The Key to Negotiation

I was 27 years old when I took off my lab coat for the last time. I was to become a buyer, then a sales rep, then a marketing guy, then a sales manager…and so on.

I had to negotiate.

For the first time.

Hmmm…negotiate. Sounded scary. Somewhat different to test tubes, chemicals and the certainty of the lab.

Negotiation isn’t really what a lot of people think it is. It isn’t win-lose. It isn’t personal. It isn’t a battle. It isn’t about slick tricks and techniques.  Or rather it doesn’t have to be.

It is about preparedness, thoughtfulness and suppressing your own ego.

There are many keys to negotiation, not just one.

There’s understanding who you’re dealing with – are they the decision maker (there is only one you know, the person who can say “yes” and they don’t wear a badge). Or are you talking to one of the many people who cannot say “yes”, but can say “no”? (In that the decision maker will not say “yes” if this trusted colleague is saying “no”).

Another key is having many options for getting to an agreement – the more options you have, the better your chance of getting agreement. It is tempting to construct in your head the perfect outcome, convince yourself it is fair to all parties and go into the meeting with your shiny solution. But unless you’re very lucky the other guy probably does not share your view of the perfect outcome. So generate options, options, options.

Yet another key to negotiation is to focus on interests, not positions. What interests are shared by the parties in the negotiation? Common interests will lead to a solution. Focusing on moving the other guy from his position while largely keeping yours unchanged isn’t going to work.

But there is one key to negotiation you MUST have…

Your BATNA.

You need a BATNA. Your Best Alternative To a Negotiated Agreement. Your Plan B as it were. When you have a BATNA, your objective for the negotiation is to better your BATNA – to come up with an improvement. This is a low risk objective. If you fail…so what? You’ve got a Plan B.

But if you have no BATNA, your objective in any negotiation is to do a deal… any deal. This is not a good place to be psychologically. It breeds fear, anxiety and meekness. And those show.

You see this on Dragon’s Den – the hapless entrepreneur offers 20% of their company for £50K. They get a single offer of £50K for 40% of their company. All they can do here is accept or walk away. (Interestingly, when they walk away it is seldom because they have a BATNA, it’s because they cannot stomach “giving away” so much at an emotional level).

They cannot negotiate because they have no BATNA. They must accept or decline. Yet they try to negotiate. And they do it meekly. They question “will you accept 30% for the £50K?” It’s never a statement: “I’ll give you 30% for the £50K”. It’s always a question. I have to look away at this point. The answer from the Dragon is always “no” and it should always be “no”. Then the hapless entrepreneur accepts at 40% anyway but there’s one difference – they’ve blown their credibility and they’ve begun a new relationship having diminished themselves because they’ve asked for something, not received it and accepted the fact that they’ve not received it.

It’s OK to do this in one-off transactional negotiation, e.g. buying a washing machine where you’re not trying to build a relationship with the other guy or establish credibility. But if you plan on meeting the other guy again across the negotiating table or the boardroom table, you need credibility and trying to negotiate without a BATNA is the quickest way there is to destroy your credibility.

Get a BATNA. It changes the game.

(A lot of this is covered in a great wee book called Getting to Yes: Negotiating Agreement Without Giving In by Roger Fisher and William Ury).

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2 Responses to The Key to Negotiation

  1. Eilidh Milnes October 11, 2010 at 6:12 am #

    Thank you Mark more Monday inpput.
    I have to say I love negotiating! I see it as a game of winners. And once I have secured the best deal for me, I always give my client something more than they expect – free copies of my new confidence book, a free coaching session or I buy them lunch – whatever suits them best.
    I am always prepared. I carry my negotiation checklist on my iPhone as well as back at the office.
    A phrase I run through my head, “I know what I want… I’ll settle for what I can get…” Keeps me creative with good posture and attitude.
    You missed a great session on negotiating at the PSA Annual Conference in Marlow this month – Derek Arden – Mr Negotiator shared lots of great tips and strategies.

  2. derek arden October 18, 2010 at 7:07 pm #

    Preparation, thoughtfulness and suppressing your own EGO. I think this is so true about negotiating. I don’t like the Harvard jargon BATNA – I don’t think many people have a clue what it means unless explained properly. I prefer the alternative position – what you do with the resources if the deal falls through.

    Mark you are bang on the money – keep up the good work

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