Failed negotiations can lead to business losses, even business closure as was the case with American Axle and Manufacturing in Buffalo, N.Y. The Detroit News reports that American Axle was unable to reach an agreement with its labor union, resulting in a decision to close the plant at the end of the current contract. It is clear that in this situation, the outcome of the negotiations was lose-lose.
How do negotiations fail? There are many reasons that the parties cannot reach agreement. In the article “Six Ways to Blow a Negotiation” Lisa Yoon lists the following reasons:
- Poor planning
- Poor/misguided assumptions
- Failure to listen
- Being culturally insensitive
- Failure to establish the bases of negotiation
- Accepting an offer too quickly
To avoid failed negotiations, you will need to pay attention to these factors. Michael Crom, writing in USA Today, gives “5 tips help you meet with prospective clients.” He emphasizes the following:
- Preparation and planning
- Building rapport with the other party
- Building your credibility
You will notice that planning is key to avoiding failure. Planning includes forecasting, that is, thinking about what the other party will want and how you will respond.
The point of negotiation is to find common ground and reach an agreement to satisfy all parties involved. The inability to connect with the other party by listening to their concerns and finding commonality will no doubt lead to failure.