скачать книгу бесплатно
Partner. This is who you negotiate with.
Win-win. This is how you want to end up, with both parties happy and ready to do business with each other again.
Hopefully, you will recognize that these ideas are not just the stuff of reaching commercial agreement – they also allow communities to thrive and allow us to co-exist as human beings.
This book will show that you negotiate more often than you realize. Once you realize you are doing it, you will be more successful.
Before you start negotiating, be clear that you are prepared to ‘give and take’.
1.2 Consider alternatives to negotiating (#ulink_50d67280-e252-5ba4-a5cb-54246361682a)
You are trying to reach a commercial agreement, secure an industrial relations agreement, solve a problem or resolve a dispute. Negotiation should take place when you need somebody’s consent to a proposal, and they need yours before you decide to agree. But you should only negotiate if negotiation is the best way to achieve your objectives.
Consider that there are many alternatives to negotiating, and in some situations they may give you a better result.
Persuade. Persuade them that what you are proposing is the best option. This is a buying or selling approach that might be used in connection with a price rise or one of the terms of the contract. It doesn’t cost you money.
Impose. Just tell them what they must do, or what you must do (you could say you have no choice). Shops are effectively doing this when they offer goods on a non-negotiable basis. Sometimes price rises or purchasing conditions are presented as non-negotiable.
Instruct. It’s a less severe form of impose, but you are still dictating the terms if you choose to do this.
Postpone. Put it off till circumstances change. An example of this would be putting off price rises or reductions in a commodity such as oil or metals, because the short-term situation is too volatile. You could choose to allow the market to settle down.
Leave it to chance. Allow the situation to be dictated by outside events, such as linking a price to the dollar or inflation.
Give in. This is an option, but not one you will enjoy. Sometimes governments, companies or individuals have to give in because the odds are 100% against them.
Problem solve. If both parties can work on solving the same problem this may be a good idea. Employers and a trade union might co-operate to decide how best to deal with a financial crisis.
Arbitrate. Allow another person or body to solve this for you. An industrial tribunal could resolve an industrial dispute.
Plead. Rely on an appeal to someone’s good nature. This is only a good idea if you can rely on their good nature, or if it’s not important to you.
Whether one of these alternatives is a better option than negotiating depends on many factors – you, your boss, your negotiating partner’s circumstances, the market in which you operate, the short term, the long term, your confidence levels and risk, to name but a few. We will study these options in more detail in 1.3 and give you ideas on how to decide on the best option.
Before you embark on any negotiation, be sure to recognize that there may be better ways of solving the problem.
1.3 Decide if negotiating is your best bet (#ulink_328e5ce0-07ea-5498-a930-5c392f533e8a)
There is no point in using brilliant negotiating skills if you shouldn’t be negotiating. In 1.2 we listed the main alternatives to negotiating. Here we will explore the advantages and disadvantages of those approaches.
Persuade. If you can persuade them to your point of view, you’ve no need to negotiate. On the other hand, it can take forever. It won’t succeed if there is a serious clash of interests – if for instance your partner’s position in the market place is badly affected.
Impose. This can save you time and money, but it may ruin long-term relationships. Your partner may decide that you have stopped thinking win-win and are thinking only of yourself.
case study As a sales manager, I regularly negotiated a large contract to supply aluminium products to a US-owned company. One year we agreed to use an American source of primary ingot as the basis of our costs. We neglected to consider the possibility that our costs might shoot through the roof because of changes in the dollar-sterling exchange rate. We took a chance on there not being a significant change in the exchange rate. Months later there was a massive change, and our hard-won agreement was put at risk – we had left one major issue to chance. After that, we learnt to put exchange rate limits in all our agreements, and negotiated a mechanism that kicked in outside those limits.
Instruct. It’s quick, but people like to be offered choices, so are put off by being told what’s going to happen.
Postpone. A good idea if the problem might go away, or if you think conditions will change in your favour. A bad idea if conditions change for the worse.
Leave it to chance. A good idea if it seems fair. A bad idea if one party suffers so much that the agreement is sunk.
Give in. A good idea if you have no choice whatsoever – it’s going to happen anyway. A bad idea if it destroys your credibility or if it will cost you in the long term.
