Are your prices negotiable?
‘Are your prices negotiable?’
‘That depends on what you’ve got to negotiate with?
This exchange was relayed to me by a negotiation skills trainer at the end of a day’s training. He was describing a phone call he’d taken from what I’ve always thought must have been a brave HR manager on the other line. I remember this course fondly, and not just for the memorable moment I was caught on camera pointing my finger at a colleague while saying, in an angry voice, ‘Don’t point your finger at me!’
Like all training courses, I learned as much about myself as I did the subject I was being trained in. This was a course run for the managers of a large company. We were all in our twenties and thirties and ultra-competitive. It couldn’t have been set up any better to demonstrate the main point the trainers wanted to make. In each training exercise, all we wanted was to beat each other. Each scenario played out in much the same way – a classic win-lose scenario. The point the trainer repeatedly wanted to illustrate was that, in business, where continuing relationships are important, a win-win negotiation strategy will always give you better outcomes. Any fool attempting to test this theory in our group was quickly met with disrespect and aggression, thereby helping the trainer demonstrate the downside of our macho approach yet again. It was great fun.
Most people’s experience of negotiation is in scenarios such as getting some compensation after there has been some sort of slip-up, or when buying a big ticket item such as a car or a house. I have observed that people who are successful in this technique, have a calm but assured / knowledgeable tone in their voice. They seem to describe the problem and the solution in the same sentence, and with confidence, making it ‘easy’ for the other side to give them what they want. Where I’ve seen it fail is with people who get angry or were ‘trying it on’ in the first place.
Business negotiation is different. In a rare case in which I entered a win-lose negotiation, I emerged with what I wanted: a large deduction from a major contract. It was regarded by my side as a ‘win’ but it came at a significant cost. The person responsible at board level for this contract on the other side was someone I had a lot of respect for, liked, and wanted to work with again. During the course of a negotiation with his boss, the CEO of a global business, it became clear this person had taken a reputational ‘hit’ in his company as a result of the difficulties experienced in this contract. The work was subsequently completed satisfactorily, everyone went home with their reputations in tact, but my relationship with this person was damaged. It happened three years ago. I may wish to work with him again so the jury is out as to whether the outcome of this negotiation was a success for me, personally.
Anyway, by the time you’re at the cut and thrust of facing off across a table, most of the opportunity for negotiation has already passed. At that stage, the sharpest tool you have available to you is your personality. Success in business negotiation is normally determined before you enter the room, when you have a broader range of tools to deploy. Whatever the subject under negotiation, you need to have done your homework. Specifically, researching the other side. You need to know what’s important to them and what’s not. If your research has all been focused on your side of the argument, you’re negotiating with one hand behind your back. As the quote at the top suggests, you need to know what you have to negotiate with. If the negotiation is with a supplier, there’s a basic rule which is ignored in a surprisingly large number of cases. Make sure you tender the work properly, with all bidders knowing they are in competition. If you’ve ever prepared a tender, you’ll know that suppliers sharpen their pencil much more when in competition. Some people balk at tendering, believing it will slow things down. That’s not the case. Even in a complex tender, it can take just a week to prepare the tender documents and, say, three weeks to brief the suppliers, receive back their bids and hold selection interviews. If you are well organised, it need not take long, and the benefits, in terms of value for money, are well worth the time it takes.
When in the middle of the cut and thrust however, there’s one golden rule: keep the negotiation moving, never let it lapse. Don’t go away ‘and think about it’. Never leave the table with no proposal on it. For every proposal made by the other side that you don’t like, make a counter-proposal as quickly as possible. During the end-game, you must never allow the negotiation to stop unless you are certain – certain – there is no common ground. It almost always takes several rounds of proposal, counter-proposal before it becomes clear there is no common ground. Only then should you take it or leave it.
If you are British, you come to each negotiation with a cultural handicap: directness makes you uncomfortable. I sometimes think we underperform in negotiations because it seems impolite. Everyone else in the world says ‘I want'; we say ‘Can I have.’ This roundabout language we use is no help in a negotiation.