How To Develop Your Negotiation Skills

Think Success by Jayaram V

by Jayaram V

The following essay is reproduced with publisher's permission from the book Think Success by Jayaram V.


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You may wonder how a chapter on negotiation is going to help you. True, this article is written mainly for professional use. However, do not assume that negotiation skills are not useful to you in your daily life. Whether you know it or not, you negotiate every day, with your friends, family members, colleagues, the people and the companies you deal with, and even God.

Early in life, as you begin to negotiate with your parents and peers for favors and concessions. You learn the importance of negotiations, as you bargain for playtime, television time, or some other gain to do your homework, eat your food, or keep your room clean. Later in life, you use that skill to negotiate with other people, including your teachers and friends. You also learn that if you are not careful, others will take advantage of you or may consider you weak. Therefore, although this chapter deals with advanced negotiation techniques used by professionals, you may still find it useful in some parts.

What is a negotiation?

Negotiation is a communication process, in which we try to resolve differences and conflicts by holding discussions. In the process, through the effective strategies of cooperation, compromise, and collaboration, we build or strengthen relationships, understanding and harmony. The result of a successful negotiation is an agreement or an amicable settlement. The Constitution of the USA is a negotiated document. The treaties signed by a county are negotiated agreements. So is the paper you sign when you accept an offer of employment or hire a technician for servicing and repairing your heating and cooling system.

We all use negotiations to achieve our goals, meet our expectations, protect our interests, work out a compromise or simply to avoid trouble with others. Sometimes we negotiate for ourselves, and sometimes on behalf of others as mediators or representatives. Negotiation is also a decision-making or a problem solving process, involving two or more parties, who are in a conflict and unable to reach a compromise because of conflicting interests and opposing views. In simple terms, any negotiation between two opposing sides is a kind of conflict resolution or a settlement process, in which they aim to achieve their respective goals using various means. Both communication and strategy play an important role in the successful completion of a negotiation.

From a negotiator's perspective, each negotiation is a balancing act, in which emotions have to be managed, conflicting ideas and interests have to be prioritized, solutions have to be found, and expectations have to be adjusted, before the participating parties can arrive at an acceptable and amicable solution. People in a negotiation have to deal with one important task. It is how they can maximize gains and minimize losses for all the parties involved, and avoid friction and rancor to the extent possible so that in the end everyone is comfortable with the outcome of the negotiation and feel satisfied.

Phases in a negotiation process

Just as not all conflicts are alike, not all negotiations are alike. Depending upon the situation and conditions, you have to use different strategies and approaches to conduct them. Most negotiations are conducted professionally, and they adhere to a specific pattern involving the following four main phases: perception, preparation, resolution and post resolution. Whether we negotiate with a salesperson or more formally, with a builder or an organization, this is the usual manner in which the negotiations proceed. The importance of these four phases is discussed below.

Perception

This phase begins when the parties realize the need to negotiate to resolve their problems, or fulfill their needs and expectations. To begin the process, each side may formally express their willingness to participate in negotiations to work out a settlement or explore the possibilities of a settlement. At the same time, they may also consider other options and alternatives to see whether they can manage without holding any negotiations or an agreement. In this phase, the future of the negotiation depends a lot upon how the parties to negotiation perceive each other and how they weigh the threats, opportunities, strengths and weaknesses of each side. Further, both sides must perceive clear advantages in coming to terms. Otherwise, there will be no incentive to negotiate. If only one party is interested, they have to take the initiative and sweeten the offer to compel the other side to consider the option. In case of individuals, the perception phase begins when a person becomes aware of a problem or a need and approaches another for a solution or help. Alternatively, it may begin when a person or an organization makes an offer or suggests a solution.

Preparation

 In this phase, the parties agree in principle to negotiate their terms or expectations as a way forward to address their differences and arrive at an understanding. Once an explicit understanding is reached, they begin preparations to present their side of the argument. In most cases, preparation involves an organized effort to gather information about the problem, determine the formalities and procedures that are necessary for conducting the negotiations, weigh the pros and cons, and play out various scenarios and contingencies that may arise. Parties may also work out place and time, goals, resources, strategy, and backup plans to deal with the outcome of the talks. In more complicated negotiations they may gather information about the participants, decision makers, and stakeholders, their vulnerabilities and personal strengths, where they may agree or disagree, and who may create problems and obstacles and requires special attention. In this phase, both parties try to let the other side know their concerns and expectations and how they want the negotiations to proceed. In individual negotiations also the process is practically the same, where each side may collect necessary information to strengthen their arguments or counter those of their opponents. In some cases, they may consult friends, family and experts for additional advice or inputs.