Problem solve. A good idea if you can work together on the same problem. A bad idea if each party has a seriously different agenda.
Arbitrate. A good idea if both parties will accept the outcome. A bad idea if one party will be unhappy with the decision of the arbitrator.
Plead. It shows you in a conciliatory light, as someone who is reasonable. But it puts you at the mercy of others, and may make you appear weak.
Once you have considered these options, but have then decided that negotiating is your best bet, we can focus on the techniques that will allow you to negotiate successfully.
Consider the advantages and disadvantages of alternatives to negotiating before embarking on a negotiation.
1.4 Know who you are dealing with (#ulink_6e4ef881-3887-54b4-872f-4d1d3b25f6ea)
Whether we seek to impose a decision on someone, or leave things flexible, or negotiate, depends on the other party as much as on us. If you are to succeed, whatever you decide to do must depend to a large extent on who you are dealing with.
These are some of the things that you need to consider about the other party when negotiating:
Expectations. What are their expectations going to be? Why do they have those expectations?
Behaviour. How will they expect you to behave? How will they behave? Are they naturally aggressive, or conciliatory? Will they make
case study I used to negotiate regularly with an Indian family that had a significant position within the aluminium industry in Europe. Whichever member of the family I negotiated with, I needed to recognize that they would always inflate the volumes that they were going to take in order to get the best price. They talked big and took a lot smaller. I had to develop a strategy that coped with this. One tactic I used was to go right back to square one with a fresh package for the reduced volume. That was not well received. Instead I made sure that my concessions on specification and price were still going to be acceptable to me when the volumes inevitably started to reduce, and I built that into my first package.
extreme demands or will they be more reasonable? Will they react in a logical way or will they expect you to behave in a particular way, because that’s the way you have behaved in the past? If you suddenly behave differently, how will they react – will it increase or reduce your chances of reaching agreement?
Culture. What culture do they come from? We will return to this in 1.6, and elsewhere – because understanding their background is a vital part of understanding what will appeal to them and what will turn them off. This will be the difference between success and failure.
Preferences. Will they want to negotiate one-on-one or will they turn up as a team? Is the other party likely to see the world through positive or negative eyes? Is their glass half full or half empty? Do they look at the big picture or the detail?
Pressures. Even if they turn up on their own, has their boss exerted pressure on them to get a particular result? If there are such pressures on the other party, I would call this ‘having a monkey on their back’ and you need to be aware of it.
Options. How important are you to them? How important is it for them to reach agreement? What’s their best alternative to reaching agreement?
Understand who you are dealing with and be sensitive about them and their situation.
1.5 Aim for win-win outcomes (#ulink_f614f42e-cf31-5777-811a-18d48a446115)
Whether you are a buyer, a seller, or involved in industrial relations, you will usually negotiate with the same people on a regular basis. You will want to develop a relationship with them so that they want to do business with you again. You will both want to feel that you have made a good agreement – we call this feeling ‘win-win’.
We are going to consider outcomes – the end results of negotations. It is crucially important to know your own objectives – where you want to finish up – before you set off. There are four possible outcomes to any negotiation:
1 Failure to agree. When it is appropriate for the negotiators to go their separate ways, because there is simply nothing on which they can possibly agree.
“Begin with the end in mind”
Stephen Covey, author of The Seven Habits of Highly Effective People
2 Lose-lose. When both parties refuse to move, when it was in both their interests to do so. Neither side achieves its objectives nor do the two parties generate solutions to their problems. This leads to total disillusion and frustration with the negotiation process and a danger of souring long-term relationships through a loss of respect and trust. When they come to reflect on this after the event, both parties are likely to regard it as an opportunity missed and will not be proud of themselves.
3 Win-lose. When movement is predominately one-sided. The side that did not move ‘wins’ whilst the side that did all the moving ‘loses’. In a win-lose situation, individuals are usually more concerned with victory rather than relationships. Too much effort is put into achieving short-term goals rather than long-term objectives. A ‘them and us’ attitude is created and the long-term relationship between the parties is jeopardized.
4 Win-win. The experienced negotiator will work towards creating two-way movement that is felt to be reasonably split between the two sides. Movement is aimed at bridging any gaps between them. During the negotiation, channels are developed and kept open for two-way communication. With an emphasis on flexibility, solutions are proposed that enable both sides to achieve their objectives. Satisfactory decisions are arrived at and long-term relationships are enhanced. There is a perception that both parties have demonstrated reasonable movement, the lifeblood of negotiations. Once the meeting is finished, there is a spirit of partnership as the two parties set about making the agreement work.
If you want to do business with someone in future, aim for a win-win result from every negotiation.
1.6 Learn to deal with different cultures (#ulink_45f37e7b-2219-5616-8fe0-ce70803fdb6a)
I would define culture as ‘the way we do things around here’. What is meant by ‘around here’? It means wherever in the world you are doing business. To succeed as a negotiator you need to understand where the other party is coming from.
It is very dangerous to generalize on the subject of culture – you could say there are as many cultures as people you deal with. The important thing is to be prepared for others to think and behave differently from you. The usual advice for dealing with the Japanese is to be very, very patient. Yet no culture is entirely predictable, so don’t be surprised when you encounter some Japanese who expect you to hurry up!
case study The Japanese have a very special approach to negotiating. In my experience they are very difficult to read (like good poker players) and frequently need the approval of their colleagues on key issues. I have negotiated with Japanese agents over substantial supplies of aluminium sheet for making freight containers. As negotiators, they are not aggressive, but patient and firm. The specific Japanese approach that I would like to share with you is their tendency to go over the same ground again and again. Once at 6:00pm, I felt we were minutes from agreement. We had been hard at it for three hours. I should have known when they said “can we just check on the specification” that it would take another four hours!
“If you negotiate with Japanese clients, ask questions. When you think you understand, ask more questions”
John L Graham, professor of business, University of California
Nor can you make generalizations about gender differences. When men are negotiating with women, some feel a gentle approach is called for, but many women will object to being patronized in this way. Some women want to prove themselves better than men, and will therefore prove as combative as any man.
Some businesses have reputations for being aggressive in everything they do – in employing people, in buying, and in selling. If you deal with them, your tactics need to be adjusted to suit theirs – with an aggressive first offer for instance. Other companies that you will deal with have an approach that is very much concerned with respecting the rights of their employees or their suppliers. You simply have to know who you are dealing with!
Your negotiating partner’s behaviour may be very different to your own, so be prepared to allow for this.
Prepare clear objectives (#ulink_e7701f8f-d613-5565-800d-0d28ff7d1e1b)
The old maxim ‘proper preparation prevents poor performance’ is as crucial in negotiating as it is in presentations, sales visits and other areas of business. This chapter provides you with a preparation framework that allows you to define your objectives, anticipate the other party’s approach, and develop your own strategy and tactics. Thus prepared, you have a much better chance of reaching an agreement satisfactory to both sides.
2.1 Plan your approach (#ulink_e298aff8-ac2d-59ea-87c6-db95b02ed64e)
A clear understanding of your objectives is essential when negotiating. You should be ready to propose a package that is challenging but credible. Your preparation should end with you deciding on your ‘Desirable’ list and using it to form the basis of your first proposal. Use these steps to prepare.
1 List the things on which you can give and take. These are called your negotiating variables. If it is possible to give and take on something, list it as a variable.
2 For each variable, list the ‘Desirable’ (best you can hope for), ‘Probable’ (most likely) and ‘Worst’ (worst that you would want to finish up with) outcome from your point of view.
3 Put a value on the difference between ‘Desirable’ and ‘Worst’. Now you have identified what the most valuable items are from your point of view. Price and volume are obvious values, but sometimes it is more difficult to put a value on a variable.
4 List all those things on which you are not prepared to give and take. You are effectively saying they are non-negotiable.
5 Look at everything done so far from the point of view of the other party. Ask yourself what they will be looking for on each variable – and what variables they will be looking at.
6 Consider where you will have areas of agreement, and where there will be disagreement. If your partner wants to negotiate on the things that you have considered to be non-negotiable, you may struggle to reach agreement.
