6 Essential Negotiation Tips for Managers
In almost any manager’s job, the occasions that call for you to negotiate an agreement with others frequently arise. Managers negotiate with peers, subordinates, bosses and certainly with customers and suppliers. It is therefore important for managers to acquire the skill of negotiation, as this would mean success in many aspects of your job.
Commonly, negotiation relates to bargaining over contracts with clients or customers, especially in the area of price or quantity. However, internally in any organization, lots of negotiation goes on too. For instance, managers have to negotiate with peers to reach agreement on allocation of work or completion time for services rendered.
Sometimes, managers have to negotiate with their subordinates, for instance, to work overtime, and certainly very often managers have to negotiate with bosses on various matters including budgets. It would therefore be quite important to note that whether you like it or not, as long as you manage, you would always have to negotiate.
In my experience in negotiation, I’ve learned one valuable lesson that I regard as a turning point in my attitude towards negotiation. A good negotiation must result in a good agreement, that is, both parties must walk off satisfied with what they have agreed upon and have the intention to fulfil.
Too often, when people negotiate, they are only trying to get more dollars or quality, or in some ways achieve a stronger position, even at the expense of the other person losing. However, a win/lose situation can never really be long term because ultimately, the loser might not be able to, or want to, fulfil the agreement. Even if she fulfils the agreement, the desire to maintain a long-term relationship may not be there. So, the basis for any good negotiation is to achieve a WIN/WIN situation.
I suppose almost every manager knows that, but the question remains: “How does one negotiate for a win/win?” “What if the other party only wants to win at my expense?” “How do I deal with the other party if she is difficult and unwilling to compromise?”
Here are six rules which should be adhered to in order to negotiate well:
1. Open Nice
I learnt this phrase from Bob Parker who wrote the book Beyond Negotiation with John Carlisle, both of whom are well known authorities in the field of negotiation.
Bob Parker did an exercise called Red/Blue, also referred to as “Prisoners’ Dilemma.” It is a game which demonstrates whether people display win/win (cooperative) or win/lose (selfishly competitive) orientation in a situation which offers possibilities of both.
The exercise also shows whether people actually behave in accordance with what they originally intended to do during a negotiation, that is, whether people who say they want a win/win actually behave win/win.
One of the key points emerges from the exercises is, no party in a negotiation can really win without cooperation from the other party. The second point is that two parties can reach win/win if they are willing to take a risk and show trust by “opening nice,” that is, to start the negotiation with a cooperative gesture, one that indicates to the other party that one is willing to trust her as well as to take a chance with her. Such a negotiation will have a better chance of resulting in a win/win situation.
This is the concept “opening nice.” In the exercise that I went through, I’m particularly impacted by its significance and how important it is to deal with any party you want to negotiate with in a positive and constructive manner, especially in the beginning.
In a research conducted by Bob Parker where he studied the cultural differences between British and American negotiators, he documented that 15 percent of the British negotiators in his experiment “opened nice,” whilst for the Americans, it is 27 percent. The outcome of the negotiation is only 12 percent for the British and 25 percent for the American in reaching a win/win agreement.
2. Listen and Understand
In a negotiation, it is critical that one should spend sufficient time to gather information about the other party’s position as well as their needs and interests. It is only if one understands the other party that the possibility for a win/win outcome will be heightened. But in order to understand, it is important to listen. Unfortunately, a lot of negotiators tend to do a lot more talking that they should listening.
Listening and understanding is also important because one can get to understand the personality of the other person or persons. If we know and understand the personality with whom we are negotiating with, then we can negotiate far better than if we do not know.
For instance, it would be useful to know how much risk the other person is willing to take, or if the person trusts easily or not. When negotiation takes place in groups, listening and understanding will help us determine who the real decision maker is.
3. Look for Creative Collaboration
Fisher and Ury in Getting to Yes, their best selling book about negotiation, tells the story of how the Egyptian-Israeli peace treaty in Camp David in 1978 was achieved.
The Israeli insisted on keeping Sinai which they conquered during the Six-Day War of 1967, whilst the Egyptian insisted that Sinai must be returned to Egypt. In the heat of their negotiations, they could not reach a compromise. However, when they began to look at their real interest, a creative solution emerged.
The Israeli’s interest was not really to keep Sinai but to keep it from letting the Egyptian armed forces positioned at their border ready to roll into Israel. On the other hand, Egyptian interest is to keep Sinai and to maintain sovereignty. The solution? President Sadat and Prime Minister begin agreed that Sinai is to be returned to Egypt but certain areas to be demilitarized so that security to Israel is assured.
This is an example of creative collaboration. In business, very often, managers are locked into establishing positions rather than to collaboratively achieve each other’s interest. The assumption that when you get something, is often wrong because what you get can be very valuable to you but to the other person could well be nominal. This happens very often in barters and contras.
4. Give the Other Person Face
During a negotiation, one should establish a position of strength and use that strength to gain ground. However, some negotiators used strength to the point of gaining complete dominance over the other party. This may be detrimental in the long run so it is important that these few points be considered:
The other party may agree now but will she keep the agreement?
You can get your staff to agree to do whatever you want because you are operating in a position of strength, but will she fulfil it and is there commitment to it? Hence, in negotiations, agreement is not enough; implementability and commitment is also important.
Is relationship still maintained?
It may be fruitless to win the battle (especially with customers) and then lose the war (losing the customer). For instance, it is all and well to get short term discounts from the supplier because you threatened her continuance as a supplier. However, long term relationship might suffer to an extent that she might neglect the quality of what she might be giving you or when you require something urgent, she may not be willing to go the extra mile for you.
Did you give her “face?”
You may have bargained your way through and got what you wanted, but did the other person get her interest satisfied or at least seem to come out of it “winning” as well? Some people are prepared to give you what you want so long as their ego remains intact and she is not seen to have “lost”. You may push the person to a corner but you still have to give her a way out in order to continue to get her cooperation.
5. Exercise Patience
Too many people go into a negotiation wanting to “get it over and done with” but very often end up in entanglements that they could not get out of. One needs to exercise patience and time is required in order to move smoothly to a conclusion. In this respect, consider two points:
- Take time in the beginning to build an appropriate atmosphere, that is, one that indicates to the other person that you value her relationship and you really don’t like to have to bargain with her but… I find that it is often more fruitful if you “open nice.”
- Be prepared to break off a negotiation if it is moving to a win/lose situation or if emotions are rife. It would be better to let the atmosphere “cool” before going any further.
6. Prepare Yourself with Options
If you go into a negotiation in a situation where you are almost totally dependent on the other party, then you are indeed in a very weak position.
For example, if you want to negotiate price with a hotel for a function but you have only one option and there is no other available hotel, you are in a very weak position indeed. To get strength, create as many options as possible. If one can walk off knowing that you have other options, you would be negotiating from a position of strength.
There are many other points that we can consider in ensuring successful negotiations but the six basic points above should suffice for most managers. What works in external negotiations can very often be applied in internal ones. The name of the game is to Win/Win.