your circumstances, and that you should not be burdened by personal values that wear away at your consciousness?
You can't just advocate reading situations better, taking more time to prepare, and developing the capacity to think around issues, as well as dealing with the relationship dynamics all at the same time. And then focus on the potential of the deal rather than trying to win, understanding that being competitive will only serve to attract friction, which is generally counterproductive (unless used for a specific purpose). That's six different things I have to work at and do all at once, and I haven't even got past the preface yet!
In this 3rd edition, I seek to simplify. If you can improve just one thing from each chapter of this book about the way you negotiate, it will improve your outcomes.
It can be the most rewarding of skills to exercise and the most nerve‐wracking. Is it any wonder that to provide a common way of negotiating that helps everyone to negotiate more effectively has in the past proved such a challenge to so many? Yet simple disciplines, proactive planning, and a clear, conscious state of mind can provide a significant uplift in what you can achieve. I am going to help you to get better deals by first keeping it simple and realistic. One step at a time, and you will see the difference.
The Negotiation Book covers the traits and behaviors associated with the Complete Skilled Negotiator. I use the word complete rather than successful because who are we to judge if your performances are as successful as they might be? We will never know. In our time of rapidly‐changing circumstances and measurement of success by relativity, it can prove hard to objectively measure if your negotiation has been ultimately successful.
I am going to refer to a clock face model that provides a way of differentiating the range of ways we negotiate in a dynamic, capitalist market. The model is there to help differentiate how power, process, and behavior have much to do with the way a negotiation take place and why and how you can move the climate, process, and scope for optimizing value. The clockface is not here to restrict but to empower you as a Complete Skilled Negotiator to negotiate that which is possible … given those opportunities you are presented with or those you create.
The experience I have gained from practical hands‐on involvement in having negotiated with some of the largest corporations on the planet, including P&G, Walmart, Morgan Stanley, Nestle, Unilever, and Vodafone, has helped me to provide this account of what it takes to negotiate effectively. I have also been privileged to work with dozens of highly skilled negotiation practitioners at The Gap Partnership who have negotiated with, advised, and developed hundreds of such organizations globally. It is this experience that has helped us to crystallize what it takes to be a Complete Skilled Negotiator.
I am about to share with you a way of thinking, behaving, and performing. Adopting this approach is ultimately down to you. If you want to be comfortable, that's fine. Negotiation is not. If you want to improve your life, sometimes you have to endure the stress that comes with trying something different and finding yourself in less familiar and less certain circumstances. There is no magic formula or magic wand, but there are principles that you may or may not choose to adopt. The choice will be yours, as will the results.
Sometimes you will need to secure agreements with others who may not always see the world the way you do. This book is about you concluding more agreements and gaining more value from each agreement you're involved in. Understanding what to do, working out when to do it and, most importantly, providing you with the inspiration to do it if you want to … enough! Let's start.
CHAPTER 1So You Think You Can Negotiate?
“It is what we know already that often prevents us from learning.”
— Claude Bernard
SO WHAT IS NEGOTIATION?
So, you think you can negotiate? Most people do, to a point. Negotiation is a necessity, a process, and an art. It's necessary because life is not fair, and you have to engage in agreements throughout life that take care of your interests even when it requires you to look after their interests. We are living with a backdrop of social media that has promoted transparency, everyone's right to a view, pressure groups, comparison groups, often in the name of fairness.
Negotiation evokes complex feelings that many seek to avoid and yet it is fundamental to how agreements are accomplished and take place millions of times a day around the world. The perception in western culture that negotiation involves conflict means that many will seek to avoid or simply capitulate rather than engage in the process. If you can take control of yourself, your values, prejudices, your need for fairness, and your ego, you may begin to realize better outcomes in your negotiations. The biggest challenge here is not in educating you in how to be a better negotiator but motivating you to change the way you think about negotiations and yourself. Of the many thousands of negotiation workshops I have provided at The Gap Partnership, the greatest change I see clients make is that of self‐awareness. Learning about how to negotiate is an exercise in self‐awareness because understanding yourself and what effect a negotiation will have on you, enables you to accommodate the pressures, dilemmas, and stresses that go with it. Self‐awareness helps us to recognize why we do the things we do and the effects they have on our results. It will also helps you to adapt your approach and your behavior to suit each negotiation rather than trying to make one approach fit every situation, simply because it suits your personal style.
Why bother negotiating?
Just because everything is negotiable doesn't mean that everything has to be negotiated. The value of your time versus the potential benefit that can be achieved by negotiating is always a consideration. Why spend ten minutes negotiating over the price of a $10 notebook when you normally make $100 an hour? So you may save $2 – that's 20 cents a minute! However, if it is your next car and a 5 percent saving could equate to $1,500, the time is probably worth investing.
