Telling the truth about SME life today

How to become a first-class negotiator

The word “negotiation” evokes connotations of difficulty. We assume that negotiations are difficult and require a special innate talent, or that negotiators are always abrasive and robust. Indeed, successful statesmen and entrepreneurs are frequently characterised as tough negotiators regardless of whether there is any evidence of their resilience, subtlety and skill; rather than mere bullying.

But genuinely skilled negotiators don’t need to be bullies, they simply obey the following rules.

Assess the real power balance

The very failing that allows negotiators to impose themselves with undue force often comes from an incorrect assessment by the other party of exactly where power lies.

Curiously, when we ask training course delegates how powerful each is feeling immediately before a buyer-seller negotiation role-play, both parties put their own power at below 50 per cent. 

But once they opened their minds to the possible sources of power and imagined ways to find out more about their strengths and the other party’s weakness, that number rose above 50 per cent. If the Book of Proverbs is right and A man of knowledge increaseth power?, then it’s worth knowing whether there are such dynamics operating in your favour before allowing your negotiating strategy to stand or fall on an incorrect assessment of who holds the better cards. 

Through background work in your preparation stage and skilled questioning at all points of the sales cycle, you can find out situational information that will come back a thousand fold (well, perhaps not quite that much) when you get to the point of set-piece negotiation.

Skilfully denying the other party such information about you – when your quarter-end is; how desperate you are to get a first reference site for a new application; the fact that you need to shift stock quickly before you can refurbish your warehouse – can enhance your own perception of your power and hence the power itself.

Don’t just prepare, plan as well

Successful negotiators spend roughly the same amount of time in the preparation and planning phase of the negotiation as their average counterparts do. Unlike the average practitioners, however, the best negotiators split this phase into two distinct processes: preparation and planning. 

In other words, they begin by doing the number crunching and long-term thinking about what they want to get from the negotiation and what their aims are. Then they work out how to achieve the best possible outcome.

So the first step is to set and articulate your objective and make it as precise as possible. A good objective specifies the final goal of implementation of the agreement and often refers to the overall approach. It will take into account long-term goals well beyond the immediate implementations. Examples of such goals include penetration of a new market, setting of precedents and building relationships. For example: “I want to negotiate a longer contract period for this consultancy project so that I am still on the preferred supplier list when the next RFP comes out.

Then, establish your fallback position. Remember the earlier observations about power. How much each party thinks the other needs to reach a negotiated agreement will influence the fallbacks they choose. If you know that you can sell the same products elsewhere, on acceptable or slightly worse terms than you are hoping for here, then you have a viable fallback. Having some idea of what the other party’s fallback is can also be helpful, but since your assessment will rarely be 100 per cent accurate it is best not to rely on it too heavily.

Negotiate, don’t haggle

Next, identify the negotiable issues and think through how you and the other party prioritise them. If price is the only issue, instead of negotiation it?ll just be haggling. Contract length, payment terms, IP ownership and publicity are all variable issues that I often find myself trading off with clients at these points. It’s always good to be clear about what is most important to you, which are most important to the client and what you’re willing to give in exchange for what. That last consideration knowing your targets and limits and estimating what the other party’s are is something skilled negotiators always do well.

Focus on common ground

If we can analyse where the areas of common ground might be or plan how to establish them then we can concentrate on them in the negotiation meeting itself. Our research shows that skilled negotiators give over three times more attention to areas of overlap than the average ones do. This focus on common ground can help to obtain movement in other areas and enable you to manage the mood and climate in the negotiation.

Drop the poker face

Success will be determined above all by the verbal skills we deploy during a negotiation, assuming that the plan is sound.

Forget the inscrutable poker-faced hard man and don’t meet every proposal with a counter proposal. Jettison your long list of reasons why your offer is fair and reasonable, while staying clear of words like fair and reasonable. According to our research, all of these approaches lead to fewer successful outcomes in major commercial negotiations as this behaviour is less typical of successful negotiators.

Ask questions

Skilled negotiators ask more questions than un-skilled ones partly to add knowledge about the other party’s strengths and weaknesses, and to facilitate a collaborative examination of what aims lie behind the other party’s stated positions. Focus on how you might work together to achieve the same outcome – but at less cost to you. Merely batting a counter proposal back across the net every time the other party suggests something achieves nothing and implies that you aren?t listening.

To prove that you are, use pauses in the discussion to summarise where you have got to and to check your interpretation of what has been said or agreed on so far. This adds structure and ensures that your version of events is accepted as the official one.

Avoid irritators

There are many behavioural misconceptions ingrained in negotiators whose skills and results rarely rise above the mediocre. It is, for instance, best practice to honestly reveal how you feel the negotiations are going. Such specific reactions to specific occurrences during face-to-face negotiation include: “I?m disappointed that you haven?t been able to consider amending your penalty interest rate. It doesn’t pay to use language like, ?this is a reasonable offer?, or ?to be honest, this is the best deal you are likely to get?. We call these irritators. Avoid them.

Although there might be a cultural expectation, expressed in words like ?tough” and ?difficult?, that negotiation is always adversarial and isn’t an easily mastered skill is quite untrue. These skills can be learned and are based around clear evidence. These skills belong to the capable, not just to the tough.

David Freedman is an associate director at behavioural change consultancy Huthwaite International


Related Stories

More From


If you enjoyed this article,
why not join our newsletter?

We promise only quality content, tailored to suit what our readers like to see!