Sunday, July 24, 2011

4 Keys To Successful Negotiating In Work, Life

To live life is to negotiate. If you're married, you negotiate daily with your spouse. It might be over what to have for dinner or where to go on vacation. If you have children, you certainly negotiate with them. I'm constantly bargaining over curfews, gas money, and the definition of a clean room. (Are hospital corners really too much to ask?)

Right now, we have the National Football League (NFL) lockout as the millionaire owners and millionaire players negotiate over how the billion dollar revenue pie is going to be sliced. We have a similar situation with the National Basketball Association (NBA), where the owners have also locked out their players. It seems everyone is negotiating.

I've watched with interest as President Obama and Congress have haggled over what each side must give up to reach an agreement that would pave the way for raising the federal debt ceiling. In this negotiation, each side seems to be playing a game of chicken, unwilling to give on specific items. The Republicans won't agree to raising taxes for anyone and the Democrats are refusing to give up any entitlements. But you can see what happens when there is an unwillingness to compromise in a negotiation — progress is stalled.

In business, what constitutes a successful negotiation? Is it squeezing the very last concession out of a vendor or a partner? I don't think so. Many times people are proud of how, when everyone thought they'd rung the very last dime out of a deal, they've gotten a vendor to cut the price even more.

Let me be clear, I'm all for getting a good price. But I'm also wary about pushing vendors too far. Let's face it, they need to make a buck, too. If you push them too far, they're going to be less willing to provide service after the sale or they're going to look for other ways to turn a profit.

It may be when the piece of equipment breaks down and you have to make an emergency call for service. Is the vendor going to be willing to drop everything for that guy who left him with only the slimmest of margins? And if the vendor does drop everything to bail you out, will you pay through the teeth for the service? I think it's more likely you will get squeezed by a vendor whom you've put through the ringer yourself.

The best negotiation is one in which both parties are satisfied with the outcome. We recently negotiated a deal for a new piece of software that is critical to our operations. We pushed very hard on price because we had a cheaper alternative available to us, but in the end we wanted the software we purchased because it better fit our needs.

During the negotiations, we learned that the vendor had not deployed the software in our area and wanted a customer here. We realized that the vendor might take a lesser margin because it felt that it could better make future sales in this region if an area company had successfully deployed the software. So we got a good price with good terms and the vendor got a toehold in a market that it had not previously penetrated. We both felt good about the outcome.

There are a few keys to good negotiation, and being tougher or meaner than those on the other side of the table isn't one of them.

The first key to good negotiation is listening. You need to listen to what the other side is saying and be in tune to what they're not saying. Ask questions to discover what items are really important to them. Look for areas that they feel are important but that you'd willingly concede. Being quiet long enough to determine what the other side is really after can pay big dividends in a negotiation.

Determine your desired outcome in the beginning. You need to approach every negotiation with an end goal in mind. Too often, one side can become distracted and get off track in the negotiation. In the end, they end up with a deal that they really don't want. Having an end goal before beginning the negotiation helps keep you on the right track.

Always remain flexible. While knowing your desired outcome is important, so is being flexible enough to adjust to the twists and turns all negotiations take. You don't want to blindly chase your goal and miss a deal that's even better than what you hoped for. Many times that thing you were afraid to ask for is offered to you. Don't miss it because you have tunnel vision.

Try to make it a win-win. The best deals are when both parties go home happy. And this can be achieved more often than you might think. Make sure you're looking for the positives in the deal, not only for yourself, but for the other side as well. And don't be afraid to remind them why this is a good deal for them. The person who feels like he has to show he won the negotiation is less likely to reach a successful outcome.

Life is a series of negotiations. Making sure you take the right approach greatly increases your chances for success. Keep these four keys in mind and see how it turns out.

Thanks to Dan Oswald / Blogs HR Hero


No comments: