Several good business leaders fail at negotiation, either because they are bulldozers, or simply because it is easier to impose than it is to negotiate. However, thanks to management science, we now have an insight into the seven key elements of negotiating successfully.
What is negotiation?
In the simplest of terms, it is a conversation with another stakeholder in order to get the results you want. However, layers are added to the process, because:
The party you are negotiating with also has its own preferences and constraints,
Interaction on both sides involves human beings, so emotion and empathy come into play, and
Negotiation is about finding the most optimum solution within the given framework.
Several good business leaders fail at negotiation, either because they are bulldozers, or simply because it is easier to impose than it is to negotiate. However, thanks to management science, we now have an insight into the seven key elements of negotiating successfully.
Seven Steps to Negotiation
Plan And Prepare: It is perhaps no surprise that the first two components of a negotiation are done without the other party being present in the picture. Why is planning important? Planning gives you time to consider all variables and constraints on both sides before proposing a solution. Without planning, you’ll just be wasting precious time.
Rehearse: Some people can just present very well on the fly, but when it comes to negotiating terms the way you want to, it is best to rehearse well in advance. Rehearsal gives you a chance to consider all counter-solutions that may crop up, and give you time to think through them.
Explore and Explain: This is the stage where you discuss with your team and come up with a list of alternatives that would work for both parties. Exploring alternatives and explaining them gives you a chance to propose only those arrangements that would truly work for you, without getting caught up in a tangle your team doesn’t agree with.
Propose: Finalise on one common solution that would ideally work for both parties and propose it to the other party, so that it can be implemented.
Bargain: Be prepared for quite a bit of back-and-forth. Clauses, conditions, prices- there are just so many aspects it is possible to negotiate on. However, since you are already aware of how the solution works for you, what clauses you can compromise on and what you cannot, bargaining for the optimum solution becomes easier.
Agree: Once both parties are on the same page, the process of negotiation is nearly complete, with an agreement either being signed or agreed upon verbally.
Review: The final step towards any good process is review. Over time, you will be able to see how the agreed-upon solution works in real life. This gives you a chance to review the commitment, or at the very least, learn from the experience so you can do better from then on.
In the next article in the series, we talk about the variables in negotiation and concessions- how to make them and when to make them.