Talk your way to an advantage

Natalie Reynolds, founder of negotiation experts AdvantageSPRING, offers advice for getting what you want when trying to strike an agreement with a counterparty We negotiate every day, in different ways and with different people. It is a fundamental requirement in reaching agreement, resolving disputes and succeeding in business. We might negotiate on salaries, contract terms, HR matters, equity and investment, restructures or acquisitions. We might negotiate for ourselves, our employer or a client. The reality is that most people will negotiate every single day. Another reality is that many people dislike the process, will actively avoid it or will make some of the common negotiation mistakes highlighted in my previous two articles, The art of the appeal and Crossing continents to clinch the deal. The following DEALS approach provides the key steps you should take every time you plan for and carry out a negotiation. Discover as much as you can about the issue up for discussion. Before you get anywhere near the negotiation table, do your research, know the facts, understand the market or look at what has been agreed previously. It is essential that you use creativity with this process as we often just think about the obvious issues. Perhaps the key to unlocking this deal sits in an area we just hadn’t considered. Do you know who will be involved? Do you know the timescales? Are there industry baselines you can look at? Also discover what type of negotiation it is. Is it value claim (short term, transactional in nature or win/lose) or value create (longer term, more complex or win/win)? Understanding this will help develop your behavioural strategy and what your tactics might be. Establish some boundaries and priorities. Determine what your key priorities are as well as what theirs might be. To create a win/win outcome, you need to understand what success looks like for them also. Reciprocity means making the other party feel as if they have won, and if that happens, they are more likely to help you win too. You also need to establish your breakpoint or walkaway point. This is the worst-case outcome for you. Once you have it, stick to it. In the heat of a negotiation, we can agree to things we would not have if we were calmer. The next thing is to establish what their breakpoint might be. The aim of the exercise will be to finish as close to their breakpoint as possible, as that way you are maximising the available negotiation zone. Ask for slightly more than you need to give yourself wriggle room to explore what they might be willing to give you. This is about making sure you set out your proposals in the most effective way. When you make a proposal, always open ambitiously but credibly. If you can, try and make the first move in the negotiation. Anchoring is a phenomenon from the world of psychology that means we are often overly influenced by the first number put on the table, meaning you are likely to finish closer to that figure. Don’t worry if you don’t manage to go first though, just remember to not reinforce their proposal by going on and on about it. Instead, recognise that the best way to beat their opening proposal is to make one of your own. The more you talk about what you want and why, the more likely you are to get it. It is also essential that you plan several moves in advance and again, be creative. Think of lots of different angles to try to reach an agreement, and don’t be afraid to make lots of suggestions. Lead the negotiations. Be confident. Take a deep breath and speak calmly and professionally. Don’t allow your emotions to control you. A simple tip is to remember that even the most confident of people will often feel awkward and nervous when negotiating – they are probably just doing a better job of hiding it. If you are negotiating as part of a team, taking the lead also means keeping discipline within the team. Assign roles, be clear on who does what and when. Seal the deal in the right way. Get it in writing as soon as you can. One of the most dangerous phases in a negotiation is the “post-deal, pre-paperwork” phase. This is the period after the deal has been agreed with a handshake or verbal agreement, but before the ink is on the contract. This is the phase during which your counterparty, if they have any doubts about the deal they have just agreed, will come back and try to “nibble” a bit more for themselves or their client, try to alter terms they are unhappy with, or walk away from the agreement in that form altogether. To limit the risk of this happening, be magnanimous rather than triumphalist if you get a great outcome, in order to make your counterparty feel satisfied with their result. Agreements are stronger if each side feels as if it is winning. Natalie Reynolds is the founder of negotiation experts AdvatageSPRING. Her book We Have a Deal: How to negotiate with intelligence, flexibility and power is published by Icon Books and available to buy at Amazon and all good bookshops. Click here to find out more about advantageSPRING’s programmes.