Tag archive: negotiations
Don't Be Greedy!
“Aim higher to do better” Revisited
What is a Bogey?
Negotiation = Entrepreneurship?
Patience in negotiations
Patience really is a virtue
“All you need is a little patience.” We’ve heard that for years, in church sermons, from our teachers, our parents, even from pop songs. As it turns out, patience is all you need if you want to win at negotiation. Patience might be the number one attribute of an effective negotiator.
Patience equals time, and more time may mean better negotiation outcomes. Patience is the supertactic of negotiations precisely because it gives you the power of time. You need time to understand what exactly is being offered and what the risks are. With more time, you can discover strengths and weaknesses. The bottom line is that patience brings more information to the table.
Patience (and its cousins persistence and determination) make up for inadequate resources. These are some things that patience accomplishes:
- Provides more information
- Allows you to discover the other party’s needs and wants
- Lowers other party’s expectations
- Leads to concessions
- Forces realistic assessments
- Lets problems rise to the surface
- May change leadership or people involved in the negotiation
With patience, parties will resolve their differences. It’s like John Quincy Adams said: “Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.”
Patience may be hard to come by in today’s fast-paced world. You may have to work at being patient, not just in negotiation but in life. Some tips to achieve patience include: figuring out why your triggers are, reminding yourself that things take time, and remembering what matters.
Rules of negotiations
Are there rules for effective negotiations?
According to Anthony Tjan, founder of Cue Ball, a venture equity bill, there are four main rules for effective negotiations. He writes about them at the Harvard Business School blog. These are his four rules:
- Do your homework
- Don’t negotiate against yourself
- Get around stalemates
- Let the other party walk away
These are all very good tips and we have discussed some of them here as well. According to Tjan, the golden rule is the last one, willingness to allow the opposing party to walk away. Essentially, Tjan is saying one should stick to one’s guns. One should be straightforward with what one is willing to do and not to do.
Dr. Chester Karrass discussed 14 rules for winning in negotiation in his book: In Business as in Life—You Don’t Get What You Deserve, You Get What You Negotiate.
Here they are:
- Pick the best place and time to negotiate
- Have a “plan b” if the negotiation breaks down
- Be stingy with consessions and leave room to negotiate
- Buyers shouldn’t give seller quick counteroffers to their asking price
- Don’t say yes too quickly
- Buyers should always try to get cost breakdowns and sellers should not give them
- Don’t make the first major concession
- Watch concessions as deadline approaches
- Shut up
- Be skeptical
- Stop hoping for the best
- Watch out for funny money
- Know how to compromise
- You can always find a better deal for both parties
Are there rules you always abide by when you negotiate?
Negotiations involve change: price increase, scope of work modification, request for discount, union demands, reduction in volume, change supplier, design change, people changes.
Recession = Change = Pressure
During recessionary times negotiating change is more difficult. Both sides have more pressures and this adds to the intensity of the negotiation. TIP: Follow two important Karrass negotiating principals. Preconditioning and Acceptance Time. When you do, you will find your ‘change negotiations’ will be more productive, and you’ll be better able to preserve the relationship you’ve established with the other side.
Preconditioning — No One Likes Surprises!
As you prepare for your ‘change negotiation’ start making the other side aware of your thought process and the conditions that are causing the change. Keep the other side aware of changing market conditions impacting this decision. Preconditioning makes it easier for the other side to accept your position. They understand what is driving it and understand that you have taken time to analyze a variety of options.
Acceptance time — Allow time for preconditioning to do its work.
Allow some time between when your preconditioning messages are sent to the other side and the time you need to sit down to negotiate. If the other side hears about the need for change (price increase, downsizing, cancel a project) on the day of the negotiation, there is going to be increased resentment and resistance. You may trigger a ‘knee-jerk’ reaction that could damage both sides.
The changes you are proposing probably will impact others. The other side needs time to do their own internal preconditioning. During the process of negotiating changes, use every conversation and every meeting as an opportunity to reinforce the importance of mutual interests in your relationship.
You’ve probably been told not to brag. But in preconditioning bragging is important. Consider implementing an on-going preconditioning process. This really helps when you enter a difficult negotiation. You do this by documenting.
Document any time you do something extra that benefits the other side. Such as: provide extra help when they need it; perform beyond what was called for in the Agreement; bail them out when they make a mistake or something breaks; provide extra ordinary service; give them additional goods or services at no extra cost; lend them some extra people to help out on a project. Brag a little about these things that you do for them. Document it in a short note or email. “Glad I could help!”
Maintain your list of these ‘extras’ you have provided them and don’t be afraid to use it during your negotiation. Their acknowledgment of your extra effort helps.