Negotiating

Negotiating is one of the most misunderstood but arguably the most important tools to have in life. Every exchange involves some level of negotiation, from determining what clothes to wear in the morning to convincing a friend to see your point of view or do something with you. Seeings it's importance to everyday life, it may be hard to understand why it isn't considered a much more important tool for communication, but the truth is you don't have to be a great negotiator to get through day to day life. Being good enough works for most, and because few have seen a great negotiator in action, fewer still understand what can be gained from great negotiating. Discussed below are some of the reasons why negotiating is important, as well as a process for negotiating effectively. Finally, a pdf is attached that provides a game for learning the benefits of great negotiation.

Why is negotiation so important?

Short term gain results in long term losses: Too often people view negotiations as a one-time process. This mindset encourages people to create the best solution for themselves without considering the implications for the other side. As such, because people don't believe they will be working with the group again, they create scenarios that when they do negotiate in the future (as often happens), they no longer can negotiate with goodwill intact. For example, some people will make deals look better than they are in order to maximize profit during this deal, and the destruction of credibility will hinder the creation of a good deal in the next negotiation.

Tensions between self interest and group interest: This is a very real and very problematic situation for many. In the short term, self interest wants to take over, but in the long term, group interests is always the way to go because of the credibility, trust, and goodwill that develops.

Trust is hard to build but easy to break: Because of this truth, the maxim of always tell the truth is recommended. Although the truth can hurt you in the short term, in the eyes of others you will be regarded as courageous, honest, and trustworthy, which will encourage people to work with you in the future. They know you won't try to hide things, which results in mutual respect and improve your communication and effectiveness. This, though, can be taken away in a heartbeat, so guard your reputation fiercely.

Reciprocity is important for building a relationship: Thinking win-win is the ideal, and following through or creating those scenarios allows a relationship to develop. By doing others favors, and asking for favors in return, trust is slowly being built. With each positive interaction, a relationship develops with goodwill that can be used when conflicts or problems can (and usually will) develop.

Positive coalitions act as agents for change: By developing strong, trusting, and positive relationships with others, you can coordinate efforts to create mutually beneficial results that would be impossible to achieve by acting independently. No man is an island, nor is any organization. As such, develop great relationships with other organizations to create long lasting and high impact change.

What is a successful negotiation process?

1. Come up with any "better than alternatives" - This is for understanding where the other side is coming from. How strong your position can be in the negotiation depends on the alternatives that the other party has. If they have great alternatives, you may have to tip the scale in favor of that organization to 'woo' them. On the other hand, if the other organization has an alternative of declaring bankruptcy, for example, you are operating from a position of strength and can dictate more of how the exchange will occur. While you definitely don't want to take advantage of this situation (see reasons above), it allows you to effectively argue for a certain outcome.
2. Have something that satisfies all parties interests - The number one way for people to say 'yes' is to know that they are getting what they want from the transaction. If anyone is left out, or feels left out, they could sabotage the whole deal which will put you back at square one. As such, offer to include all who may be affected by your deal, even if they may decline because that is better than having a deal implode because of the outside party.
3. No waste, best of many options - This is a lot like Econ 101 in that by leaving certain things on the table, they are being put to no good use and are a waste of resources. By working through all the details, you can maximize the benefits for all involved.
4. Use objective criteria - Many decisions and arguments are based on different sets of data gathered, and the easiest way to undermine your position is to use biased data. Finding statistics from a trusted third party who can't 'fudge' the numbers one way or another makes your arguments that much more compelling.
5. Well-planned commitment - Not only is making a decision important, but you also have to follow through on your commitments. By outlining what each party will do in the beginning and sticking to that commitment throughout will develop mutual trust and make interactions in the future much easier.
6. Good, two-way communication - Not only what but how people say things is very important to reaching an agreement. Having good communication, where one side isn't dominating the process, results in the feeling of a level playing field that promotes trust and respect between the parties, no matter what discrepancies exist.
7. Process improves relationship - The goal of any negotiation is two fold: to get what you want from the transaction and to build a relationship. By following the steps previously highlighted, you are well on your way to improving the relationship, which will bring much better deals and make working together more effective and enjoyable.

Conclusion

Negotiation isn't something someone either has or doesn't have, it is something that takes time and dedication to develop. While some may have a natural propensity for it, anyone can become at least competent at creating great deals. The easiest way to learn negotiation is through practice, and lots of it! Appended below is a worksheet that details a negotiation game anyone can play, and another easy way to work on negotiation skills is to play board games with lots of tabletalk. Good luck and have fun!

Resources

The X-Y Negotiation Game