Last week’s Astronology® explored the idea of negotiations from an economic perspective. Are there other factors to consider when attempting to negotiate effectively? Of course!
When discussing effective negotiation skills, there are three main areas of focus. The first is to understand how and why negotiations and negotiators fail. The second, understanding the role compromise and accommodation play in successful negotiations. The third factor to review is to understand how to plan for a successful outcome.
Why do negotiations and negotiators fail in the first place? Many times, there are some basic reasons for this occurrence. However, negotiations just as easily break off for unknown reasons leaving the parties frustrated and with no opportunity to re-engage the process. According to The Negotiation Institute there are three fundamental reasons for negotiation failure:
- The great majority of negotiators never translate their general knowledge of negotiation into specific skill(s) that can be called upon with the same simplicity as the multiplication tables…“Framing” is a means to process and organize information. A frame provides a perspective of the problems or issues for a decision maker. Using a framework can allow you to consider all potential gains and losses and available options for any situation. Without first committing some specific negotiating framework to memory, the growth of truly exceptional negotiating skills is practically impossible to achieve, outside of a slender professional specialization or set of issues.
- The majority of negotiators focus on what they believe their starting positions are rather than focusing on the preferred outcome. In other words, far too many negotiators focus on the weaknesses or strengths of their starting positions rather than focusing on the accurate assessment and quantification of the real challenges and issues standing between themselves and their counterparts. One of the most vital skills a negotiator can develop is the skill of knowing how to assess and quantify the real issues that stand between the parties – rather than acting or reacting based upon a perception of what one believes those issues to be. Learning to accurately assess and quantify the apparent and hidden issues between the parties involved in a negotiation is a skill that necessitates disciplined focus and a systematic approach.
- The third fundamental reason negotiators fail is fear. No matter how much you know about negotiation or about the strengths and weaknesses of your counterpart, if you are missing the courage, discipline, and determination to act in the face of risk or uncertainty, you will frequently fall short of achieving the best possible outcome in a given situation. Fear will always invite you to aim for less than you are capable of achieving. Defeating fear requires a genuine commitment, a methodical process, and a journey beyond the borders of flawlessly executed tactics and techniques.
With this basic understanding of why negotiations and negotiators fail, the second critical aspect to effective negotiations is to understand the role that compromise and accommodation plays in effective negotiations. According to an article from Poyner & Spruill LLP on business negotiations, it is important to recognize and understand the roles compromise and accommodation play in the negotiation process.
The primary goal of effective negotiation should be to achieve a deal that both parties can live with and that accomplishes your purposes without making the other party walk away from the deal or permanently scarring a valuable relationship. Negotiation in this context requires informed, creative compromise and accommodation. Effective compromise requires homework and credibility as well as critical analysis and perspective regarding the other party and the deal. A key to good negotiation is the ability to recognize a deal that should not be made or cannot be made on reasonably acceptable terms due to the bargaining position or attitude of the other party. This is often the case if the other party or its representatives constantly create crisis and impasse. When this happens, the points either are valuable to the other party (or that party wants you to think they are) or it is their style. It may be good judgment to terminate negotiations because a reasonable deal is probably not possible.
The third and final element that facilitates effective negotiations is to understand how to plan for a successful outcome for your negotiation efforts. According to an article by Jonathan Farrington in Ezine Articles, there are six key aspects of planning for effective and successful negotiations. These include the following:
- Objectives: Before entering into the negotiation, you need to have a clear idea of your objectives and try to work out those of the other side.
- Information: It has often been said that information is power. The early phases of negotiation consist of both sides finding out more information before talking about a specific deal or set of alternatives.
- Concessions: Negotiation is a process of bargaining by which agreement is reached between two or more parties. It is rare in negotiation for agreement to be reached immediately or for each side to have identical objectives. More often than not, agreements have to be worked out where concessions are given and received and this is the area where the profitability of the final outcome will be decided.
- Strategy: Planning your strategy is important in negotiation. Once you know your objectives, you need to work out how you are going to achieve them. It is also useful to try and see the negotiation from the other side and try and work out what their strategy will be.
- Tasks: If you go into negotiation with a colleague or colleagues, you need to decide during the preparation phase: What role will each team member take in the negotiation? How can we work together in the most effective way?
Once you’ve done your homework, it’s time to relax, right? Wrong. Being an effective negotiator requires skill, practice, and keen awareness of the external environment. Practice your negotiation skills at home on the small things – like what to make for dinner – and you’ll be ready when the time comes to negotiate that new labor contract or win over that key candidate for an executive role with your fair and effective total compensation program.
It’s also important to remember that negotiations take place every day. We tend to think of negotiating in “big” terms like union activity or new employee recruitment. Delegating project duties, determining how to celebrate this month’s office birthdays, and working in a cubicle environment all require the tact and skill of any effective negotiator.