How to... Get the Best Deal in NegotiationsPosted in : How To... with Dr. Gerry McMahon on 23 January 2017
In Ireland’s post-austerity era, with the pay round producing rises of between 2 and almost 4%, senior executives pushing for bigger packages and the Labour Court’s recommendation in the Freshways case under the ‘right to bargain’ provisions of the Industrial Relations (Amendment) Act 2015 causing tremors in the non-union sector, the art of negotiation has returned to centre stage. For some Human Resource professionals, this is a formidable challenge. But it doesn’t have to be!
You are a negotiator. In fact, you’ve been negotiating since you first looked for pocket money, swapped toys or cried in the cot! That is, you’ve always engaged in purposeful persuasion and constructive compromise.
Though the key criteria for successful negotiations are information and power, to get the best deal, there are some ‘unwritten rules’ that should be noted.
Firstly, agreement is the aim. However, the wish of both parties to reach a mutually satisfactory conclusion does not preclude the use of threats, sanctions and associated tactics like attacks, hard words and (controlled) losses of temper.
Another tactic extensively deployed is the ‘off-the-record’ discussion. This is a means of ‘feeling the way’, probing attitudes and intentions and smoothing the way to a settlement. It is also important that each party is given an opportunity to state their (opening) position - which they will move from, as the negotiations proceed via alternate offers and counter-offers, eventually leading to a settlement.
To enable progress, concessions made are not withdrawn. Nor are firm offers withdrawn, although it is legitimate to make and withdraw conditional offers.
To smooth the process, adjournments are taken by mutual agreement, serving the purpose of reviewing progress against one’s objectives and assessing your counterpart’s objectives or latest offer\proposal. That is, adjournments provide an opportunity to update strategy.
It is also an ‘unwritten rule’ that third parties are not engaged until both parties are agreed that no further progress can be made. Whatever the stakes, you’ll get the best deal if you break the negotiation process into four stages: Preparing, Opening, Negotiating and Closing.
The key at the preparatory stage is to establish one’s objectives and to assign them relative priorities. This process also entails:
- the ideal settlement point you would like to reach;
- the minimum you will accept or the maximum you’re prepared to concede;
- the opening claim\offer which will help you achieve your target and provide sufficient room to manoeuvre in pursuit of your target. The difference between the ‘claim’ and the ‘offer’ is the negotiating range.
Thereafter, the good negotiator decides: (a) the ideal route or stages to be followed in moving from the opening to the closing position and (b) the negotiation package or items that one is prepared to trade in pursuit of his\her goal(s). That is, at this preparatory stage you decide what needs to be achieved and how to achieve it. Good preparation also involves assembling all relevant information and structuring it in a logical manner. Identify your strengths, including the facts to support your case. Support for your negotiating position may also be derived from an existing or previous agreement, comparator norms, custom and practice, previous statements from opponents and hard evidence. The good negotiator will also know the main weaknesses in his\her position. As one’s negotiation counterpart is likely to raise these points, prepared responses are essential. Now you’re ready to enter the fray.
The main purpose of the opening stage is to reveal the broad outline of one’s position, whilst gathering as much information as possible about your counterpart’s. The more extreme the opening positions, the more time and effort it will take to discover if agreement is possible. To keep your negotiation partner ‘at the table’ it is advisable to open realistically, before challenging their position, exploring their attitude(s), asking questions, observing behaviour and - above all – listening. This should enable one to assess their strengths and weaknesses, tactics and the extent to which they may be bluffing. One should make no concessions at this stage.
After the opening moves, the main bargaining phase begins. Now the gap is narrowed, as parties persuade the other side that their case is strong enough to force him\her to move. This negotiating stage is about exchanging - something gained for something given. Ideally, something relatively unimportant or cheap to you is traded in exchange for something that is valuable to you. This is the most intense stage of the process. The best way to avoid disaster is to lead with conditions: ‘If you will do this then I will consider doing that’.
The key words to remember are: ‘if . . . then . . .’, becoming: ‘If I concede x then I expect you to concede y’. Related to this, good negotiators negotiate on the whole package, refusing to allow their opponent to pick them off item by item. They prefer to extract the maximum benefit from any potential trade-offs at the final hurdle.
When and how one closes negotiations is a matter of judgement, and depends on the assessment of the strength of both cases. Standard techniques include:
- Make a concession from the package, preferably a minor one, which is traded off against an agreement to settle: ‘If you agree to settle at x, then we’ll concede y.’
- Do a deal (e.g. split the difference, introduce something new such as extending\ shortening the settlement time-scale, agree to back payments, phase increases, make a joint declaration of intent to do something in the future (e.g. a productivity plan).
- Summarise what has happened to date, emphasise the concessions made and the extent to which you have moved, stating that you have reached your final position. But never make a ‘final offer’ unless you mean it.
- Apply pressure (e.g. a threat of dire consequences if your final offer isn’t accepted).
- Give your opponent a choice between two courses of action: ‘You can have x o y, but not x and y’.
This closing stage is a dangerous time for negotiators. If one is keen to get agreement, it is easy to neglect the finer details of that agreement. This can cause problems subsequently when the agreement is implemented and each side has its own interpretation of what was agreed. So the final agreement should mean exactly what it says.
It should also be borne in mind that while a successful outcome is important, so also is the maintenance of the relationship between the parties. Hence, one’s negotiation ‘opponent’ can become one’s ‘partner’. This helps when problems arise at the negotiation table, as progress is more easily achieved when parties have a good relationship, based on mutual respect and trust.
Successful Negotiating Skills: Getting to Yes
Dr. Gerry McMahon is delivering our practical negotiating skills workshop on 21st September at the Radisson Blu Hotel, Dublin Airport. Book before Friday 4th August to get the Early Bird Rate. More information is available on our Successful Negotiating Skills: Getting to Yes page.This article is correct at 23/01/2017
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