Two parties are involved in a negotiation - one accomplishes his/her objective(s) and is satisfied, whilst the other walks away dissatisfied with the result. Does this scenario sound familiar?
Do you often feel displeased with an agreement that you have reached? Have you ever entered into a settlement only to feel regret soon after reaching a settlement?
SUCCESS VS FAILURE
What distinguishes success vs failure in commercial negotiations?
Most of us acknowledge the importance of preparation to deliver success and it is therefore remarkable to note that most commercial negotiators do not spend adequate time preparing for negotiations, often due to poor negotiation training. Professional sports people spend considerably more time preparing for a championship than they spend in competition; should it be any different for commercial negotiators?
THE EVIDENCE
Commercial negotiators only spend about 1/3 as much time planning for negotiation as they in reality spend in negotiation. If you were a professional sports person, this would mean that you applied only 1/3 as much time training & planning as you do competing. The foremost factor to successful business negotiation outcomes is the quality of your planning for the negotiation.
As a matter of negotiation strategy, consider the following top 5 factors of preparation and at the same time you will simultaneously develop your negotiation skills:
1. Understand Yourself
Before we even put into operation best- and leading practice negotiation, it is important that we first invest in understanding our own strengths & weaknesses and it is vital that we make use of personal profiling tools to emphasise our areas of preference within the framework of commercial negotiations, which enables us to have a reference point from which to plot our skills development.
2. Vision
What is the main objective behind the negotiation? Is the negotiation about price or is it about the value that can be added? What are the main motivating issues behind your counterparty's position? What mutual ground, if any, exists between your and your counterparty's vision? It is key to comprehend the drivers or silent motivations behind the positions of all parties to the negotiation and it is only by asking questions that we will discover these interests.
3. Value
What are the most important deal goals being targeted in this negotiation? What are the facts and figures strengthening the negotiation environment? What alternatives does each party have, if any? Once again we should try to recognise, prioritise & weigh the objectives of all parties to the negotiation and only then are we in a position to highlight those goals that are shared and at the same time deal with those objectives that are likely to initiate conflict.
4. Process
Have you spent time thinking about an agenda for your upcoming negotiation? Have you noted all the concessions that you will make & receive? Do you have tools/templates at your disposal to support the effectiveness of the negotiation process.?
5. Relationship
It is easy to forget that we deal with people who have goals & aspirations similar to our own and it is not always just about the facts & figures. The research is clear that people are more likely to deal with those whom they trust & like, than with those with whom they little in common. Try to focus on those elements that you share with your negotiation counterparts, and do not forget to focus on the people.