Two people are involved in a negotiation - one reaches his/her objective(s) and is delighted, whilst the other walks away dissatisfied with the outcome. Does this scenario sound familiar?
How often have you felt dissatisfied with a settlement that you have reached? Have you ever entered into a settlement only to feel remorse soon after reaching a settlement?
SUCCESS VS FAILURE
What distinguishes success vs failure in commercial negotiations?
Most of us recognise the significance of preparation to achieve success and it is therefore interesting to note that the majority of business negotiators do not spend sufficient time planning for negotiations, often due to poor negotiation training. Professional sports people spend significantly more time preparing for competition than they spend in competition; should it be any different for commercial negotiators?
THE EVIDENCE
Commercial negotiators only spend more or less 1/3 as much time planning for negotiation as they actually spend in negotiation. If you were a professional sports person, this would mean that you applied only 1/3 as much time training & preparing as you do in competition. The number 1 contributor to successful commercial negotiation results is the quality of your preparation for the negotiation.
As a matter of negotiation strategy, consider the following main 5 factors of preparation and at the same time you will also improve your negotiation skills:
1. Understand Yourself
Before we even apply best- and leading practice negotiation, it is important that we first understand our own strengths & weaknesses and it is vital that we make use of personal profiling tools to highlight 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 fundamental objective behind the negotiation? Is the negotiation about price or is it about the value that can be added? What are the key motivating issues behind your counterparty's position? What mutual ground, if any, exists between your and your counterparty's vision? It is vital 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 key deal objectives being pursued in this negotiation? What are the facts and figures contributing to the negotiation environment? What alternatives does each party have, if any? Once again we should try to identify, rank & weigh the goals of all parties to the negotiation and only then are we in a position to highlight those objectives that are shared and at the same time deal with those objectives that are likely to initiate conflict.
4. Process
Have you spent time preparing an agenda for your upcoming negotiation? Have you noted all the trades that you will make & receive? Do you have tools/templates at your disposal to support the effectiveness of the negotiation cycle.?
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 interests that you share with your negotiation counterparts, and do not forget to focus on the human elements.
Related Articles Useful Sites
