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The ABCs Of Negotiating

Posted on 24. Jul, 2005 posted by Bill in Employment News

The ABCs Of Negotiating

If you’re in the middle of negotiations, “non-starter,” “take it or leave it” or “not at that price” shouldn’t be part of your vocabulary.

Most universities don’t offer Negotiation 101, and few parents teach their children the nuts and bolts. It’s a learned technique, and picking up the basics isn’t hard. Whether you’re a veteran sales rep for Pfizer (nyse: PFE – news – people ) or a Merrill Lynch (nyse: MER – news – people ) trader, you can always sharpen your skills no matter extensive your experience.

“The basic mistake people make in negotiations is not listening,” says Steven P. Cohen, president of the Negotiation Skills Co. in Pride’s Crossing, Mass., and author of Negotiating Skills for Managers. “Information is the most important commodity that changes hands during negotiations. If you don’t listen, you won’t get what you need from the other party. You then may be accused of failing to respect them by not listening, and you may miss something critical to your decision-making process.”

There are three basic points to understand about negotiations before sitting down to talk:

1. At the outset, everything is on the table.

2. Unless you’re in the military and can give orders to subordinates, there will be give and take.

3. The purpose of negotiation is to cut a deal–not to smash your opponent to bits.

When preparing for a negotiating session, start by defining the issue and gathering needed information. If possible, get relevant information from the other side. Organize it logically so you can refer to key points during the discussions as needed.

Assess the strengths and weaknesses of your position. Think how you can use your strengths to increase your gains. Don’t engage in preemptive surrender, even if the point is trivial to you. Save such points and use them as chips to get more of what you want from the other side.

The preliminary rounds may be conducted by e-mail, fax or even snail mail. This will give you a chance to assess the skills of your opponent and to rough out what the other side seeks. Pay attention to what the other side is saying. This is the time to think about what you can trade to get what you want.

Set the time, place and manner for face-to-face talks. Don’t let the logistics of the meeting overwhelm you. Remember that opening offers are intended to set the bounds for continued negotiations and rarely appear in the final deal. Nevertheless, make a realistic opener. Asking for the moon–and champagne in the water fountains–will get you nowhere and is a waste of time.

Always be cooperative, but stay alert. Assume your opponent is a little smarter than you, so work, work, work to gain an edge. Think about the tactics you will use to reach an agreement and try to anticipate what the other side will throw at you. If it’s still early in the game, there’s no reason to become depressed or overly optimistic about the probable outcome.

Outline what you can give up, and think about the price of such concessions. There will always be sticking points in protracted and detailed talks, and, if you’re smart, there’s always a way around a problem no matter how big it may seem at the time. Never box yourself in, and always make it possible for your opponent to concede gracefully while getting something, no matter how small, in return.

When you’re close to wrapping things up, make a list of each point covered. When you’ve double-checked each point, get it in writing ASAP.

Remember the insight of Yogi Berra, that great American ballplayer and all-around philosopher: “It ain’t over till it’s over.” An extended delay between the handshake deal and the signed contract will almost certainly lead to complications, so when you’ve reached an agreement and reviewed the details, wrap up the final contract quickly.

Both sides leave with something in hand after a good negotiation. You may not have gotten everything you wanted, but getting most of what you sought beats losing your shirt. If you’ve negotiated honestly and forthrightly, you’ve laid the groundwork for profitable discussions in the future.

“Negotiation is not a competitive sport,” Cohen says.

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