Resolution

 In the resolution phase, the parties focus on how to protect their interests, stake their claims, defend their positions, and meet with the expectations of the other party, without sacrificing their own. They may also decide upon how to overcome the objections and demands of the other side, without disrupting the negotiation process. The duration of this phase depends upon the nature of negotiations, the terms of the agreement and extent of differences to be resolved, and how the negotiating parties view each other. The talks will continue if both are serious about the settlement and willing to make necessary sacrifices and adjustments. This is considered the most difficult and problematic phase of negotiations, because all emotions, past differences and animosities resurface as both sides come face to face to state their terms and protect their interests. If not handled properly with maturity and skill, the whole process may collapse, making any further reconciliation between them even more difficult.

During negotiations, the parties have to manage not only facts and issues but also the impressions they may create through their words and actions. They have to ensure that they put on the best show, and they are not perceived as weak, vacillating, or insincere. In the end, even if the terms are unfavorable and the negotiation was largely one-sided, the losing side does not want to look as if they have lost. Since negotiations involve egos and personality issues, one cannot take the outcome for granted. As the discussions proceed, people on both sides may use tactics, power plays, and strategies to secure their aims, or coerce the other side to gain advantage. Sometimes, this phase may prolong indefinitely, if the parties are not mentally prepared to reach an amicable settlement and finalize the matter.

Post resolution

 This phase begins after a settlement has been reached and a formal agreement has been signed. When negotiations are complete and the terms are finalized, both parties have to implement their side of the agreement, and fulfill whatever legal, moral, and statutory obligations they have under the terms of the agreement. If the agreement was reached without conditions, they will focus upon the terms of the agreement. If there are preconditions, they arrange to meet them before they can move on to the next phase. Sometimes it may be necessary to appoint a mediator, or an arbitrator to supervise the settlement process to ensure that there will be no further consequences. Generally, after an agreement has been signed, companies tend to review their actions to see how they fared. This phase is crucial because, if not managed well, it may result in legal disputes, delays, problems and misunderstandings. An unpleasant situation may arise if any sensitive or secret information related to the agreement or the negotiation leaks out without the consent of the parties.

Negotiation and conflict resolution

Any negotiation is essentially a conflict resolution process. In both cases the goal is how to resolve the differences and reach an understanding or agreement. How conflicts are resolved through negotiations depends upon various factors. Every negotiator needs to understand them well to improve his or her chances of success. Conflict resolution depends upon various factors, which vary in each case. However, studies show that the conflict resolution approaches used by people fall into the following five basic patterns, namely avoidance, accommodation, compromise, collaboration and confrontation. Whether the conflicts involve individuals or big organizations, the basic approaches or strategies are the same. The importance of each in the context of negotiations is discussed below.

Avoidance

 In this approach, the parties remain silent and show no desire or initiative to seek any agreement or participate in any negotiations. They may do it either for emotional or strategic reasons to complicate the dispute, gain advantage, create pressure, intensify the conflict, or cause deliberate harm. Parties may avoid negotiation, if they think the relationship is unimportant, see no apparent benefit in negotiating, or do not want to face the emotional and mental turmoil.

When both sides are reluctant to break the impasse, a third party intervention or a legal injunction may be required to bring them to the negotiation table and resolve their differences. Unless the conflict is unimportant or the resolution has negative consequences for one or both sides, one should not use this approach to deal with any conflict. No conflict is ever truly resolved by avoiding it or ignoring it. Hence, avoidance is the least favored strategy in negotiations unless there are valid reasons.

Misunderstandings and differences arising from confusion and miscommunication should be resolved immediately. Simple conflicts can lead to bigger problems, if they are not resolved in time. If parties to a conflict are reluctant to resolve their differences, it is the duty of the negotiators to make them aware of the consequences.

Negative emotions such as fear, distrust, or anger prompt many people to avoid dealing with their problems or conflicts. Cultural factors also play an important role. Some people use conflicts to display their strength or aggression. If they are weak, they avoid facing their opponents, until they gain strength. For them, avoidance is a temporary strategy.

Confrontation

This is a negative, hostile and difficult approach, in which one or more parties to a dispute aim to resolve it through a flagrant display of naked power, aggression and negative emotions. The one-sided approach and frequent use of threats and coercive methods make the whole approach rather unpleasant and emotionally disturbing.

