To refresh, Negotiating is the transition point in deal making, somewhere between, ?Dearly beloved?? and ?I do.? A great ceremony will not make a great marriage out of a bad relationship. Just as Negotiations cannot make a bad deal into a good one. However, the Art of Negotiations can prevent you from losing a deal over the details. Details that you should have been aware of, details you should have been prepared to deal with, details you could control and manipulate. Details that could lose you a deal that you should have been able to close. In other words, a bad negotiator could talk a starving person into not accepting a loaf of bread out of spite.
Every process has rules and steps. Rules are the governing principles. Steps are the events as they occur in a sequence. Rules govern life. Steps govern each day. There are only Ten Commandments, but thousands of laws. I feel there are a few essential rules to negotiations, but numerous steps. This is my subjective list of the key rules to negotiations. Another person might come up with 50 rules. I guess the difference is if you are writing an article, or writing a book. I have only 10, which I guess means I am writing a short article. Alternatively, being a retired Marine, maybe 10 is as high as I can count (without taking off my shoes).
- Rule #1: The other person will continue to negotiate as long as they feel there is something to be gained, even if that amount is not in proportion to what they risk losing. This is especially true if the ?buyer? believes the ?seller? has no other options and therefore risks nothing they cannot replace elsewhere if lost with you.
- Rule #2: Never indicate that you will not negotiate, if you will. On announcing your willingness to change your mind, you have also admitted defeat and might as well meet the demands of the other person. You cannot lie if you want to negotiate successfully. Be honest, be consistent, and be truthful. There is a world of difference between being caught in a lie and being flexible. Really, in this one, liars do lose for once. (Dad was right. Honesty is the best policy.)
- Rule #3: What is important to you only matters to you. If you want to negotiate, and negotiate with success, shut up and listen to the wants and needs of the other person. Understand what is important to the other person. Discover what you have the other person wants. It is the best way to insure you ultimately get what you want.
- Rule #4: Negotiations end when one party has decided they have gone as far as they chose to go and the other party does not sense the change or concede the point. This is the point where negotiations become confrontational and therefore cease to be negotiations.
- Rule #5: Negotiations can only be considered a failure when a good deal is lost. When a bad deal is lost, the fault lies long before the ?chalk talk?. Never get to the point of negotiations with a bad deal. You just wasted cycles that could have been spent on a good deal. In the long term, bad deals hurt your business, even if successfully negotiated.
- Rule #6: If you repeat the same argument, the same way, more than once, you are not negotiating. You are nagging, boring, tedious, and about to lose a deal. Sort of the grown up version of, ?I know you are, but what am I!? If you are stuck on the same point, stop! Digress, go back to the last point of consensus, and try again.
- Rule #7: Great negotiators are in control of the situation, they do not take charge. Control is the art of anticipation and prior preparation for a possible event based on that informed anticipation. This is followed with an artful application of a prepared course of action in response to an anticipated potential adverse course of action by the other negotiator. Managed in a way to make the other person feel that the ultimate decision was theirs, even when it was yours. That is taking control of a situation. Taking charge, on the other hand, is an aggressive (dare we say ?knuckle dragging Neanderthal?) act of denying another person the right to make impact in a decision, to refute their beliefs, to deny their enlightened self-interest. Forgetting, that this is, in essence, their decision to make. After all, if you were really in charge, you would not need to negotiate. If they do not have to listen to you, if they are not indentured, you cannot effectively assume taking charge without risking the deal. In short, if I do not have to put up with you, and you make it worth their while to prove it, they will prove it to you by costing you money.
- Rule #8: In negotiations, you only lose when what you gave up exceeds what you were seeking to gain. Alternatively, if what you gained, is less than you give up, you may have won the negotiations, but lost the deal. In other words, a good negotiator constantly re-evaluates the deal. At some point, going home and having your supper makes more sense than closing a bad deal.
- Rule #9: The more you talk, the less likely you will win the negotiations. Negotiation is the art of meeting the essential goals of your ?opponent? without giving up any more than absolutely required. This requires listening. In a two-way communication, if one person is talking, the other is listening. If you are talking, you cannot be listening. If you are talking, the one who is listening is? That?s right, the winner! If that is not you, this is not a good thing. The slogan Madison Avenue would have here would be, ?Shut up and be a winner!? To win negotiations listen for the “deal makers” and the “deal breakers”.
- Rule #10: In flight school, they taught us, ?Never try and save a bad approach. Wave off and try again.? The theory is that as long as you have gas, you can try a new approach to the runway. However, the laws of physics only allow one uncontrolled impact with the earth per pilot, per plane. In negotiations, you can also ?try again.? However, you can only ?crash? once. In our world, time is ?gas?. Never waste it, but never force an issue if there is still enough ?gas? to negotiate one more time. (I guess that means negotiators have a lot of ?gas?. But they also have a lot of fees and/or closed requisitions).
Negotiation Rules are merely common sense statements of how to deal with people based on how you like people to deal with you. A good person, dealing with a good person, trying to close a reasonable gap in a deal that has benefits for both parties is the optimum situation that rarely occurs in business. Usually the differences are as much a matter of perception as a matter of fact. The issues arise as much from suspicion of wrongdoing, as an actual wrong done. That is why the act of negotiation begins with the first handshake (even when that “handshake” is a voice mail or e-mail).
The next article will break down the process into steps. But I felt the governing rules needed to be reviewed before the individual steps. Like my ?Old Dad? taught me many years ago, ?Never play a game till you have learned the rules.? Now, if he had bothered to tell me that BEFORE I started playing poker, I just might have the Porsche I always wanted. But the first and foremost step in negotiations is the easiest and most natural, and yet the hardest for most people (especially salespeople).
- Step #1: Establish trust and respect on the first contact. It is too late by the second contact.
The first step in establishing your success in future negotiations with anyone, anyone, is to first establish a sense of mutual trust and respect. How you do that can be easy, if you are in essence a trust worthy and respectful person. But how do you communicate this fact? Next article…
Have a great day recruiting!