To be a successful negotiator, it’s imperative that you just do your homework.
Fisher and Ury suggest that you simply spend about half the time you spend negotiating on preparing for the negotiation.
Ideal Meeting Location
Once you have got established a relationship with someone or have negotiated thereupon party before, you will feel comfortable negotiating over the phonephone. Otherwise, conducting the meeting nose to nose would be better than over the phone because it’ll offer you the chance to watch the opposite person’s visual communication and maintain eye contact.
If you opt to satisfy nose to nose, offer to fulfill at your office if possible. Not only will you’re feeling lighter in your office, but you also are ready to get quicker approval from senior people (if necessary); and it gives you the house advantage. the most advantage of meeting at the opposite side’s offices is that you simply can withhold information until you come to your office. Of course, if neither party is willing to conform to meet at either office, you’ll be able to always meet at a neutral location.
Evaluate Your Negotiation Style
Before you’ll improve your negotiation style, you must consider evaluating your current style and your personality. considering the previous few negotiations you participated in, what tactics does one think were successful? In what areas does one think you’ll improve? Would you say you used hard or soft bargaining techniques? Did you tend to be direct or indirect in your negotiation dealings? What would you say are your hot buttons? If you think that about how you react in numerous situations and what your turn-ons and turnoffs are, you may be better prepared to handle yourself professionally while maintaining your composure during your next negotiation. And this could be a bonus when coping with people whose tempers get the simplest of them.
Establish Your Goals and Objectives
You need to see your primary goal and objectives—that is, what you wish to urge out of the negotiation. Your primary goal should be realistic and accessible. Let’s say your main goal is to rent a replacement office manager. it’s unrealistic to assume that you just are ready to hire an office manager at $0 p.a. and no benefits. you ought to expand your main goal to incorporate other objectives. for instance, you’d prefer to hire a replacement office manager and pay $4,000 per month and 75 percent of health and dental insurance, offer 10 days of vacation and 5 days of sick time for the primary year, and match up to three percent of salary within the company’s 401(k) plan.
Research the Other Team’s Members and Personalities
Once you have got established your goals and objectives and people of the opposite party, the following step in preparing for negotiation is gathering the maximum amount information as you’ll be able to about the opposing party’s personalities. If you are doing not have a relationship with them already, begin to determine one by putting in a gathering or two before the negotiation. Perhaps you’ll meet informally over lunch one afternoon. If you’re unable to fulfill together with your counterparts before the negotiation, consider calling their assistants to seek out out more information regarding the way to make them comfortable during the negotiation. Ask their assistants what they wish to eat and drink in order that you’ll be able to have things prepared at the time of the negotiation.
Also give some thought to how you may get their attention at the beginning of the negotiation meeting. What does one have in common with them?
Perhaps you both prefer to hike and you’ll discuss trails you’ve got hiked recently. What do they wish to do for fun? If they wish to play tennis, you’ll ask about the last game they played or how well they played. otherwise you could state the newest lawn tennis tournament that you simply recently saw on television. this is often a good thanks to get their attention before you start negotiating.
Do you think the opposite side uses a tough or soft bargaining strategy?
Can you trust them? How long do they anticipate the method will take? does one know anyone at home with a member of the other team who can provide you with some information about them? What makes them tick? Are they impatient? Demanding? How long do they anticipate this process to take?
The more you recognize about the people on the opposite side, the more prepared you may be for the negotiation. and also the more prepared you are, the more confident you may be because you may know what to expect.
Make a listing of Assumptions
Skilled negotiators realize that folks sometimes have mistaken assumptions that they believe to be facts. When negotiating with another party for the primary time, we’ve to create certain assumptions on what a number of their visual communication, expressions, or phrases mean.
Ask for clarification! Don’t assume anything. Make a listing of assumptions to rouse the negotiation and clarify any points that are unclear or uncertain.
Gather Facts and Conduct Research
The next step involves gathering the maximum amount information as you’ll be able to about the topic of the negotiation. Let’s say that you just own a pizza restaurant and you’re negotiating prices with the owner who owns the building during which you use your restaurant. to steer the other side that you just are inquiring for something that’s reasonable, you need to provide supporting data.
