Not all dealmakers are smooth-talking persuaders, and negotiations are not always resolved by the boldest or most charismatic person in the room. As Steve Gates, author of The Negotiation Book, puts it, the ideal of the charismatic dealmaker is something of a myth, along with the idea that a great outcome will be obvious to all at the time an agreement is reached. “Great negotiators tend to be unsung heroes. Great deals become so over time as the contract delivers the value it was intended to offer, rather than necessarily at the time when the deal was completed,” he says.
Detailed preparation will help you recognise whether the discussions, once they get under way, are taking you in the right direction or heading you well and truly off the rails
Like many things in life, negotiation is a skill and, like all skills, it can be learned and practised. The first point to bear in mind is that there can be no doubt of the importance of negotiating skills. A positive negotiated outcome can mean favourable terms in a contract on which the performance of a treasury department hinges. A happy result in a salary negotiation or promotion interview, meanwhile, can advance us individually, so negotiating skills have the potential to be of huge significance both personally and professionally. The second key point around negotiations is that they don’t have to be aggressive affairs. Solid groundwork ahead of time and the ability to keep to parameters that work for you or your organisation are more important than flair or verbal jousting. Further to those points, here are five tips for improving and honing your own negotiating technique:
All practised negotiators start with and recognise the value of preparation. Apart from the sense of assurance it provides at the negotiating table when you can confidently call up facts and figures or swiftly map out desired outcomes, detailed preparation will help you recognise whether the discussions, once they get under way, are taking you in the right direction or heading you well and truly off the rails.
A concrete way to establish those limits is through scenario planning. Before you get anywhere near the negotiating table, you should work out the BATNA – or Best Alternative to a Negotiated Agreement, or what you would do if the deal falls through. It is helpful to list all your variables. These are the aspects of a deal that you can do without or trade mid-discussion without doing too much damage to the outcome. Negotiations, after all, involve making concessions. Modelling different scenarios in advance – such as a salary that is towards the upper limit of the market rate, but with the next review 18 months off rather than 12 – will give you a sense of where your minimum lies and what elements of a deal you can live without.
As part of your preparation, you should have identified your ideal outcome. The negotiating table is the place to set that out clearly and ask for it just as clearly. Be prepared to steer the conversation towards your desired outcomes as much as possible.
The best negotiators leave their egos to one side and base discussions on a principle known as being soft on people, but hard on the issue. An example might be stating: “We understand the market value of these services to be x. Do you think you might be able to better that?” Be prepared to ignore any table thumping or other bad behaviour, and don’t indulge in any of your own. The virtue of this approach is that it avoids a combative, confrontational tone and encourages the other side to open up about what they can realistically achieve or offer.
There is a lot to be said for letting others have the floor and keeping quiet while they make their case. Author and speaker Mike Clayton advocates cultivating the skill of ‘ferocious listening’, waiting before you speak and keeping quiet once you have spoken. “The last most of all,” he says.
Liz Loxton is editor of The Treasurer
This article was taken from The Treasurer magazine. For more great insights, log in to view the full issue or sign up for eAffiliate membership