People who resort to confrontation do so mainly because they refuse to acknowledge the rights of the other side and treat them as equal. They want to be heard, but do not like to listen to the arguments of the other side. They want to give nothing, but take what they want. From a rational perspective, it is the worst way to settle any dispute, since it brings into play many negative emotions and leads to many complications.

Confrontation is a lose lose approach. In a game of confrontation, no one wins in the end, except perhaps the middlemen and third parties. Yet, sometimes confrontation may still be useful, without the aggression part, as a strategy to deal with unrealistic demands, delay the negotiations or soften the demands and expectations of the other side until they are ready for a negotiated settlement.

Accommodation

 In this approach, one side agrees to accommodate the other either because the demands are genuine and acceptable or because there is a strategic need to establish and nurture the relationship. This approach is appropriate only if the demands are genuine and the relationship between both parties is important. It is good if the accommodation is done on merits and in the best interests of all, and the beneficent party does not make a political capital out of it.

However, if onside is forced to accommodate the other, under fear of threat or law, or by the intervention of a coercive third party, there will be unhappy consequences for both as their relationship is damaged forever and any future reconciliation between them becomes utterly impossible. An unpleasant situation may also arise if both do not give due credit to each other for the sacrifices they made to reconcile their differences, but try to claim victory for themselves.

Compromise

 In a compromise, as the name suggests, both parties resolve their conflict by making tradeoffs, sacrifices and adjustments to their needs, demands and expectations. It is a good way to reconcile differences and establish goodwill and mutual understanding. However, any compromise is a partial or a temporary solution. It is effective only when both sides have a strong case and have to be content with some gains and tradeoffs.

Strategically it is not the best solution, since as the term implies each side should be willing to accept less than what they originally want and content with both gains and losses. Depending upon how fair and equitable the terms are and how they perceive their gains and losses, a compromise can cause disappointment and dissatisfaction, and make the parties vulnerable to criticism.

For example, if the circumstances change and new facts emerge people may view the whole deal in a negative light and question those who organized and facilitated the negotiations. They may eventually become the scapegoats of a failed deal.

Collaboration

 When both parties willingly and actively work together to solve a problem, explore an opportunity, or resolve their differences, it is collaboration. It is effective when the collaborating parties respect each other and willingly trust and work together to fulfill their respective obligations and find a solution or consensus.

It is ideal for situations where a solution is not readily available with either party and both need to work together and pool their resources to work it out, either directly with their active participation or indirectly by forming a task force under their joint supervision. Collaboration is also useful when the goals and interests of the parties are interconnected and a solution resulting from their collaboration benefits both.

Another situation where it can be used is when both have a stake in each other's success, and the success of one party contributes to the success of the other. Collaboration is a win win approach, even in a competitive environment where both sides can complement each other's strengths and weaknesses and work together as a team. It minimizes friction, increases understanding, and cooperation. It is better than other strategies because both parties gain from the collaboration and contribute to each other's success.

The components of a negotiation

Each negotiation has two main components: the substance and relationships. The substance is the information, which is material to the negotiations and forms the basis of the communication and terms of agreement. It is the totality of what you negotiate with the other side before you formalize an agreement. The relationship is about the dynamics of the communication and understanding that exist between the people and the parties in the negotiation, and the factors that influence their behavior and decision making.

In negotiations you have to give due importance to both, since they are vital to your strategy and success. In addition, you may have to pay attention to the background or the history of the negotiations also, and the people who are involved in it and responsible for it. Negotiations become increasingly difficult, if the current situation is precipitated by a series of failed negotiations, unresolved conflicts, ego clashes, and misunderstandings.

Any negotiation is essentially a civilized means to repair relationships, resolve differences, and work out mutually acceptable agreements. When you negotiate, you have to consider the repercussions your actions and decisions may have upon the agreement and upon the people who are a party to it. If you are a hard negotiator you may win the argument, but lose the relationships. If you damage a relationship, you may find it hard next time to negotiate with the same people or entities.

Even when you negotiate with people who have a lesser bargaining power than you, as in case of when you deal with a supplier who depends upon you, you have to treat them well and avoid using aggression and intimidation as yours strategies to force them into an agreement.

A skillful negotiator balances both aspects of the negotiation, unless there is a valid reason to choose one over the other. For example, at times, you may have to focus upon the substance and ignore the relationship, if the relationship does not matter, but the terms are important. In an alternative scenario where the relationship also matters, you may have to think of using compromise or accommodation as your strategy to reach an agreement.

