While only some of us formally negotiate in our working lives, all of us create agreements with colleagues, customers, family and friends all the time. So understanding how the top negotiators make agreements that truly work for everyone is a skill that will enhance your personal and professional relationships.
Based on my experience as an executive negotiation coach, here are my seven steps for successful agreements.
In today’s business world, we need to think long term. And if you are not thinking hard about how you can create more value for the other party, you are unlikely to reach an agreement that will generate long-term value for all.
Collaborative negotiators plan to reach agreements that result in the sum being greater than the parts. This is genuinely possible when you think collaboratively and plan to use the resources of both parties to create a mutually beneficial agreement.
If you plan win/lose negotiations, on the other hand, it’s highly likely that in the long term you will be the loser.
Understand who it is you are negotiating with
It’s critical to understand the person you are negotiating with, both from a practical perspective and in regard to their personality.
You need to take a walk in their shoes and see the issue from their point of view – this will help you see what you have to offer that will create value for them, and what they have that can help you in your objectives.
Understanding their personal preferences, and the way they like to do things, gives you a head start in creating an environment in which you can best collaborate.
The critical factor in negotiation is knowing what variables you can use, or what terms you can amend on the other side, to create value. The more creative you can be in finding these variables, the more likely you will be to reach a real win-win agreement.
Seek first to understand, then be understood
Before you put any agreement together, make sure you really understand the other party’s needs and wants. Take time to question carefully, and listen actively, so you are sure you really know what the other party is looking for. Make suggestions, pose ideas, and gauge their responses first, so by the time you offer a deal, you know you have a mutually beneficial agreement.
Make sure your proposal has bargaining room
If you really understand the other person, and you are thinking creatively about variables, you will be able to put together an agreement that goes way beyond price. Make sure, however, that you have room to add and take away variables, so you can craft an agreement with the other party that they really buy into.
“If You… Then I”
This phrase sums up collaborative negotiation and is the key to bargaining. When you are trading variables keep it conditional by using “If you (....do this for me/ agree to this term) then I (... will do this for you/will agree to this term). It’s a simple phrase that pays huge dividends in getting the best agreements.
Aim for yes
Negotiation doesn’t need to be a battle, so work hard to make it a collaborative process and you’ll get more from it.