home • Public Workshops • testimonials • contact
Copyright © 2002-2010 Baker Communications of Houston, Texas. All Rights Reserved.
- Upcoming Negotiation Seminars
- Contract Negotiation
- Win-Win Negotiations
- Sales Negotiations
- Handling Negotiations Obstacles
- Negotiating Skills For Purchasing
- Electronic Negotiation
- Negotiating With Limited Authority
- Negotiating To Resolve Conflict
- Managing Negotiation Value Creation
- Negotiating With Your Project Team
- Logistics Negotiation
- Negotiation Training Testimonials
- Contact Us
- Home
Negotiations Training Tips:
Conversation or Negotiation?By James A. Baker
Negotiations Training Institute
July 2009
I am still surprised by the number of people who come to us for
negotiation training who fail to grasp even the most basic and
obvious concepts of the negotiation process. For instance, one of
the most common requests we hear from clients is that they want us
to teach them how to convince a vendor or a customer to stopping
pushing back on a particular price point and just accept the offer
on the table. Folks, that is not a negotiation, that is a
conversation, and probably not a very pleasant one at that.
The difference between a conversation about a business deal and a
negotiation about a business deal is this: to be a genuine
negotiation both parties focus on trading items back and forth until
both sides receive enough value to be satisfied. I am not saying
that “take it or leave it” conversations never occur, I am only
saying that you should not call them negotiations.
If you want to enter into a genuine negotiation that will not only
help you come away with a satisfying result but will also help you
strengthen relationships with the other side for the sake of future
business, you must understand four key principles:
Key Negotiation Principle #1 – Understand the Interests of
both sides. Interests are the Why – the underlying motivators - that
bring someone to the negotiating table in the first place. These may
not always be obvious, but it is these underlying interests that
will influence a negotiator’s vision for what constitutes a
satisfactory agreement. Take a salary negotiation, for example;
employees always love to get raises, but what if a particular
employee is motivated by more than a desire for extra walking around
money? What if an employee has a daughter entering college and has
an urgent need for at least another $500 a month in their paycheck?
The negotiation is not about money, it is about being able to
adequately support this child during college. Even if the employer
generously raises this person’s salary by $250 a month, it may not
be enough to satisfy the underlying interest of the employee, and
the employee may start looking for a position with another firm. On
the other side of the table, the employer has interests, too. The
employer may be faced with declining sales in a down economy which
is forcing him to hold the line on salaries in order to help keep
the company out of Chapter 11.
Key Negotiation Principle #2 – Understand the Issues for both
sides. Issues are the What – the things that get discussed and
traded during a negotiation. In a salary negotiation, these issues
may be things like the hourly pay rate, the number of hours worked,
the cost and type of benefits offered, etc. Both sides will try to
leverage these issues to their advantage in order to do the best job
of satisfying their underlying interests.
Key Negotiation Principle #3 – Avoid Intractable Positions.
Positions are the How – the solution that makes the most sense to
each side because it will create the maximum opportunity to get
their needs met. In the salary negotiation above, the employee’s
opening position is a request for an increase of $500 per month. The
employer’s opening position is an offer of an increase of $250 a
month. There is nothing wrong with establishing an opening position.
Positions define the parameters within which the negotiation takes
place. These two positions tell us that the employee is not likely
to get more than a $500 increase and the employer is not likely to
pay less than a $250 increase. Under normal circumstances, the
negotiation will now begin and focus on something in between these
two numbers. However, sometimes people get stuck in their positions
and refuse to budge, perhaps because of fear, obstinence, hidden
agendas, or a genuine conviction that there is only one solution
that will work for them. However, once either side digs in to a
position, the negotiating stops; it now becomes a take or leave it
situation, and very often both sides walk away with nothing.
Usually, this is not the best outcome for anyone.
Key Negotiation Principle #4 – Learn How to Give and Ask for
Concessions. Concessions are at the heart of what turns a
conversation into a negotiation. By making concessions, the parties
involved abandon their “take it or leave it” positions and try to
find ways to work together to achieve a solution that will provide a
benefit for everyone. When asking for a concession, focus on asking
for something that is of high value to you, but which might be
perceived as of lower value to the other side. Conversely, when
granting a concession, try to give something that is of
comparatively low value to you in order to receive something that
you value more. For instance, in the salary negotiation, the
employee might be willing to work a few more hours per week (offering
more value to the employer) in order to boost their take home pay
(high value to the employee). The most important rule regarding
concessions is that you must never give a concession without getting
one in return. If you don’t obey this rule, the negotiation has now
become a conversation again, and you are on the losing end.
By James A. Baker
Houston, Texas
More Negotiations Training Tips