For example, if you’d prefer to renew your lease at the identical price you paid the previous year, you’d must prove why it would be unfair of your landlord to extend your rent. Research regarding land prices in similar buildings located within the surrounding area of your restaurant, restaurant occupancy rates in your city, the amount of latest restaurant openings within the past year in your city, and also the average increase in rent in your city would be some topics worth researching before the negotiation. you’ll find this sort of data on the net, by inquiring for assistance at your local people library, by talking to an area assets leasing agent, or by meeting with other building owners in your area. you’ll also want to seek out out about what the present issues are within the property industry. in a different way to urge the newest news and data regarding the 000 estate industry is to read trade publications or visit the net sites of property trade associations for current articles.
Focus on the Other Side’s Interests Rather Than Stated Positions
It is nearly always in your best interest to seek out a win-win solution for both parties, to finish a negotiation knowing that either side are satisfied with the results. If the opposite party is dissatisfied, it can have negative consequences for you. for instance, if a customer feels he was cheated, you may lose her as a customer and maybe future customers thanks to her negative comments. If a replacement hire feels cheated out of an improved salary, he may quit his job during a few months when he finds something else that pays more after you only invested time and money in training him. Leaving the opposite side feeling disgruntled, cheated, or deceived destroys relationships, which may be risky for your business.
The next step in preparing for negotiation is to imagine that you just have to negotiate for the opposite side and develop a listing of questions you must ask them. Put yourself in their shoes and do their homework.
What questions will they ask your team? Be prepared to answer them. Although it looks as if the foremost important question to ask the other side is what they require, Roger Fisher states that there’s another even more crucial question that appears at the underlying interests of the opposite party. Why do they require what they want? Walk a mile in their shoes and determine what you think that motivates their stated positions.
You may already be aware of this story, but imagine that one of your coworkers, Lisa, finds a bag of 30 oranges on sale at a neighborhood foodstuff. She needs only 10 of them so she brings the remaining 20 oranges to the office to share with anyone who wants them. Both Karen and Anna decide they require them. After negotiating for some minutes, they plan to each clear 10 oranges.
However, if they’d focused on their interests (one wants just the peels and therefore the other wants only the juice) rather than their stated positions (wanting the oranges), they’d are ready to share the 20 oranges and achieve their goals. Karen wanted the oranges so she could squeeze fresh fruit juice in her juicer. Anna wanted the oranges so she could grate the orange peels for an orange muffin recipe.
Since neither side asked the opposing side why she wanted the oranges, both Karen and Anna had to form a visit to the supermarket.
Anna’s recipe immersed the rinds of 20 oranges and Karen needed enough juice for her family of 5 for breakfast, which also required the juice from 20 oranges. If that they had focused on interests, they would not each have had to create a visit to the market, and therefore the peels of
Karen’s oranges and also the fruit juice from Anna’s oranges wouldn’t have been wasted.
Don’t assume that each party’s interests and motivations revolve around money. Let’s assume that you just own alittle research firm and are trying to find a replacement project manager. you’ve got completed the interviews and are within the process of negotiating a proposal with a prospective candidate. once you offer him a salary of $50,000 a year, he states that he thinks you must offer him $55,000. once you ask him why he thinks he deserves $5,000 quite you offered him, you realize that cash isn’t what’s motivating him. He feels he should get an additional $5,000 reciprocally for settling for the title of project manager. He has 10 years of project management experience and thinks he should have the title of project director rather than project manager. he’s considering applying to an executive MBA evening program at the local university and feels that the title of project director would be viewed more favorably by the university. Once he has shared his true interests with you, you comply with give him the title of project director and comply with pay your new project director a salary of $50,000 a year.
Consider this example:
Boss: supported our conversations over the past few days, I would like to extend a proposal to you for $44,000 a year plus 10 days of vacation time and 5 sick days.
Employee:Well, I’m visiting be honest and say that i’m a touch surprised. I was expecting the offer to be closer to the $50,000 salary range.
Boss: Why were you expecting a suggestion of roughly $50,000?
Employee: Well, since i’ve got been freelancing for the past few years, i’ve got grown familiar with having longer to travel on vacations. I work effortlessly for many of the year but i’m also able to take some weeks at a time to travel abroad. I will be unable to try to to much traveling if i’ve got only fortnight of vacation time a year. So if I won’t be able to travel the maximum amount, I should a minimum of make more cash.
