4 Ways to Beat Back a Negotiation Bully
There will always be bullies. Some people--and some organizations--use strength as a lever to get what they want and to make sure others don't. They eventually graduate from the schoolyard to the office or boardroom, where they want to beat anyone smaller through negotiations. With a startup, chances are that you are the smaller one.
The answer to getting what you need out of a negotiation is not to fold and give in but relearn the childhood lesson of standing up to the bully. When it comes to negotiation, you have to get smart about the preparation and process. According to Harvard Business Review's blog network writer Carolyn O'Hara, there is much you can do. Combine some of her suggestions with classic techniques and tools from negotiation theory, and you can make a stand that will always leave you better off than you otherwise would have been.
Do your homework
Power can diminish someone's ability to understand how another thinks. This is excellent news for the entrepreneur. A negotiation bully, relying on a sense of power, will have less ability to get inside your head than you, who feels relatively powerless, will have to get inside his or hers. Use this advantage to the hilt. Do all the research possible to understand what both the company and the company's negotiator want, as those things may be different. Know the state of their competition and the pressures and opportunities in the industry.
Build your strategy
As much as the bully wants to rush you into a negotiation, decline. If he or she is really interested in doing business, he or she won't run off. If he or she does, then he or she is not interested, and you save yourself time. You want the space to develop a negotiation strategy on the basis of the connections between what the other company needs from you and what you would like in return. Understand the potential trade-offs, and create a set of potential solutions you can put into play. If the other side wants to crush your pricing, look at a combination of significantly cutting back what you will provide and extending the life of the contract to guarantee revenue over a longer period.
Use your knowledge
With the research you've done, you should understand the bully's position. Use that information. O'Hara discussed the case of a small company negotiating with Siemens. At one point, a Siemens executive asked about the company's ability to scale and said that there were two larger competitors. The small company, having done its homework, knew that the rivals had turned Siemens down, meaning that the point was an attempt to get the small company to buckle. But it didn't have to, because Siemens had already run through its options.
Be ready to say no
There is almost never a case where a single negotiation represents life and death for a company. Remember, no matter how hard the bully tries, he or she isn't the boss of you. You are. Always keep your bottom-line requirements in mind, and be ready to walk away if necessary. It doesn't mean that the answer no is necessarily an ultimatum. Instead, it represents your calm understanding that some things are unacceptable and willingness to tell the bully so. (Remember, the other side isn't going to understand what you want the way you understand what it wants.) If it won't counter with another proposition, you walk away. If it does propose something else, consider it, and see if it works within your strategy.
ERIK SHERMAN | Columnist
Erik Sherman's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.