According to Hollywood, a successful negotiation involves threats, yelling, landmines and the eventual "gotcha," until one side finds itself trapped and surrenders. In order to win, someone must lose. Little wonder that most people think the goal of negotiation is to win, usually in the form of money, ignoring the impact on the other team and any long-term consequences.
My experience is that any negotiation is just one conversation in a series of conversations, and you do best when you figure out how the other side wins. In any transaction that is important, personal trust is a necessary underpinning for a successful negotiation, and you should want the other side to win something it wants, just as you want to win something that you want.
Here's how I approach negotiations in a way to build that personal trust and accomplish positive outcomes for all involved.
Choose the people in the room carefully. You may not be able to pick who sits on the other side of the negotiation table, but you want to carefully select members of your own team. It's tough to hold productive discussions with anyone who prefers fighting to finding solutions or is only concerned with winning in the short term. Make sure they are trustworthy, on board with your strategy and tactics and won't accidentally scuttle a deal.
Don't play mind games. Many people start negotiations by trying to assess who is more willing to walk away from the table or who has more legal or economic firepower. This kind of mindset immediately turns negotiations into a potentially hostile power struggle and a battle of wills that benefits no one. If you play mind games, be prepared for a negotiation where misdirection and deception are the primary tools, and one where your odds of success go down.
Ask questions. Inquiring about the other party's perspective may yield insights into how to make a deal. For example, if the other side says it's concerned primarily about price, you may be able to set the terms on other items. The more you understand what they want, the more you can see how you can deliver value to them. And the more value you can deliver, the more value they may be willing to exchange. At a minimum, the odds of a transaction increase as you understand more.
Empathize. Consider the other team's interests. This attitude will show them respect, put them at ease and encourage them to be more open and honest, all of which makes it easier to find a solution that's satisfactory to all.
Seek harmony. The goal in negotiations should be to create value for all parties. That doesn't mean being a doormat or capitulating; it means there is no point in beating the other parties into submission or making them feel like losers. If the other side benefits and you walk away satisfied, you've created two winners. Strengthening your relationship with the other party can also lead to more business, referrals, a stronger brand and more lasting agreements.
Remember your reputation. Getting your way at any cost is not how you want to be known. No matter how large any one transaction, it is not worth jeopardizing the millions of transactions that life is made of. It is better to remember that every negotiation, every transaction, is part of a series, and that things have a way of coming back around - especially in an increasingly shrinking world. That doesn't mean you are obligated to give away the store, but do you want the other side to leave the table feeling as if they have been treated with respect. If they do, more opportunities may come your way.
Be transparent. Finally, I've found the best negotiation "tactic" is to be transparent and authentic myself. Leading by example is the best way to encourage transparency, and, at a minimum, it certainly saves time. In the words of Lee Iacocca, the former CEO of Chrysler, negotiation is all about building trust: "Being honest is the best technique I can use," he said. "Right up front, tell people what you're trying to accomplish and what you're willing to sacrifice to accomplish it."