Boss: I see. How about this? I’ll contribute an additional week of vacation for the following three years so you’ll have 15 days of vacation time. additionally to those 15 days of vacation time, you will have 5 days of sick time. If you are doing not get sick during the year, you’ll be able to use them as vacation days during the last quarter of the year. So, you’ll have up to twenty vacation days your first three years! And, if you’re employed with me for three years, I’ll increase that to twenty vacation days plus 5 sick days. And, once 1 / 4, you’ll work 10 hours either Monday through Thursday or Tuesday through Friday and take an extended weekend off. i believe that sounds fair. What do you think?
Employee: i believe I’ll accept the offer—$44,000 sounds good as long as i’ve got enough vacation time to travel.
Boss: Great, welcome aboard then!
At first glance it’s going to appear that both parties want completely different things and haven’t any interests in common. However, once you start to consider what motivates the opposite team and what their goals are, you may notice that sometimes both teams have more shared interests than opposing ones. Let’s return to the instance about the little marketing research firm owner and also the newly hired project director.
You, because the business owner, and your new employee have some interests in common. First, you both want the corporate to perform well.
You both depend on your company’s sales to support your families. Second, you both want stability. You, the owner, want your company to grow and would love to stay your valuable employees; you are doing not want to lose them to the competition, so you offer them competitive salaries, vacation time, and benefits. Your new project director is additionally looking for job security. He doesn’t want to own to change jobs and move his family every few years to urge a competitive salary and benefits. Third, you’re both inquisitive about maintaining a decent relationship with one another. you wish your employee to be proud of his job so that he stays around, and your project director wants to be able to use you as a reference or for networking possibilities within the future.
Use Objective Standards
In order to convince the opposite party that what you’re inquiring for is fair and reasonable, try and use objective standards whenever possible.
If you’re within the negotiation process with a prospective candidate, you will want to pay her as little as possible and she or he will want to earn the maximum amount as possible. instead of feeling that the opposite party is trying to tear you off and haggling back and forth, the best solution is to use an independent objective standard. Independent objective standards may include market price, cost, depreciated value, competitive prices, precedents for similar cases, scientific judgment, professional standards, moral or ethical standards, or government standards. you’ll be able to also speak to experts in the field to be told what’s considered fair market price for whatever goods or services the negotiation is about. Using objective standards can reduce the quantity of your time it takes to conclude a negotiation because they’re more likely to be accepted by the opposite party as a good and reasonable offer.
If the opposite party offers to pay or accept a particular amount, always ask how they found out that specific number. Did they use an objective standard? If so, which one? If not, suggest one be utilized in order to eliminate bias and be fair, and to form a win-win situation for both parties. If they’re unable to produce you with details for a way they arrived at that quantity and refuse to budge, you ought to seriously consider to conform to disagree and not negotiate. If, however, the price seems fair and relies on a trustworthy objective standard, be willing to be open-minded when confronted with an inexpensive offer. Think about the subsequent example:
Doctor: i’m pleased to inform you that I met with everyone you interviewed with and would love to increase you a proposal of $45,000 annually as your salary.
Employee: How did you gain that quantity exactly?
Doctor: Well, we predict it’s a really fair salary. in line with our human resources department, the typical salary paid to pediatric nurses together with your level of experience during this city is $43,789. Not only can we pay slightly quite average, but we also offer additional benefits. While most doctors offer their nurses fortnight of vacation, we might offer you three. you’d even be able to begin contributing to your 401(k) plan immediately instead of anticipating six months as in many other offices. Additionally, the overwhelming majority of our nurses are with us for over 10 years. The average tenure at our office for nurses is 14.5 years. And every year for the past five years, we’ve got been working with a research firm to conduct an employee satisfaction survey. in line with last year’s results, 92 percent of our employees are either satisfied or very satisfied with their jobs, 94 percent with the advantages, and 90 percent with their bosses. we actually value our employees here and that i think they recognize that.
Employee: appears like once nurses are hired at your office, they don’t want to figure anywhere else.
Doctor: Exactly. we’ve one in all the best retention rates within the city for nurses.
Employee:Well, now that you simply explained how happy your employees are, i believe i’d prefer to work here furthermore.
