When negotiating with others in your organization, leave room for contingencies, under-estimates and problems in your opening offer. Be certain that these contingencies can be fully explained and defended. Then, as you move to agreement, you will have room to offer further concessions as necessary.
Americans, as a rule, bargain less often in their daily lives than their counterparts in other cultures. They are uncomfortable making low offers when they buy and hesitant to build higher margins into proposals. These tendencies, in my opinion, hamper their capacity to negotiate effectively in business dealings, and serve to make workplace bargaining even more difficult.
Americans prefer to get to the point. Even in buying and selling, they leave too little room. They don’t like the give and take of bargaining, nor do they welcome the talk and repetition that is so much a part of the process. The conventional adage, “Time is money,” appears to drive Americans more than businesspeople from other cultures. Yet, for negotiators everywhere, the reality is, the more time one gives to the process, the more will be learned and gained. For negotiators, “Time is money,” means “Go slow.” Where you start and how you give in is crucial to how well you will do. I have accumulated data on the results of practice negotiations among my seminar attendees. I consistently found that executives who started higher and made concessions in smaller increments did better.
The practical implications of these findings are clear especially for professional buyers and sellers in external negotiations. If you are a buyer, start quite low and be ready to defend that position. As a seller leave as much room as you can defend in your asking price. In both cases, ample room to negotiate is generally the key to better outcome in commercial dealings.
For those who deal internally with others in their organization to resolve workplace differences these admonishments to leave lots of room would not work well. Leaving a lot of room to negotiate could jeopardize hard-won relationships and result in the loss of long-term credibility. Working together cooperatively might later prove more difficult than before.
For internal negotiators, the rule is, leave enough room to cover contingencies and problems that may be expected. Be prepared to defend these matters in full detail. Leave room also for waste, inefficiencies and mistakes that require correction. Be ready to negotiate and defend each point with all the legitimacy you can muster. Some modest room to bargain is called for in relationship-based internal negotiations. Not to do so will leave you in an inflexible, take-it-or-leave-it position that has obvious problems of its own.
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