In business, it would be difficult if not impossible to achieve a notable measure of success without having inked a significant number of agreements with other parties—most appreciably with conflicts inherent in the process having been pleasingly overcome for all involved. Whether negotiating a sale with an existing customer or prospective new account, contracts with vendors, deal with the company and industry stakeholders, an M&A situation, the salary of a new hire or any other, negotiating is a fundamental driver of a company’s prosperity. The better the company personnel are at negotiating, the more successful it will be. It’s that simple. Of course, negotiation is a learned skill that one must first master and then continue to hone—one involving psychological intuition, emotional control, cognitive agility and even creativity combined with practical and tactical skill.
I reached out to senior-level international negotiation consultant Ruth Schlossman for some fresh tips on how fast trackers in particular can facilitate strategic agreements more effortlessly and efficiently. And deliver Schlossman did, which was no surprise given her lofty pedigree in the negotiation space, perhaps best exemplified by her newly-released title “Negotiate with Ease”—a book billed as one “guaranteed” to help readers negotiate successfully.
Shlossman kindly offered up these four key negotiation truths and strategies that, she asserts, can help propel fast growth-minded businesses.
1. Facts over emotions: Negotiate based on actualities
While it seems elementary, this idea is worth a foundational mention as a shocking number of professionals approach the negotiation table wildly under-prepared. Before entering into any negotiation, you need to know your facts and be ready, willing and able to present them well. For example, if you are negotiating about a trade, you should know your costs including engineer services, raw material fluctuations, delivery options, consignment costs and currency concerns. Identify the core issues and how they will affect the various outcome of the bargain. Before reaching an agreement, make sure you understand what it constitutes and the value it brings to you. Failure to understand what you are agreeing to, from every viewpoint, can result in a costly concession that you may never have an opportunity to change.
Take time to understand the other person or company as much as possible. Also understand the issue that you will be negotiating, and what each of the parties expects. For instance, if you are conferring to buy a new building, several issues are worth considering. The length of time the property has been on sale, the number of buildings on sale in the area and the possibility of zoning changes. As you think of such issues, you will identify which can serve as leverage to gain the most out of the agreement.
2. Make a trade with every concession
From the start, you should consider and include every possibility of the negotiated agreement. Think about each various facet of the deal upfront and consider the risks of making costly concessions related to any or all. One method that is used in the Chinese culture is where negotiations are conducted with a long-term mind-set. You need to consider factors like the ten-year plan of the other company and what would happen if technology changes or demand doubles. Think of what would happen in case of raw material shortages or if the company gets acquired by another. Considering such “what if” scenarios can save you in terms of money, time and the stress of negotiating.
It’s also prudent to look for any clues about the other person’s underlying interest, which will better enable you to negotiate on what matters to that person. For instance, timing may be the most important factor for the other party when you are considering a merger and acquisition. Perhaps upfront costs may be their deciding factor when entering into an investment. For you to be a solid negotiator, you need to take the approach of a detective and seek to identify the interests of the other party to parlay.
3. Avoid being transactional—see the bigger picture
After identifying the core issues in a negotiation, develop the best possible outcome—optimally equitably for all involved. Also known as the Best Agreement to Make (BAM), this should be your opening offer. At the same time, think about your target, possible final offer and what you may use as a “Plan B.” Consider the various possible negotiation’s outcomes, including potential future problems related to each. A successful result is one that’s pegged on the identification and even anticipation of potential problems, allowing you to take a stance that benefits you the most.
4. Align with stakeholder interests
In any negotiation, it’s imperative to identify your company’s true interest and negotiate to align that strategic interest with deal terms. When negotiating with new clients or suppliers, the stakes of a fast track company are usually higher. How a negotiated agreement begins determines the way forward, even for the decades to come. Since it is often more difficult to change an agreement than to create one, it is also important to start on a high note. The moment you erroneously say “yes” in a negotiation, keep in mind it can be both costly and painful to turn that “yes” to a “no” or back down later on. So, proffer affirmations judiciously.
The most important thing for your company could be a longer contract, joint PR, training, a new way of tracking orders or teaming up to improve engineering services. Whatever the interests are, ensure you are speaking on behalf of your company’s stakeholders. This could include members of the marketing team, engineering services, accounts payables, operation or the core leadership team. Think of the hidden costs in the terms being negotiated to avoid entering into an agreement that will end up being costly in the long run.
Fast trackers would do well to read, and perhaps re-read, these tips from Shlossman slowly—but implement them quickly—to negotiate more confidently, skillfully and shrewdly and, in turn, realize (and sustain) rapid advancement of your own.
By Merilee Kern, MBA