The best negotiators seek an outcome that benefits both parties rather than having a winner-takes-all attitude, say experts. Here's how to nail your next round of talks.
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As a former investment banker, Simon Kelland has always enjoyed doing a deal.
“I love the complexity of it and the challenge of trying to marshal resources and weave in a strategy with a mutually beneficial outcome,” he says.
However, as chairman of Streamwise Learning and managing partner of negotiation skills training provider Scotwork Australia, he witnesses a lot of negotiating missteps, the most significant of which, he says, is being underprepared.
“Often, people haven’t really thought through what they want as an outcome.
“Failure to define success means that you’re likely to undershoot or overshoot, and then walk away unsatisfied.”
A failure to define success can also stem from spending time mulling over a desired outcome, but with the sole focus being on one’s own side of the bargain.
“When you focus only on your own issues without trying to understand the needs and priorities of the other party, it comes across as confronting and is less likely to succeed,” he says.
In Kelland’s experience, those in professional services tend to take a highly logical approach to negotiations. While this is good in some ways, there can also be pitfalls.
“They may wrongly assume that all they need to do is state the facts, and that once they have done this, the other party will suddenly come to the realisation that they were wrong. However, persuasion is about more than just putting the facts out there,” Kelland says.
Listening is extremely important, agrees Amanda Williams, senior client partner, financial services, at global consulting firm Korn Ferry, although it is often in short supply during negotiations.
“The number one skill you need in negotiations is listening – and not listening is the number one mistake people make. The danger of not listening is that you don’t know where the other party is coming from, so you can’t mould your argument to get a win-win solution.”
It's not meant to be adversarial
Yet aren’t business negotiations about producing a winner and loser? Not at all, say experts – at least not if an ongoing relationship with the other party is valued.
Negotiation theory sets out two types of negotiation: transactional and mutual gain. In the case of the former, there is most definitely a clear winner and loser.
“You don’t need a lot of skill to be the winner of a transactional negotiation, you just need a lot of power.
“If you have a lot of pricing power in a negotiation, you can simply say, ‘Take it or leave it’. But the consequence of that is that there’s no relationship,” Kelland says.
When asked whether this is the type of negotiating property tycoon and former US President Donald Trump, author of The Art of the Deal, excels at, Kelland’s reply is diplomatic.
“The number one skill you need in negotiations is listening... The danger of not listening is that you don’t know where the other party is coming from, so you can’t mould your argument to get a win-win solution.” Amanda Williams, Korn Ferry
“I’ve only read excerpts of the book. I would just say that some industries are more focused on transactional negotiations, and property development is one of them.”
When it comes to con artists, who are clearly out for their own gain at the expense of others, Kelland says there are a couple of things we can still learn from their success.
“What is it that makes con artists successful? In a word, it is confidence.
“Another thing that con artists do naturally is win trust, and they win it quickly.”
That may be where the lesson ends, however. “Con artists don’t have a conscience. They’re psychopathic and don’t care about the other party, so the truth of what they are saying is unimportant to them,” Kelland says.
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Be upfront and stay calm
When making concessions for a mutually beneficially result, how do you know when to be flexible and when to stand your ground?
It helps if both parties begin discussions by setting out the areas of least flexibility. This prevents time being wasted on pointless back and forth.
For each point, be prepared to either agree, trade it for something else, or reject it and move on. There may be wiggle room at the end of the conversation, and simply arguing a point ad nauseum will get the discussion nowhere.
When it comes to salary negotiations, Kara Atkinson, chief executive officer at Sydney based The Sales Recruiter, says that well considered concessions are often key.
Atkinson recently worked with a job candidate who wasn’t satisfied with the first job offer he received. He asked Atkinson to go back and ask for a company car, changes to the bonus structure and a higher relocation fee.
“I told him we needed to work out what we were going to give to get those things in return. It didn’t matter so much what those things were – it was about not having a scale that was completely weighted to our side,” she explains.
“He changed a few things that were minimal in his eyes, such as his start date and probationary period. By conceding first, the other party is automatically more inclined to give back.”
However, should things get heated, consider taking a short break. This also provides a great opportunity for a huddle with other members of your negotiating team.
“If the tone of the negotiation becomes emotional, you’ve lost,” Williams says. “I know from my own experience that when people become aggressive or unreasonable, I become calmer.
My perception is that there is usually something underpinning it, whether they are unsure of their position or there is some other insecurity.”
Not every negotiation will be deemed a success, but by entering a negotiation with a spirit of goodwill and even generosity, success becomes a more likely result.