Doctor: I’m glad to listen to it. I’ll notify the human resources department and have them send your paperwork by the top of the day. you must receive it by the top of the week.
Generate Options That Meet Interests of Both Parties
Once you’ve got found out what the opposing party really wants, you can start to develop a listing of creative options that meets the interests of both parties. Remember, if you meet only your own interests, you risk alienating the opposite party and therefore the possibility that they’re going to lose their patience and go away.
You may want to contemplate Fisher and Ury’s suggestion of holding a brainstorming session with five to seven colleagues off-site with a facilitator to generate a comprehensive list of ideas. Have the facilitator display the ideas on an easel or whiteboard and record all ideas mentioned, realistic or not. Remind all participants that every one ideas should provide a win-win solution for either side. The unrealistic ideas will be tossed out when the group meets again before the negotiation to pick the best ideas which will be discussed during the negotiation.
Make sure that every one the ideas selected meet the subsequent basic human needs that motivate the positions people choose in order that you’ll reach mutual agreement more quickly:
✔ Risk reduction and security—job security.
✔ Sense of belonging—fitting in reception and at work with specific roles and responsibilities.
✔ Economic security—being ready to afford basic necessities (food, shelter, etc.).
✔ Recognition and approval—feeling valued for accomplishing challenging work.
✔ Control over one’s life—managing, organizing, and running one’s life within the desired way.
Consider this next example:
Employee: thanks for agreeing to satisfy with me to debate my raise for next year.
Boss: i need you to grasp that i feel you’re an asset to my company and I appreciate everything you are doing around here. I think your review went well this year, and that i have decided to give you an 8 percent raise for all of your exertions.
Employee: I appreciate the 8 percent but i’ve got to mention that i used to be hoping for 15 percent.
Boss: Please tell me why you were hoping for 15 percent.
Employee: Well, i actually like my job but it’s expensive to stay my kids in day care from 3:30 to 5:30 a day. i used to be hoping for a 15 percent raise so I can carry on with the rising costs of day care.
Boss: I’ll tell you what I can do. What about letting you’re employed flexible hours? Maybe you’ll work from 6:30 A.M. to 3:00 P.M. each weekday with a 30-minute lunch. this fashion you’ll be able to still work 40 hours per week and be place time to require care of your kids once they fall into place from school. Not only would you get to spend more quality time together with your kids, but you furthermore may wouldn’t need to send them to day care.
Employee: Wow, that’s an excellent idea. The 8 percent raise sounds fine. Thank you.
The boss was able to meet his own needs of desperate to give his employee a raise of 8 percent and people of his employee by solving his day-care boost problems, leaving both parties feeling that they’d won.
Determine Your BATNA
In order to barter better, you need to determine what your BATNA is prior to negotiating. BATNA, first coined by Fisher and Ury, stands for “best alternative to a negotiated agreement.” If you’re unable to succeed in an agreement with the opposite party, what’s your next best option?
Knowing your BATNA helps you to choose at what point the deal the other side is offering you is not any longer beneficial to you. Remember, the entire point of negotiating with someone is to urge something better than what you’d get without negotiating. So, you ought to consider sealing a deal providing you’re able to start ahead.
For example, let’s say you own atiny low agency and are looking for a seasoned customer’s broker for one in every of your largest accounts.
You are within the process of negotiating a proposal with the leading candidate. Generate an inventory of as many alternatives as you’ll be able to consider for not hiring this candidate so pick the one option that seems to be the most effective. Bear in mind that you just have a stronger position if your BATNA is to rent a freelancer who wont to be an employee of your company until a permanent employee is hired. This person would require little or no training since she is acquainted with how your company does things and would be ready to produce work immediately. If, however, you have got no other prospects in mind, must advertise the position to come up with resumes, and therefore the official start date of the project is next week, you’ve got a weaker BATNA.
Once you have got determined your BATNA, you ought to consider the BATNA of the opposite party, keeping in mind that the party with the stronger BATNA tends to be the more powerful party within the negotiation process. If the potential candidate you’re inquisitive about hiring has another job, she contains a more powerful BATNA than if her competition alternative is to stay unemployed for an indefinite amount of your time until another suitable job is obtainable. If both parties have strong BATNAs, the most effective solution could also be to not negotiate with one another and instead negotiate with other parties or not in any respect.