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By James A. Baker
Negotiations Training Institute
April 2009Everywhere I go to speak on the topic of
negotiations, I hear the same thing from corporate executives: “My
people don’t spend enough time preparing before negotiating.” I
wholeheartedly agree. For some reason, people have the idea that
negotiating is all about things like charm or the force of
personality or the killer instinct. These people go into a
negotiation with a brief outline of what they hope to achieve, and
then count on their interpersonal skills or the perceived strength
of their position to drive the decision in their direction.
Unfortunately, this works just often enough to encourage these
people to keep repeating this pattern, even though they generally
leave money on the table every time without realizing it! It isn’t
the most gifted negotiators, or even the most experienced, who are
the most successful. The most successful negotiators, day in and day
out, are the ones who take the time to be the best prepared.
Believe me, the real negotiating opportunities are won or lost
before you ever sit down at the negotiating table. It is during the
preparation phase that you set your goals, define your expectations,
do your research and construct your strategy. Instead of going in on
smile and a prayer and hoping for the best, you must have a plan
that will help you respond constructively to any development. Here
are a few important issues to address during the preparation phase:
1. Define your negotiation boundaries. This may be the most
important single area of negotiation preparation, and it holds the
key to success for many of the most effective negotiators. This
simply refers to settling in your own mind what is your Wish (the
wildest dreams outcome), your Desire (what you think you can
reasonably expect to achieve), and your Bottom Line (anything less
than this and it would be better to walk away). You also need to
already have a pretty good idea of what alternative you would fall
back on if you can’t negotiate an agreement (sometimes called a
BATNA for Best Alternative to Negotiated Agreement), as well as
having an understanding of your WATNA (the Worst Alternative, or
worst case scenario, to a Negotiated Agreement). Having all of these
issues settled ahead of time will give you much more confidence and
clarity once you sit down at the table.
2. Information is Power. Invest as much time and effort as possible
to obtain as much information as you can about anything pertaining
to the negotiation. Collect as much market data as you can find,
learn whatever you can about similar negotiations in your area or
your industry. Get background information about the other company or
organization. Be the expert on anything that you think might come up
during the conversation. This means that you have to start by
brainstorming to think of everything that might come up! Don’t be
the one caught staring at your legal pad because you don’t have a
good answer to a very simple – and important – question. And don’t
rely on assumptions! Verify every assumption you are relying on, and
make sure it is a fact -- not an opinion. I can’t tell you how often
this has paid off for me when I did it – or cost me dearly when I
didn’t.
3. If possible, build a profile of the people who will be sitting
across the table from you. If this is a high-powered corporate
negotiation, this might be compiled into a formal dossier. However,
even if it is only a real estate transaction between neighbors, try
to make yourself aware of the behavioral tendencies and interaction
styles of those you will be working with. The more you know about
them, the better you can match your style and pace with theirs, and
avoid accidentally creating extra confusion and distractions because
you adopted a style that doesn’t mesh with theirs.
4. Identify interests; avoid positions. Interests have to do with
the underlying needs each side has, such as a need to expand a
parking area, for instance. A position is the one solution that you
might think is the best and only solution to the problem – like
wanting to tear down a historic building to make room for more cars.
Taking a stand on a position tends to stop the process of finding
real solutions. During the preparation process, try to identify both
your interests and those you suspect are motivating your opposite
number. Keep the interests front and center at all times.
5. Don't forget, this isn't about winning; it is about Win-Winning!
Even during the preparation phase, be looking for opportunities to
offer something of value to the other side. What concessions can you
give in exchange for the concessions you are requesting? Would they
be of lower value to you than what you expect to receive? Would they
be of higher value to the other side than what you are asking them
to give? That is how Win-Win negotiation works best.
As you can see, all this preparation will take a lot of time and
energy. However, I promise you that it will pay for itself many
times over once you sit down at the table. There is an old proverb
that says, "Well begun is half done." When it comes to negotiating,
great preparation will carry you more than half way to success; it
will take you all the way.
By James A. Baker
Houston, Texas More Negotiations
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