7 Having weighed up the situation, you should be prepared to propose your first package (see chapter 4) as the ‘Desirable’ set of objectives, although the Discussion (chapter 3) may cause you to modify your first proposal.
Example list of negotiating variables
This table shows how selling a family business looked when listed in the way described. Your preparation will always give you maximum support if you finish up with this sort of five-column table.
Prepare a detailed list of variables and assess their importance to both parties.
2.2 Anticipate the other party’s approach (#ulink_2fe9a4ad-0ce0-58a9-8a0f-24be3cab6787)
In your preparation, it is important to consider the likely reaction of the other side (your negotiating partner). There is a need to display empathy – to put yourself in the other person’s shoes.
You are not negotiating in a vacuum. You have to work out an agreement with other people, who have their own objectives, problems and emotions! Here are some of the things to consider:
Priorities. What’s important to them is what has the most value to them. So it is important to be aware of their likely gap between ‘Desirable’ and ‘Worst’. You can’t be sure of this until the discussion stage, but you can think about relative importance as they will see it.
case study A buyer is negotiating the purchase of a batch of components for a machine. The buyer’s position is as follows: ‘Best’ price £6.44 each; ‘Worst” price £7.37. The seller’s position is: ‘Best’ price £7.80 each; ‘Worst” price £6.80. Here the negotiating issue is price. Somewhere between ‘Desirable’ and ‘Worst’ limits is a potential negotiated settlement for both parties. The area of overlap is a price between £6.80 and £7.37. If there is no overlap on another issue (say, payment terms) there would be a potential disagreement and failure to agree. This will only be overcome by one or both parties being flexible.
“If you are to put on another man’s shoes you must first take off your own”
Mark Twain, American author
Wants. You need to consider ‘wants’. What they want and what you want. ‘Wants’ are crucial in any negotiation because you trade/exchange what they want with something that you have.
Monkeys. Does the other party have any serious ‘monkeys on their back’ – things that restrict their ability to move and to be flexible? If they have, you need to understand this, bring it into the open, and help them understand why this is a barrier to both. (I often find companies make credit terms non-negotiable. This can be a real obstacle to agreement, and movement on this issue need not be expensive.)
Behaviour. On every aspect of the negotiation keep asking yourself “How should I behave?” and “How will they behave?” Only then, for example, can you make a good decision about whether your ‘Desirable’ package is the appropriate place to start. And only then will you be ready for their ‘Desirable’ package.
When you prepare, put yourself in the other party’s shoes as well as considering your own position.
2.3 Use a framework to guide you (#ulink_0ca32fc5-ffa8-55d1-8d4a-3a38a612efbb)
From your preparation in 2.1 you have a framework which tells you how many variables you have – how many items there are on which you can give and take. You have an idea of what are the most important items to you and to the other party.
Use your framework throughout the negotiation, to allow you to control the result. Here are some of the ways you can do this:
1 Focus early discussions on the variables you are more likely to agree on. This sets a constructive tone, but does not mean you agree on one or two items – see 4.5 ‘Don’t get salami-ed’.
case study I helped in a negotiation that involved providing consignment stocks of fans for a customer building air-conditioning units (consignment stocks are buffer stocks, usually held on a customer’s premises, but only invoiced when the customer draws the stock out). On the face of it, the variables on which we could give and take were the number of items, the quantity, the price and payment terms. The more we prepared, however, the more variables we identified – the period of the agreement, obsolete stock/write off arrangements, carriage, currency changes, insurance costs, ownership of goods, and how to control damage. We considered the value of each of these variables, and this allowed us to negotiate with confidence.
2 You have identified the most valuable variables. Use this framework to calculate the value of any concession that you might be about to make.
3 Use the framework to assess the cost of concessions on one variable with the cost of concessions in another area.
4 Use your framework to decide whether you will hold back discussion on any of your variables. In other words, hold back on one item and use it as one of your final cards when you are wanting to come together and agree.
5 When you negotiate, be prepared to use this framework to re-assess what variables are most important to your negotiating partner. Remember, you want to do repeat business with them.
6 Be ready to use your framework to assess the value of any new variable that crops up in the negotiating process.
Don’t leave your preparation at home! Build on your prepared framework throughout the negotiation.