Qualities of a skillful negotiator

A successful negotiator knows how to negotiate objectively without giving in to emotions and personality issues. He knows beforehand what he wants to achieve and organizes his negotiations with cautious optimism. In negotiations, it is important to know your needs and expectations as well as those of the other side, to ascertain what you can expect in the end, and whether it is worth negotiating at all. If you are not clear about your goals and terms you cannot set your terms clearly, make your demands, or deal with the contingencies when they arise. As a negotiator, you must negotiate with clarity and purpose, and prepare for the occasion well, by gathering all the required information.

You must know not only how to deal with the objections of the other side but also how to present, defend and strengthen your case. Good communication skills and an open mind are very necessary. You do not have to promise anything in advance in any negotiation, except your willingness to participate in the discussions with an open mind and present your case.

There are no shortcuts to become a skillful negotiator. You have to cultivate the skills by using opportunities, which present themselves to you every day when you speak to a salesman about a product, or service when you sign up for a service contract when you visit a restaurant, or when you meet your supervisor or employer to negotiate the terms of your employment.

A successful negotiator is open-minded, mature, objective, patient, and reasonable. He is focused, assertive, practical, proactive, and adaptive. He combines in himself the roles and responsibilities of a leader, communicator, risk taker, and learner. Although he is flexible and acts differently according each situation, he is not prone to make decisions to please others or win their approval. Setbacks and failure do not deter him, as he does not take his failures personally

Guidelines for effective negotiations

Negotiation skills play an important role in shaping your life and destiny. You can use them to protect your interests, claim your rights, reach your goals, or explore various opportunities to improve the quality of your life. Using them you can not only stay ahead of competition and secure success and happiness, but also protect yourself from the greed, envy and over exploitation of others.

Your success in life depends upon how you negotiate with others to achieve your goals and protect your gains. Hence, whether you negotiate for professional or personal reasons, you need negotiations skills for a better life. The following suggestions help you to improve your negotiation skills, and use the power of negotiations to secure the best things in your life.

1. Know what you want and be clear about it. If necessary, write down your goals before you negotiate with others.

2. Ask questions and seek clarifications to know what the other side wants or expects from you, and acknowledge their right to state their terms. Unless you ask, you will not know whether you should negotiate or not.

3. Do not hesitate to state clearly what you want and what you expect from the other side.

4. Understand the rules, conditions and limitations that apply to the negotiations, and the framework in which you can set your terms.

5. Keep the alternatives in your mind, but do not reveal them in advance.

6. Do not offer anything in advance, unless you are sure that the other side is willing to respond to it favorably. Make your offers or reveal your terms incrementally. Alternatively, respond to each offer with a counter offer.

7. Do not let the other side know your entire strategy in advance. Use your knowledge to your advantage.

8. Be courteous, but assertive and do not hesitate to state your terms or expectations without being aggressive.

9. Keep your cool and do not let you emotions betray your thoughts. If you are calmer and more assertive, your negotiations will be more effective.

10. Try the strategies of collaboration, accommodation or compromise, before deciding to avoid further negotiations.

11. Give equal importance to both the substance and the relationship aspects of your negotiations.

12. Practice good communication skills. Listen actively and mindfully, and pay attention to both verbal and nonverbal types of communication.

13. Keep your emotions firmly under control when you are provoked or when you have to respond to emotional and stressful situations.

14. Do not promise what you cannot deliver, or ask what the other side cannot give.

15. When an agreement is reached, make sure that you understand the terms clearly. If necessary ask questions and seek clarifications.

16. Do not negotiate in a hurry, or out of fear and anxiety. If you do not have time, request for rescheduling the meeting.

17. If other people's approval is necessary, discuss with them all details and take their consent before you agree to any terms. Many negotiations fail because of ego problems and personality clashes. Therefore, keep everyone in the team informed and take nothing for granted.

18. Negotiation itself means a two way communication process, in which there must be tangible benefits for both sides when they reach an agreement. Therefore, facilitate that two-way communication, without trying to shut down the conversation, or impose your will. Even if you are the stronger party, it is better to be courteous and make the other side feel comfortable.

For a negotiator, building relationships is an ongoing and continuous process. In most negotiations, you have to deal with human emotions and learn to keep your cool and act professionally. You have to acknowledge those who help you, and respect those who disagree with you. When your interests are at stake, you should persist in keeping the communication open, until an agreement is reached or a solution is found, without succumbing to fear, pride, anger, egoism, aggression, or intimidation. Also, when you reach an agreement, you have to keep your promises and fulfill your obligations.

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