Negotiating makes a lot of people, especially business owners, anxious--and rightfully so. Often what is at stake is crucial to the stability, growth, or even survival of our companies.  In addition, the negotiation is often lived as a moment of truth for the negotiator. In play are not only the terms being agreed upon, and the bounty to be had, but also the balance of power between the two parties both in the moment and for the foreseeable the future.  However, with a simple change of perspective, any deal can be a moment of collaboration rather than a clash of wills. The key lies in preparing to affirm your needs rather than reacting to the needs of the other dealmaker. To do that, both parties need to be able to answer the following 4 questions.

  1. What do I need and why? Many people start off on the wrong foot because they enter a negotiation less than fully prepared. Showing up with a clear, well-structured ask or need and the reasons to justify it makes it easier for your partner in the negotiation to understand what you want, to ask questions about how that might be accomplished, and ultimately to determine how they can meet your ask. By asking both parties to be prepared to discuss their own needs clearly, you set the stage for cooperation. When I wanted to discuss delivery terms for the purchase of a new line for my company, I first asked my factory to send me a forecast of all the production constraints for the next 6 months--products in queue, machine issues, material sourcing, etc. On my end, I listed what delivery dates would be optimal for us and the reasoning behind them.  Once I received the feedback from my factory, I was able to understand where the friction points would be and came to the discussion prepared with solutions to alleviate them so I could ultimately have the date I needed. The ensuing negotiation was a positive dialogue, rather than an argument, and we both benefited from the discussion.

  2. What do I most fear? As negotiations progress, tension usually arises because the parties involved fear losing something. Often they don't even have a clear idea of what that loss would be--just the perception that they stand to lose.  By taking the time to think about the worst case outcome in advance, we can choose to assert our needs in a positive way, rather than responding adversarially. When I was working on a contract with a web agency to redesign our site, I was afraid that the site's expense, which was great, would be a problem for my company to meet.  However, as I further analyzed my distress, I realized it was not the price itself that caused me alarm, but rather that the time of year when the payment came due would be inopportune. When we sat down to talk through the details of the deal, I was able to be very transparent and confidently explain our business cycle and ask for a payment plan that would accommodate it. As a result, I got what I needed, and the contract was quickly agreed upon, with everyone feeling good about its terms.

  3. Where do our interests align? We have been taught to think of deals as fight or flight situations. We are instinctively poised to react to what we hear from the opposing party in a defensive posture rather than a receptive one. If, instead, we listen for and seek out points of alignment, we can find consensus quickly and painlessly.  When our location was not ready on time, I had the option to pull out of the lease, but rather than exercise it, I chose to ask the landlord to add more amenities to the space. While this cost him extra, it was far less expensive than having his space sit empty for months while he found a new tenant, and it helped us to afford a kitchen and breakroom for our employees that we would have had to wait a long time to be able to afford otherwise.

  4. At what point will I walk away from the deal? When a deal comes to an impasse, both parties are usually angry or disappointed. They leave the table with such animosity, they are unable to ever conceive of working together again. By taking the time to define walk away moments in advance, I am able to remain calm and leave the door open for future collaboration.  When a longtime employee decided to leave, she told us about her new offer and asked if we wanted to counter. We made an offer to persuade her to stay. She countered with demands that were infeasible. We could have tried to come up with more, but we knew that doing so would cause a financial hardship to our company, and that we would feel bitter towards her everyday if we made that choice. Instead, we opted not to counter. We ended up finding someone better suited for the position, and she went on to be happier at her next job.

Coming out a winner in any deal doesn't mean trouncing the opponent. It means getting what the best outcome for everyone involved.

Published on: Dec 19, 2018
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