There will be situations involving more important decisions where you are mutually dependent and yet hold different views. When an agreement needs working through, effective negotiation can help provide not only a solution but potentially a solution that both of you are motivated to carry through.
Volume threshold
This relates to a minimum order required for other benefits to be realized. The order may need to exceed a volume threshold of 1,000 before discount levels become applicable.
There is no other skill set that can have such an immediate and measurable level of impact on your bottom line and your life than negotiation. A small adjustment to the payment terms, the specification, the volume threshold, or even the delivery date, will all impact the value or profitability of the agreement. Understanding the effects of these moves, and the values they represent to you from the outset, is why planning is fundamental to effective negotiation. The skill in building enhanced agreements through trading off against different interests, values, and priorities is negotiation. In the business context, it is known as the skill of profit maximization.
So, effective negotiation provides the opportunity to build or dissolve value – but what does value really mean? It can be too easy and is too often a focus on price or money. The question of “how much?” is one, transparent, measurable issue and because of this, is also the most contentious issue in the majority of negotiations.
Yet price is but onevariable you can negotiate over. It is possible to get a great price and feel as though you have won and yet get a poor deal at the same time. For example, because the item did not arrive on time, or it fell apart after being used twice, or you could not return it, and so on. (Ever heard the saying “you get what you pay for”?)
Variable
This can be a price or any term or condition that needs to be agreed upon.
In negotiation, your ego and your competitiveness might fuel the need to “win,” especially where you allow a sense of competition to become involved or become agitated by their irrational demands. However, negotiating agreements is not about competing or winning; it is about securing the best value, the best deal for you. This means understanding:
what the other person or party wants, needs or believes,
their circumstances, options and timings,
how that affects the possibilities.
As a Complete Skilled Negotiator your focus needs to be on what is important to the other party: their interests, priorities, options, if any, their deadlines, and their perception of what is important — all of which may change over time. Try to see the deal as they see it. If you set out, and by that, I mean plan to understand them and their motivations, you can use your understanding to your advantage and, ultimately, work out how to increase the value of the deal for yourself. Being driven to beat the other party will distract you from your main objective, which is usually to maximize value from the agreement.
Pressure points
Pressure points are things, time or circumstances, which influence the other party's position of power.
Proactivity and control
Your first task is to be proactive – to be able to take control of the way you negotiate. The primary reason for suboptimal agreements is when your ego will tell you that you can “wing it” and it will be OK. So, map out each of the issues that will most likely feature in your negotiation or at least those that you are aware of to start with. It sounds obvious but try to be honest with yourself when deciding or agreeing on what these are. Remember, price is only one element of the deal, and winning on price may not result in you attracting the best deal. The single thing that matters is the total value over the lifetime of your agreement.
Becoming comfortable with being uncomfortable
The person on the other side of the negotiating table, phone, or screen may well take a tough position, which could make you feel challenged or even competitive. Human beings are often irrational, so you need to get used to ridiculous opening positions being tabled. Becoming more comfortable with being uncomfortable in situations like this, where you are also likely to experience pressure and tension is one of the most important prerequisites of a skilled negotiator. Without this, our ability to think and perform will become compromised. So you need to recognize that by negotiating, you are involved in a process, and the people you negotiate will need time to adjust as part of engaging in this process. Typically this is when:
any new risks, obligations, conditions, or consequences are presented; and
you make any new proposals that materially change the shape or perceived value of the agreement.
UNDERSTANDING WHAT IS IMPORTANT TO THEM
Drieser, a French manufacturer of electric motors designed specifically for opening and closing entry gates was owned and managed by Jean Luke who had built up a reputation for reliability and longevity (10‐year guarantee) both in the domestic and industrial markets across Europe. Although his business was well diversified, his top three clients made up 40 percent of his orders equating to 2,800 motors a year. Carefully packaged and guaranteed next day delivery on any order ensured Drieser remained competitive. High quality and quick was what Drieser traded on and had done so successfully for 15 years.
Jean Luke managed to secure a meeting with AGP, a major installer of factory gates that offered the prospect of an order of 1,000 units a year. It appeared that they were keen to sign a new supplier, and he was one of three potential partners that they might choose to work with. He forwarded a link to his website, which presented in 3D images of each of the six electric motors in his range. Later that week, he travelled to Lyon and proudly presented his range of motors to a team of three buyers. The questions asked by AGP were “What is your sustainability strategy? How do you plan to reduce your packaging? Have you considered partnering with your customers’ logistics to reduce transport?” These appeared to be the most important considerations of the buyers! Fifteen years of selling quality and speed appeared to no longer “tick the boxes” certainly of this buying group. Jean Luke did not have the answers other than “anything is possible” so retreated to his factory and set about revisiting his logistics and packaging arrangements. AGP had publicly set out to its investors that becoming a carbon net zero company was a primary objective. This was part of the reason they were in the process of reviewing their supplier base. Had Jean Luke identified this, he may well have pitched his proposition differently and in reflecting on his assumptions adapted his own working practices proactively for his other customers. It was a lost opportunity. More research and preparation into what was important to AGP may have helped his pitch or even provided a basis for negotiation. The world was changing and Jean Luke had to get his head around this fact quickly.
