Essential Negotiation Skills
Reaching an Agreement That Works for You
When do you need strong negotiation skills? In short, every day!
Whether you're hammering out the details of a multimillion dollar business deal, allocating responsibilities among your project team, or just haggling over where to order takeout, you're negotiating. And the better you do it, the more likely you'll be happy with the outcome.
What's more, if you use your negotiation skills really well, the people you're negotiating with will be happy, too!
In this article, we look at how to prepare for various forms of negotiation, and explore all the skills that you'll need to negotiate confidently and successfully – to do the deals that are right for you.
What Is Negotiation?
Negotiation involves two or more people finding an acceptable solution to a shared problem. Successful negotiators control the process, and come away with a result they're satisfied with – whether or not they've made compromises along the way.
Negotiation isn't limited to "big decisions." When you're working with other people, much of your time is spent negotiating – even if it's just deciding whose turn it is to collect the coffees!
For projects to be successful, roles, strategies, targets, and deadlines all need to be agreed, ideally to everyone's satisfaction.
And there are also times when a very obvious negotiation process is taking place, such as setting payment terms with a client, or agreeing the contract details for a new job.
So, what are the skills you need to negotiate well?
Do Your Negotiation Homework
Whatever approach you take to the negotiations themselves, preparation is key.
Common sense should tell you how much detail to go into. Turning up with reams of paperwork to discuss a team member's request for time off would likely cause amusement, dismay or resentment. Equally, having no hard data to hand at a crisis board meeting would almost certainly cause your reputation serious damage.
To help you get your preparation right, here are eight factors to consider in advance:
- Goals. What are you trying to achieve during the negotiation? And what do you think the other person's goals will be?
- Trades. What might you be able to ask for, and what would you be prepared to give away?
- Alternatives. If you really can't achieve your goals, what would be your "best alternative to a negotiated agreement" (BATNA)? Your position will be more secure if you have a number of options, so it's worth putting plenty of effort into addressing this point.
- Relationships. How have negotiations gone with this person in the past? Just as importantly, what kind of relationship do you want with them in the future?
- Expected outcomes. What precedents have been set? Based on those, and on any other evidence you have, what seems to be the most likely outcome of this negotiation?
- Consequences. Is this a big, one-off deal, or one of many smaller negotiations? What do you and the other party stand to gain or lose?
- Power. Who holds the power here? How might this affect the negotiation process?
- Solutions. Taking all of these points into account, what do you now consider to be a fair outcome – one that you can put forward with confidence?
Our Negotiation Preparation Worksheet will help you to explore each of these factors in turn. Use it to collect your thoughts as you start planning your negotiating strategy.
Choose Your Negotiation Style
Many people assume that there's just one, "perfect" style of negotiation that we should all be aiming for.
In fact, there are several approaches to choose from. It's important to vary your style to suit the subject – and significance – of each negotiation you enter into.
Think about what you're trying to achieve, how important "total" success is, and how willing you are to compromise. Also, bear in mind how much you need to maintain an ongoing relationship with the other people involved.
Lewicki and Hiam's Negotiation Matrix is a useful tool for choosing the best negotiating approach. It characterizes the five key styles as "accommodating," "competing," "avoiding," "collaborating," and "compromising," and clearly outlines the pros and cons of each one.
With your preparations complete, it's time to have the crucial conversation.
From the moment you start, keep your end goals firmly in mind. If the conversation goes to plan, what will you have achieved? And how will the different parties feel about it?
This should also help you to anticipate how the next few minutes will go.
Negotiation can be an emotional process. Use the six steps of Interest-Based Relational conflict resolution to ease any tensions, and to reduce the risk of negotiations breaking down. You'll also increase your chances of reaching a satisfying result.
The six steps are:
- Treat the other person with respect.
- Separate the person from the problem.
- Understand their point of view.
- Listen first, talk second.
- Stick to the facts.
- Explore options together.
If you're going to be working with this person again in the future, you'll both want to be open and fair. Try to achieve a "win-win" result by being as creative as you can in all areas of the negotiations.
For example, you could:
- "Expand the pie," extending what's on offer to accommodate both parties.
- Suggest alternative solutions, exploring various possibilities that might work for everyone.
- Trade favors, each of you agreeing to honor particular priorities for the other side.
- Offer compensation, recognizing where sacrifices have been made.
Tactics like these can even enhance your relationship with the other party, and build your professional reputation. "Harder" approaches, on the other hand, may damage your chances of future success.
However, be aware that the other party might have no such scruples, especially if they don't expect to deal with you again. They may decide to "play hardball" – so you'll need to be ready!
Someone taking this approach will likely kick things off with an opening offer. They'll be expecting to negotiate, but they'll also have a clear target in mind. And they'll have a "resistance point," where their flexibility ends.
You'll need to spend a large part of the conversation figuring out their target, and their resistance point, so that you can negotiate effectively. You'll also need to know where you stand on these two issues yourself.
This is the distributive style of negotiation commonly used when buying or selling real estate, for example. You're unlikely to have further contact with the other party afterward, so you can "go all out" for what you want without fear of embarrassment or reprisal.
But think carefully about taking this approach with someone at work. You never know when your paths may cross again!
Increase Your Chances in Negotiation
No matter how prepared you are, or how carefully you follow your chosen approach, you'll need to draw on a range of people skills to achieve the results you want.
It's important to be assertive in negotiations, but remember to listen, too! And try to strike a balance between emotion and logic – "heart" and "head." The Persuasion Tools Model can help you to find your most effective natural negotiation approach.
Whatever you're negotiating, confidence is crucial. If yours is low, focus on building a strong relationship with the other participants, rather than on giving a brilliant performance. Whoever you're dealing with, you'll likely get a better outcome if you can gain their trust – and if they feel they can trust you in return.
Keep on track despite any nerves by avoiding the most common mistakes of negotiation, and by understanding the dos and don'ts of persuading. Knowing what to avoid is often just as important as remembering the best practices to follow!
Download our Bite-Sized Training™ session on negotiation for an extra boost to your capability and confidence.
Negotiation happens in all areas of life, not just during set-piece business deals.
Prepare appropriately for different types of negotiation.
Choose your negotiating style based on your goals, and on the kind of relationship you want to have with the other party in future.
Remember to use all your people skills to maximize your chances of success.
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