How to develop powerful negotiation skills
People often associate negotiations with corporate boardrooms or diplomats working on conflict resolution, but everybody negotiates all the time. We constantly make decisions and compromises about where to go to dinner or what colour to paint the kitchen. We negotiate with everyone from builders to children, so improving your negotiation skills will improve your daily life and sharpen your leadership skills.
What is a negotiation?
A negotiation is a strategic discussion that resolves an issue in a way that all parties involved find acceptable. The goal of a negotiation process is to find an acceptable common ground for all parties. You may not get everything you want, but you get enough to be satisfied. Negotiation skills is what gets you to your goal efficiently.
Having effective negotiation skills begins with developing a negotiation strategy. You don’t have to go to business school to be a skilled negotiator, but you do have to prepare. Think about your desired outcome as well as possible alternative outcomes before the negotiation process begins. Knowing what you must have, what is unacceptable, and what you’re willing to compromise on beforehand provides confidence during a negotiation.
Whether you’re purchasing a house or closing a business deal, you should know all the details before talks begin. Ask questions and do the research before any negotiation. Be confident and have a firm knowledge of your proposition as you leverage your influencing skills.
Remember the other party is doing their research and practicing their negotiation techniques too. They are probably considering how you might respond to pressure or their perceived leverage. It pays to give thought to what the other party might know or assume about your strategy and skills when developing your negotiation plan.
Rock ’em Sock ’em big boy
“Successful negotiation is not about getting to yes. It’s about mastering no and understanding what the path to an agreement is.” – Christopher Voss
Questions to ask yourself before a negotiation
A recent Harvard Business Review article described negotiation exercises most people never consider. Begin by thinking of your desired outcome and then work backward. Many transactions are simple, but if you’re negotiating a complex business deal, you may find there are other parties to contact, partner with, or bring into the negotiation.
Too often we overlook other parties or interests that might be involved in or impacted by a transaction. To create an approach that accounts for all the parties that might help you in a negotiation, the HBR advises asking yourself four questions.
- What business outcomes do we seek through this negotiation?
- Who cares about those outcomes?
- Who can do something to bring about those outcomes?
- How can we engage, directly or indirectly, with parties that share some of our interest in achieving those outcomes?
What is Bargaining?
Bargaining involves negotiating the terms and conditions of the deal. Your communication skills are critical for exerting persuasion and influence while bargaining. To find out ways to build strong communication skills, check out our blog Top 10 Soft Skills You Need. Here are some highly effective bargaining techniques you can combine with your interpersonal skills in tactical negotiations:
Question for Information: This is where your preparation research pays off by allowing you to ask informed questions. You will be gathering information while demonstrating to the other parties you are to be taken seriously. Ask direct, thoughtful questions that are relevant to the details and structure of the deal.
Present your key commitments: What are you bringing to the table? It’s important to outline in detail everything you are willing to commit to the deal.
What are their key commitments? What are they bringing to the table? It’s equally as important to have clear and concise commitments from the other parties involved.
Examine and test their commitments: Are their commitments realistic? Are they overpromising to secure the deal? Test their commitments by asking pointed questions and make sure you receive specific answers.
Challenge the other party for justification on their position: You may not agree with the other party’s proposed commitments. If that’s the case, challenge their offer or their reasoning.
Identify and highlight common ground: Each party should work to arrive at a fair agreement. To achieve this, you must find common ground. Look for what you all agree on and build on that.
Watch for signals of movement: Practice your active listening. People often reveal they are ready to move by the tone of their voice or their word choice.
Summarize arguments and seek acceptance: Summarizing throughout the negotiation ensures everyone is clear on the details. What was agreed upon? What wasn’t? Is everyone on the same page and happy to proceed?
Walkaway: Always be prepared to walk away from negotiations if the deal looks bad for you. Be professional and courteous about it, but you need to know when negotiations are failing and be willing to end the transaction. This can also be used as leverage in strategic negotiations.
Closing: Once everyone has agreed on the details and how to proceed, it’s time to close the deal. Be careful about trying to speed this part of the negotiation up. Also, keep in mind pressure tactics and heavy-handed negotiation techniques can backfire.
“Let us never negotiate out of fear. But let us never fear to negotiate.” – John F. Kennedy
Using your negotiation skills to close an agreement
When finalizing a business deal, keep in mind these negotiation techniques:
Emphasize the benefits to both parties: Highlight the benefits each party receives from the deal.
Discuss contractual obligations: Clearly outline the ramifications of either party not meeting their obligations.
Ensure all agreements are understood and accepted: Do a final run-through of the top-end agreements made by each party. Does everyone understand precisely what’s been agreed to? Is everybody happy to proceed?
Highlight the final offer: This applies more to a financial transaction. After highlighting the roles, recap the final financial offer.
The deal must be well documented and signed: Ensure all parts of the agreement have been read, discussed, documented, and signed or initialed.
Forward on all relevant documents: All the involved parties will be provided copies of the required documentation.
Business negotiation is a process between two or more parties, seeking to discover common ground and reach an agreement to settle a matter of mutual concern, resolve a conflict, or exchange value.
A clear idea of the value you bring to the proposed deal.
Leverage is the power that one side of a negotiation has to influence the other side to move closer to their negotiating position.
Negotiating is more than conversations about whether you buy or sell. Almost everyone negotiates for something every day.
- Negotiating with a real estate agent on a house
- Negotiating with a difficult client who lodged a complaint
- Negotiating service or supply agreements with vendors
- Negotiating a dispute resolution with an attorney
- Salary negotiations with your boss
- Negotiating a business deal as a freelancer
A win-win negotiation is a careful exploration of both your position and that of your opposite number, to find a mutually acceptable outcome that gives you both as much of what you want as possible.
This is one of our executive briefings taken from our series of professional online business short courses from ELL. We have over 150 courses online with over 1,000 hours of e-learning covering a wide range of topics across leadership, management and personal & professional development created by industry experts and learning professionals.
Our Negotiation Course
Negotiation isn’t something restricted to the boardroom and multi-million dollar deals but something most people are faced with pretty much every day of their lives, even at a personal level. Negotiation is entirely about human interaction and there are certain phases, stages and emotional and intellectual skills required to master the skill of negotiation, no matter what the circumstance. Our course will give you an understanding into what a typical negotiation will play out, what an opponent will be thinking and the confidence to understand and find the result that makes each side think they have a win. You will learn that an atmosphere of respect is essential and that precious feeling of win-win will make all the difference in the long-term.
By the end of this short business course on Business Succession Planning, you will:
- Understood the basic principles of exchange and reciprocity
- Know how to conduct a respectful and winning negotiation
- Identify potential issues and problems and deal with them
- Create a successful negotiation that will lead to long term benefits
In each of our business courses, you get access to around six hours of e-learning that you can watch, listen and read. There are usually 100 questions and at the end of the course you will receive a certificate of completion that you can use against any personal or professional development requirements. As well as the course, you also receive a FREE e-book that you can read on your Kindle or other e-reader. You also get a FREE audiobook of the course so you can listen to the whole course uninterrupted on your device.