In business meetings, people can become frustrated, emotional, and upset if they feel that you are not listening to their needs or are being irrational or unfair with your proposals. Some will even walk away before considering the consequences. So, understanding their interests and having an agenda, which reflects both parties' needs helps to promote collaboration.
The more experienced the negotiator you are working with, the less chance you will have of a deadlocked conversation. They are more likely to understand that they are engaged in a process and that nothing is agreed until everything is agreed. In fact, their experience can result in you attracting a better deal than when you negotiate with an untrained negotiator. Many of my clients insist that their suppliers attend the same training in negotiation as they do as part of ensuring that both parties work towards maximizing total value rather than becoming distracted by short‐term gains or trying to “win”.
THE NEED FOR SATISFACTION
Everyone likes to secure a bargain; the law of relativity: to buy something at a better price than was available before. You only have to visit department stores on December 27th to witness the effect that securing a bargain can have on people's behavior. Such can be the frenzy that it is not unknown for violence to be used where one person feels another has pushed ahead of them in the queue. Many people just can't help themselves when there's a good bargain to be had. In extreme cases, people will buy things they don't want or even need if the price is right.
In business, though, what is the right price? The answer depends on a whole range of other issues, which of course, need to be negotiated. So how do you manage the other party's need for satisfaction? That is, their natural need to feel as though they got a better deal than was originally available.
Do you start out with an extreme opening on price?
Do you introduce conditions that you are ready to concede on?
Do you build in red herrings (issues that are not real, that you can easily, and expect to, concede)?
The psychological challenge here is to provide the other party with the satisfaction of having achieved, through hard work, a great deal for themselves. In other words letting them “win,” or letting them have your way.
Negotiating versus selling
It is a commonly held view that a good “sale” will close itself and that negotiation follows only when outstanding differences remain. However, negotiation as a skill and as a process is fundamentally different from selling. To sell is to promote the positives, the match, to align the solution to the need. It requires explanation, justification, and a rational case. “The gift of the gab” is associated with the salesperson who has an enthusiastic answer for everything. Negotiation does not. Although relationships can be important, as is the climate for cooperation (without which you have no discussion), the behavior of the Complete Skilled Negotiator also involves silence, where appropriate. That means listening to everything the other party is saying, understanding everything they are not saying and working out their true position.
Silence
Silence can serve to strengthen your position during negotiation: the other person may seek to fill that silence with offers, or information, or in some cases simply capitulate as the silence becomes too much to bear.
Negotiation involves planning, questioning, listening, and making proposals, but it also requires that you recognize when the selling has effectively concluded and the negotiation has begun. If you find yourself selling the benefits of your proposals during a negotiation, you are demonstrating a weakness and probably giving away power. It suggests that you don't feel that your proposals are strong enough and that they require further promoting. Once the negotiation has begun, the more you talk, the more you are likely to make a concession.
So, recognizing when the change from selling to negotiating has taken place is critical. You are now negotiating. It is simple enough to shut up, listen, and think, whilst exercising patience. If this silence feels uncomfortable, it is, because you are now negotiating.
PERSONAL VALUES
Values such as fairness, integrity, honesty, and trust naturally encourage us to be open. Personal values have their place within any relationship but business relationships can and often do exist, based on different value sets.
Values are usually deep‐rooted and many people feel defensive about them, as if their very integrity was being challenged. The point here is that they are not right or wrong. I am not suggesting that effective negotiators have no values – we all do. However, in negotiation, when you are involved in a process, what you do and what you are need not be the same thing. This is not about challenging who you are, but it is about helping you to change the things you do.
If you want to remain loyal to your values during negotiation there is nothing wrong with that. However, others may not be as faithful to theirs, which could leave you compromised. In other words, if you choose to be open and honest by, for example, sharing information with the other party and they decide not to reciprocate, guess who will gain the balance of power? And how appropriate is that?
Where natural economic laws, such as supply and demand, result in people doing business with each other, a cooperative relationship can help to create greater opportunities but it is not always critical. Trust and honesty are great corporate values: they are defendable and safe, especially when you have a business involving hundreds or thousands of people buying or selling on behalf of one business. They also help promote sustainable business relationships. However, in a negotiation, these values can be the root of complacency, familiarity, and even lazy attitudes that end up costing shareholders money. I remain a strong believer in collaborative relationships but with the emphasis on optimizing value whilst ensuring the best interests of all involved.
