The art of negotiation

It could be said that negotiation is more of an art than a science as we have seen very recently with the Brexit negotiations. If negotiation was a science, the UK Government (or the EU) would already have a deal they are happy with, which is not currently the case. So what are the main issues to tackle when dealing with the art of negotiation?

FAIL TO PREPARE MEANS PREPARE TO FAIL

The old adage still rings true and is fundamental when entering any negotiation. The key to a successful negotiation is preparation. Start by asking yourself what you want to achieve and why, what the alternatives might be, and what would happen if the outcome was ‘no deal’ or you simply walked away. The other parties underlying reasons for negotiation, may not be immediately apparent at start of the negotiation (or in my experience, sometimes even at the end of the negotiation process!). 

It is also important to understand who you are negotiating with. Try and put yourself in their shoes and consider what their individual aims and objectives are. This will then allow you to put strategies in place to align your interests and get the deal done. 

On the basis that you have done your homework thoroughly, you can try and draw out the other side’s drivers and deal with these issues in an open and honest manner in order to strike a deal.

NEGOTIATION STRATEGY

Negotiators and their strategies take all shapes and forms, here are three simple categories:

  • Aggressive negotiators. They see negotiation as a win or lose scenario. They tend to begin with a high or low starting position, and could possibly come across as bullies. Aggressive negotiators can be ok for one-off deals, but tend to be unsuitable for long-term business relationships.
  • Friendly negotiators tend to have a more realistic starting position. They can offer a collaborative approach that solves challenges and engineers the best win-win deal for all parties. They tend to be a better choice for forging long-term relationships
  • The third category is chameleons. Chameleons are complex characters that come across friendly, but are doing so manipulatively to engineer the best outcome for themselves. Watch out for mind tricks, and think twice about forming a long-term relationship with them.

In the majority of cases, it is best to aim for a win-win outcome, where both parties have acquired something that is of value to them.

To achieve this, it is essential to enter into any negotiation knowing exactly what your starting position (which will generally be your best case scenario) and your “bottom line” position (the worst outcome that you are willing to accept) are and at what point you would walk away.

TACTICAL NEGOTIATION

The aim is to stay in control of the negotiation, but that doesn’t necessarily mean dominating the room. It is important to maintain the strength of your position backed up by evidence and facts, but you must also be prepared to give away a few concessions to get the deal done. Sometimes you may find that you have something that the other side values more than you do, which is why it is important to probe the issues to see what reactions you can illicit from the other side.

Useful tactics include:

  • Being direct and positive and sticking to “we need”, “we want” and “we insist” rather than “we would like” and “we hope”.
  • Backing up your position with tangible evidence;
  • Staying silent when the opponent is making concessions.
  • In need of some time to think? Throw a curve ball to change the pace or direction of the conversation.
  • Not accepting deadlines that try to force you into making decisions.
  • Avoiding suggesting “we’ve had a better offer from someone else”. It may work to your advantage, but it could also end the negotiation prematurely.

BODY LANGUAGE

Throughout the negotiation, pay close attention to body language – both your own and that of the opposition s it can play a vital role. When trying to influence others think about the way you present yourself and how you speak. Psychologists tend to refer to the Rule of Personal Communication when analysing both verbal and non-verbal communication which claims that body language accounts for 55%, pitch of voice accounts for 38%, and words only 7%.

The ideal body language projects confidence and control, and this can be achieved by spreading out, looking alert, maintaining eye contact, and smiling whether you mean it or not. Keep a close eye on your opponent’s body language as well.

A DONE DEAL?

Once the deal is done at the end of the negotiation process, write down what was agreed and sign it, to (hopefully) avoid further rounds of negotiation later.

Re-negotiations can take place further down the line but as there is an agreement already in place, all parties tend to only seek re-negotiations when the deal is not working for them. This could be due to certain trigger events such as increasing costs of resources or supply chains. It is beneficial to include in the final agreement, the means to renegotiate on these certain events so that both the deal and the relationship are sustainable for all parties. 

CONTACT VINCENT

If you would like more information or advice relating to this article or a Corporate law matter, please do not hesitate to contact Vincent Billings on 01727 798104.

© SA LAW 2018

Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them alone. You are recommended to obtain specific advice in respect of individual cases.