Mastering the art of negotiation: strategies for success
Negotiation is an essential skill that permeates our daily lives, from settling family matters to brokering multibillion-dollar infrastructure deals. Drawing from nearly three decades of top-tier experience as a commercial lawyer and strategic advisor, I've distilled ten effective strategies that can elevate your negotiation game.
1. Give yourself adequate preparation time
Embarking on negotiations unprepared is a recipe for disadvantage. Take the time to analyse your interests, concerns, and what outcomes you'd find acceptable. Create a terms sheet detailing each issue and your commercial positions. This not only clarifies your stance but also serves as a valuable thinking tool.
2. Craft a robust Plan B
Always have an alternative in mind – a Plan B – in case negotiations don't go as planned. Know what it’s worth to you and be ready to pursue it if the final offer doesn’t measure up. This approach ensures you negotiate with confidence from a position of strength.
3. Consider their Plan B
Delve into your counterpart's alternatives to gain insights into their walk-away points. This includes understanding both organizational and individual perspectives. Knowing your counterparty’s Plan B from both perspectives will give you a more complete picture of their walk-away alternatives.
4. Articulate and understand interests
Before presenting positions, express your interests and concerns, avoiding non-negotiable stances. Seek to understand your counterpart's interests by asking questions and actively listening. When they propose something different, dig deeper. Ask why, and what concerns they are seeking to address. Repeat back what you heard. The other side is more likely to listen to your interests if they feel you have heard theirs.
5. Share information to expand the pie
Mutually beneficial trade-offs can only be achieved when the parties disclose information that reveals the interests behind their stated positions. But the fear of saying too much – and giving the other side an edge – often causes us to hold back details of our interests. If you want your interests to be taken into account, you need to explain them. Once each party understands the other’s interests, they will be better able to identify potential solutions that serve the interests of both parties – or that ‘expand the pie’ before it is divided.
6. Use objective criteria
Bring some objectivity to the table. Establish objective criteria to judge proposals. This adds an element of fairness and rationality to the negotiation process.
7. Take time to consider offers
Avoid succumbing to pressure by asking for breaks to consider offers. This prevents hasty decisions and provides the mental space needed for thoughtful responses. Good negotiators always have a reason to step back when needed.
8. Constantly improve your Plan B
The better your Plan B the greater your negotiating power. By continuously improving your Plan B, you will bolster your confidence and improve your ability to secure more favourable terms.
9. Reassess their Plan B
After understanding your counterpart's interests, reassess their Plan B. If you can't offer something more attractive than their best alternative, it’s time to end the negotiations and pursue your own Plan B.
10. Trade concessions for value
Create value by trading concessions. "We'll give you X if you agree to Y." Propose multiple packages simultaneously to gauge your counterpart's preferences. This process provides insights into what holds value for them.
Conclusion
Negotiation is an essential skill set crucial for professional and personal success. By incorporating these strategies, you can navigate negotiations effectively, whether you're dealing with personal matters or high-stakes business contracts. Remember preparation, reflection and a strategic mindset are key to becoming a successful negotiator.
Further Reading: For those keen on honing their negotiation skills, I recommend "Getting to Yes" by Roger Fisher and William Ury. This insightful book lays the foundation for many of the concepts discussed here.
Best of luck on your negotiation journey!
Do you have any negotiation tips that you’d like to share with the Infralegal community? If so, please add them in the comments below.