The case for collaboration
If you prefer collaborative negotiations it could be because:
you need the commitment and motivation of the other party in order to deliver on what you have agreed,
you prefer to work with a range of variables that allow you to include all of the implications and the total value in play,
you regard it as a better way of managing relationships, or
you simply fear conflict and the potential negative consequences of the negotiation breaking down.
Whatever your reason, you should ensure that it is because it's more likely to meet your objectives rather than simply a style preference that provides for a comfortable environment. How appropriate this is hinges on how honest you are with yourself about your motives and the benefits that collaboration will bring.
HONESTY WITH YOURSELF
It is often difficult to work out how good a deal you have actually secured following a negotiation. This would be far easier to work out if, when we reviewed our performance, self‐justification was left out of the equation. Have you ever asked yourself: “If I had performed differently or taken different decisions, could I have secured a better deal?” It is easier to move on rather than reflect on our performance and consider the what, the why, and of course, the resulting quality of the deal we finished with. Learning something from each negotiation ensures that, where unplanned compromises have taken place, you take away some value from the experience. This requires honesty with yourself. The following four areas provide a useful frame of reference for review, and as preparation for your next negotiation.
The four challenges we face
Challenge 1: This is all about you
Negotiation is uncomfortable. It sometimes involves silence, threats, and consequences that many find difficult environments to perform well in. If you are to perform well, you will need to accept responsibility for your actions and recognize the significant difference your performance can make to every agreement you are involved in.
The art of negotiation can be learned and applied, but you must have the self‐motivation for change and the ability to be flexible. That's easy to say when you are not under time pressure or there are significant consequences for not pulling the deal off but it remains fundamental to not capitulating when the pressure is on. This is not just about being tough or being prepared. It is primarily about being motivated by the prospect of creating value and profit from well‐thought‐through agreements. You should therefore recognize that your past performance is no indication of your future performance, especially as every negotiation is unique, like every basketball or football game.
So, the first challenge is you. It is people who negotiate, not machines or companies. We all have prejudices, values, ideologies, preferences, pressures, objectives, and judgment, as will the other negotiating party. So one part of our journey will involve your understanding of why your greatest challenge in negotiation is yourself and how, by nature, you see the world from your perspective rather than that of the other party.
The simple process of an exploratory meeting, and seeking to work with someone rather than to assume and then impose ideas on that person, is key to understanding how others see the world and what their objectives are when you are both selling and then negotiating. With so much change happening in the world, the concept of curiosity, not knowing all the answers to start with, is ever more important to engaging rather than competing. As an effective negotiator you need to be able to understand the dynamics of any situation from “inside” the other party's head. Without this insight, you will remain in a state that I call “being inside your own head,” which is a dangerous place to be during a negotiation. If you really want to negotiate effectively, you first have to get your thinking this way round. If you don't know what you don't know, how can you know what you need to know to be able to negotiate effectively.
UNDERSTANDING THE OPPORTUNITY FROM THEIR PERSPECTIVE
A German electronics firm, ETD, who specialized in Bluetooth technology had built a successful relationship with a number of suppliers to the German auto industry. They had developed software that enabled them to program their “in‐car module” to operate with virtually anything Bluetooth‐enabled without interference from any other signals. It was a real breakthrough in being able to offer a reliable high‐quality solution for those fitting electronics into vehicles. It meant that as well as media, mobile, and other devices, wiring in vehicles could almost become a thing of the past. The lighting, fuel flap, windows, and even ignition could be actioned via their Bluetooth device. Although the electronic hardware was not unique, the software itself was, and ETD had set about educating the trade and selling the benefits.
ETD Sales Director Thomas Schnider held a meeting with the procurement team at Brionary, a main components supplier to the auto industry. He presented a carefully planned business case, which justified the premium price point by demonstrating how savings could be made elsewhere as a result of using their proposition.
ETD understood that this type of change would at best be considered for the next generation of vehicles. Their excitement for this potential prevented them from getting inside the head of the buyers at Brionary. The questions asked by Brionary were:
“Can we buy access to the software and program ourselves?”
“We purchase most of the electronics through suppliers who we are co‐invested in. How can we overcome this challenge?”
“How long do you think it will be before this type of software is copied?”
The answer: probably before the next generation of vehicles comes to market.
Thomas and his team retreated to their office in Cologne to reassess their strategy. They had approached the opportunity and the potential to negotiate terms from inside their own head. A month later they agreed a deal which provided Brionary access to the software as a concession for a longer‐term contract on their existing range of hardware components. Had they been in the heads of Brionary, who clearly had an open mind to long‐term co‐investment, their approach and the outcome may have been quite different.
