Two tips for negotiations

There are plenty of good books on negotiation. There are plenty of bad ones too. I think a president may have written one… I don’t want to tread old ground or give a comprehensive overview, but I do want to share two key insights from my own experience. If you need my credentials: I’ve bargained on pay and benefits for hundreds of thousands of people and negotiated deals worth millions of pounds. I’ve won some and I’ve lost some.

Firstly, I fully endorse the view that you can only succeed at negotiations if you have a genuine alternative to negotiating. You have to be prepared to walk away from the deal. You may prefer the negotiated option (you should prefer a negotiated option or there’s no point in bargaining) but you have to have something else you can live with. In fact, more than live with: you should try to become enthusiastic about the alternative. If you can’t think of an alternative, create one before you start talks. Make it real and substantive, come to terms with it, even begin preparations to implement it. The stronger your alternative, the stronger your bargaining position. If it is credible, make sure your counterpart is fully aware of it.

If you are buying a house, for example, and want the best price, it can’t be the only house you are prepared to buy. Look at lots of houses, get to like other houses and have a few that you are ready to buy. Make sure the vendor knows this.

The balance of power matters in negotiations. Yes, courtesy, empathy and pervasiveness can help at the margins (perhaps more importantly, their absence can be catastrophic), but it ultimately comes down to who has what and who wants what. Having an acceptable alternative will strengthen you practically and psychologically.

If you don’t have an alternative, you must either bluff or take what they give you. If they call your bluff, your credibility is finished.

This idea is developed further in the classic text on negotiating, Getting to Yes by Roger Fisher and William Ury. The book refers to BATNA, the “Best Alternative to a Negotiated Agreement”.

Secondly, and perhaps this applies more to political than to commercial negotiations: the people not in the room also matter. Frequently, negotiators, even when they are senior leaders, are also representing a constituency – their members, their board, their community. They may well be practical people, keen to get a deal done and with a nuanced understanding of the constraints of the situation. But, when they leave the room, they have to sell that deal to people with very different insights and motivations.

Many organisations contain an activist layer which is more radical and intransigent than either senior management or the ordinary member. These activists are often powerful gatekeepers.

Closing the deal with your counterpart is only half the battle. You need to close the deal with your own team too. Do this work in parallel. Take the temperature, keep people informed throughout, try to educate them on the constraints, and be prepared to sell what you’ve won. Keep an eye on your counterpart’s constituency too: it may limit their action or cause them to renege on the deal later.

If you reach an agreement and cannot sell it to your own side, you greatly diminish your credibility as a negotiator. On the other hand, if you are seen to be in tune with your people, are prepared to defend a difficult compromise and deliver what you promise, your credibility and your value go through the roof.

When you are representing a broader constituency, you should be spending as much time thinking about what’s going on outside the room as you do thinking about what’s going on inside it.

For a less collaborative angle on negotiating, you might like to check out Rules for radical managers.

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