The five key questions to ask
By Harry Mills
"Never go into a negotiation without knowing what you want to achieve and how you intend to accomplish it."
In a negotiation your strategy is your game plan or basic approach.
Effective negotiators have to be "situational" negotiators; they are prepared to adapt their strategy to fit the situation. When assessing what approach to use, they consider five key questions:
- Is there going to be a continuing relationship?
In a one-off deal where you never expect to meet the other side again, the incentives to be open and behave reasonably are less than in a situation where you know you have to, or want to, do business with the other party again.
Most people, for example, are more open and reasonable when selling a car to a friend or relation than they are when selling the same care to a stranger whom they never expect to meet again.
Even the most committed win-win collaborative negotiators turn into hard competitive bargainers when they become tourists in the markets of Hong Kong or Mexico.
- What are the relative strengths of the parties?
The difference in strength between the two parties, or the balance of power as some negotiators call it, can strongly influence the approach.
If Barrington Industries for example, happen to be the sole supplier of a basic component essential to the success of your business, then they are in a strong position to adopt a tough line in any negotiations with you. It is, therefore, in your interests to cultivate an harmonious working relationship.
If, on the other hand, you can choose from numerous suppliers, then you are in a much stronger position and can afford to adopt a much more competitive approach.
- How much trust exists?
A win-win strategy requires a high degree of trust and openness. This usually takes time.
At times you will also have to negotiate with people who have proven themselves untrustworthy. With untrustworthy or unreliable clients you have little choice but to adopt a tougher, less open, approach.
- What do we know about the personality and style of the other side?
Like it or not, there are negotiators who simply work for their own interests, view negotiation as a power struggle and care little for the needs of the other side. They are ruthlessly competitive, abrasive, are essentially untrusting and are prepared to win at any cost. With such negotiators, your approach has to be more competitive and less reliant on trust than it is with a negotiator who uses a cooperative style.
Highly cooperative negotiators, on the other hand, are sensitive to the needs of the other side. They emphasize problem solving, aim to maximize joint gains; focus on common interests, not differences; are non-confrontational, non-argumentative, and apply standards of "fairness", "commonsense" and "reasonableness".
Cooperative negotiators often worry that they risk being exploited by competitive opponents. While this sometimes happens, you quickly learn to adjust your style. Similarly, competitive negotiators who lose business because of their aggressive style soon learn to adapt.
- How much time is available?
Time is a key strategic variable. Negotiators under time pressure lower their aspirations and concede more. The side with the time advantage can therefore adopt a tougher, more competitive approach.
While this can result in a short-term victory, the long term consequences can be costly. Highly competitive tactics undermine the trust and goodwill needed to build a long-term working relationship which needs time and nurturing to develop.
In short, to succeed as a negotiator you have to be flexible. Your strategy depends on the circumstances and issues of the negotiation. Nevertheless, don't forget that your goal should be to resolve the conflict in a way that leaves both sides satisfied and committed.