Your employee walks into your office and says with great determination,
“I need a raise.”
You look up, one eyebrow raised.
“I need to buy a house and there’s no way I can make the payment on my current wage.”
You probably felt an immediate visceral reaction to this statement. The flawed argument is immediately obvious to us. Yet, we do this all the time in boardrooms and in our personal lives.
“We need a change order — we overspent and we’re hurting.”
“I need you to stop peeling oranges that way because it annoys me.”
Here are the two flawed premises that the majority of people base their arguments on that is the reason most negotiations fail:
- The other party should care about how I feel — If I describe my suffering in enough detail, they will agree to what I want (hot tip — they care more about how they feel).
- The other party will be convinced purely by facts — If I’m right and I present all the facts, there is no way they won’t agree (hot tip — human beings aren’t always rational).
A big part of my job involves unpacking projects that have gone wrong and negotiating a solution with the stakeholders — both on our side as well as the client side. And lots of travel. In essence, it involves constantly negotiating in situations where the variables are always changing — the stakes, the people, the time frame and the availability of background information.
Here are some of the tactics I’ve learned about negotiating that get results irrespective of how much the variables change.
Take the time to develop a strategy for negotiation. Preparation counts.
- Identify the opportunity in every situation — Winston Churchill famously said, “Never let a good crisis go to waste.” Too often, we approach negotiations purely from an “Us versus Them” viewpoint or from a perspective of damage control. However, negotiations can often be a catalyst for beneficial change. Start by re-framing the situation — “Can this be an opportunity to access senior leadership on the other side, to introduce new options, to rebuild bad relationships, or to remove an obstructive person/situation?”
- Understand your leverage — In most situations, every person has some leverage. Sure, you screwed up and the client is mad, BUT they are in a time crunch and they need you to finish the project and hiring someone new would take far longer. Understand where you are critical and where you add value and use it to your advantage.
- Understand the rules you need to play by — If you need to ask for more money from your client but their funding system or your contract does not allow it, then asking for it under the existing contract is a waste of time. They can’t give it to you even if they wanted to. Ask yourself — “Is this something my client can say yes to?”
- Don’t negotiate with someone who does not have the authority to say yes — This should be obvious, yet we often fail to confirm this. Years ago, the team I was on continued to work outside of our contracted scope based on a notice to proceed by our client liaison only to realize after sending the invoice that he did not have the authority to approve additional work. It is surprising but true that often times, that person may not even realize the limits of their own authority. Be sure to get things in writing.
- Don’t send someone in who is not the right person to negotiate — This is the flip-side of the point above. You would not send your 12-year-old son to negotiate your power bill so don’t send a junior level person to negotiate a major issue. Recognize the limits of your authority. It is often more effective to bring a senior level person in to negotiate with their senior level person.
- Match personalities — Don’t make the mistake of thinking that people will be swayed purely by facts. Remember, they don’t need a reason not to like you or to say “No”. Know who you are negotiating with and send in someone with a compatible personality. If you know you will be negotiating with a difficult personality, see if you can bypass them or have someone else present. History between two people matters — both in the positive and in the negative.
- Know their “must haves” and “cannot haves” — Understanding these two things is critical to understanding your leverage and where you can add value. This is the most important piece of information to have. Don’t handicap yourself by assuming you already know. Seek a clear answer.
- Know their hot buttons and personal motivations — While the point above involves identifying their hard boundaries in this particular negotiation, this point involves understanding what motivates their decisions in general. If you are trying to save them money when their main concern is protecting their employees, then you are not speaking the same language. Additionally, individual personalities may have their own agenda too — the person you are negotiating may be highly concerned about public visibility or career advancement. This should affect how you frame your proposition.
This is where the sausage gets made, and this part is about achieving alignment between both parties. It is often helpful to follow a process to help to stay focused on the outcome:
- Diffuse emotions — If emotions are present, the first step is to diffuse them. Nothing meaningful or rational can be exchanged until this is achieved. Often the easiest solution is to give the other party a chance to vent and to validate their right to feel that way without defending yourself.
- Highlight things both parties agree on — People often enter into negotiations focused only on points of contention. Foster positive feelings by highlighting areas of alignment to start.
- Describe your value not your needs — Never start a negotiation with “I want”. Instead, start with “You need…”. Frame your desired outcome in terms of the benefit to them.
- Clarify how to get to a “Yes!” — Ask the question, “What would need to happen for you to say yes?”
- Don’t demand respect, earn it — A common negotiation tactic I see is something I call the “Gorilla tactic”. It’s the mistaken belief that if I pound my chest and howl the loudest, I’ll get what I want. I have never seen this produce a good outcome even if initially cowers the other side into saying “Yes”. Instead, I’ve observed that the quickest way to earn respect is to be prepared with data and to provide previous results where what you have suggested has worked.
A good negotiator is only measured by how well she can close the deal. Most people focus too much on the process of negotiation and don’t have a strategy to arrive at a productive outcome. Here are some strategies for closing that have been highly replicable:
- Guide them into the obvious solution — Telling people what to do is usually a bad tactic (in the boardroom or in life). Instead, it is often better to lead people into an obvious conclusion by asking leading questions — e.g. “I agree with your thinking. How do you think we should manage x issue?”
“Diplomacy is the art of letting someone else have your way.” — Sir David Frost
- Understand the concept of “saving face” — If your solution involves some admission of fault on your client’s end, help them come up with a plausible way to deliver the news to their management that is palatable to them.
- Try to phrase the outcome you desire as a Yes or No proposition — Anyone who has been in the corporate world understands how difficult it is to create a meaningful outcome from meetings irrespective of how productive or friendly it was. Try to frame it as something they can simply say “yes or no” to rather than an amorphous statement. For example, instead of saying “Let’s try to communicate better and try to resolve issues faster?”, say “Can we develop a procedure for escalation and have a live register of issues?”
- Have gradations of yes — When I first started out as a young consultant, it was often hard to convince a new client to give me a large contract. Rather than an all or nothing answer, I would often try to get them to commit to a smaller contract. For example, asking to try out a solution on a single site instead of a full program, offering to do a pilot, or offering a three month probation period. This is akin to businesses providing samples or a generous return policy so customers can try before they buy. This works because the quickest way to gain trust or change minds is with results. Do the first piece well, and future yeses will come easier.
For the future
One of the most important lessons I’ve learned is that the situation leading up to the negotiation has a significant impact on the outcome (e.g. how much bad blood has already been spilled before you get to the negotiation table). So, it’s important to bear the next points in mind to help future negotiations go easier.
- Start negotiations early — Negotiations are like taxes, if you know you’re going to need to do it regardless, it’s best to do them as soon as possible. We often negotiate when the damage has been done as opposed to when we sense there might be damage coming. By that point, you’ve made people angry and lost all leverage.
- Build relationships — Most people view negotiations as a single event but the truth is the outcome of a negotiation has sometimes been determined way before. There is often nothing you can do in a few hours of negotiation if the relationship is toxic and totally lacking in trust. Conversely, sometimes you need to do very little if there is a strong component of collaboration between the two parties. Invest in always building and maintaining a strong foundation of trust and integrity in your key relationships so that negotiations not only become painless, but maybe even obsolete. If people believe you have their best interests at heart, they generally want to agree with you.
Remember, at the end of the day — you need to win the person, not win the facts. Don’t go in wanting to be right, stay focused on the outcome.
A successful negotiation is when both parties walk away feeling good. Use negotiations as a valuable event in building relationships.
“Let us never negotiate out of fear. But let us never fear to negotiate.” — John F. Kennedy