Negotiation: 8 ways to be a better negotiator

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Negotiation - 8 ways to be a better negotiator

Need to brush up on your persuasive powers to secure better deals? Here are some expert tips on niftier negotiation…

It is one of the deadliest weapons in the business leader’s arsenal, and yet arguably the most neglected: negotiation, the art of gleaning the maximum value for your organisation en route to finding mutually acceptable deals in discussion with clients, partners, suppliers or stakeholders.

And there’s more to it than dogged determination, crafty mind games or the fabled ‘gift of the gab’. Just ask Steve Gates, founder and CEO of The Gap Partnership – a consultancy and training agency which has been honing the negotiation skills of senior personnel from the likes of Heineken and House of Fraser. Here he offers eight tips guaranteed to make leaders value clinchers rather than compromisers…

1. Plan meticulously

Gates says: “I’ve worked with many clients who fall into the trap of approaching negotiation thinking they can wing it. You need to assess all the variables and study issues around risk and exclusivity well in advance. Have you created room for manoeuvre? Do you know what the deal-breakers are?”

2. Assess the power balance

“Understanding the actual balance of power between you and your counterpart – as opposed to any assumed balance of power – means digesting factors such as the time constraints that exist, supply and demand, what challenges the other party faces if this deal goes flat, what options they have, what the implications are of exercising them… How creative, collaborative or demanding you can be will depend on how much power you have to exercise – when viewed from the inside of the other party’s head.”

3. Be comfortably uncomfortable

“We use a lot of negotiation programmes, and I call them ‘exercises in self-awareness’. You have to stay focused and stick to the plan. Think before you speak. Negotiation is uncomfortable – you can feel inclined to talk a lot or start selling, justifying, explaining your reasoning and creating problems for yourself. It’s about being in charge. You have to recognise that talking when you don’t know what you’re going to say is only going to involve giving away information.

“Become controlled and considered, or you’ll become a danger to yourself. If you’re dealing with a trained, experienced negotiator, they will be watching and listening to absolutely everything, and working on the basis that everything that happens in that room will happen for a reason. Don’t try to relax – most people don’t find negotiation comfortable. Instead, try to become comfortable with being uncomfortable.”

4. Don’t obsess over fairness

“Now, there’s nothing wrong with being fair – so long as you’re not paying for fairness with unnecessary concessions. A lot of people will say: “Well you’re here, I’m there, let’s go 50/50 down the middle. A top negotiator will think: ‘Well, if they’re prepared to go 50/50, what could I trade instead that gives them the same level of satisfaction, but without it costing me that 50 per cent of the difference?’ They will try to re-engineer. I’m not saying be hard or difficult – but the obvious way of reaching an agreement presented isn’t always the optimal one. Good negotiators will stop, think and say: ‘Actually, there’s another way around this.’ Ineffectual negotiators will just jump at it and be grateful to be closing the deal.”

5. Consider the whole picture

“I’ve seen many people trying to negotiate deals by moving around on singular variables, such as payment terms, lease periods and margin levels. Why not link the variables? Negotiation is like fitting a jigsaw together – not playing around with a single piece. Let’s say a senior director in a company is ‘let go’ six months into their employment, at great expense. They had been headhunted and supplied by a recruitment agency. Wishing to minimise risk, the HR director of the company meets up with the recruitment agency. They highlight the costs incurred and how often they had used the agency. The HR director then proposes a 12-month ‘replace-for-free’ clause (not in the original contract) while conceding 20 per cent additional fee for the recruitment agency, subject to the successful replacement candidate achieving all their objectives in their first year.”

6. Take frustration in your stride

“A good negotiator will see their counterpart saying ‘I can’t go that far’ or ‘what you’re proposing just isn’t on the cards’ as simply a part of the process, rather than a signal to capitulate. The fact that they are still talking to you means there is still some interest – so keep the dialogue going. Find ways around hurdles. Look not at what they won’t do but at what they will do. Ask questions like ‘how close to that can you come?’ and ‘what is causing that problem?’ It can be frustrating, but good negotiators take frustration in their stride. An effective negotiator has a ‘How?’ mentality.”

7. Ditch the ego

“The other party may have some big asks as part of their tactical plan, and you often have to offer them what we refer to as the symbols of success – letting them ‘win’ while you focus on the value of the agreement. It’s about managing egos. We need a certain amount of humility and maturity to do that. Otherwise both of you become competitive, and it gets rather messy.”

8. Keep it real

“There are a lot of tactics that get used in negotiation – dirty tricks such as the good cop/bad cop dynamic, going quiet on you for days and so on. They’re especially prevalent in one-off deals. We don’t recommend you use them because they’re pretty transparent, erode trust in your business relationships and make people feel exploited. It’s just gamesmanship really. Look out for tactics, and don’t engage in them.”

Negotiation - Steve Gates discusses how to be a better negotiatorVital stats

Firm The Gap Partnership

Founded 1997 by Steve Gates (left)

HQ Berkhamsted, Hertfordshire

Staff 155

Client list Customers have included Heineken, House of Fraser and Bel Brands

Value enhancement offered by effective negotiating
An estimated five to 10 per cent

Number of companies dealt with globally 500

Revenue growth 110 per cent over the last five years

Global offices Four main hubs: UK, North America, Germany and Hong Kong. Plus regional presences in eight other countries

Learn more about the subtle art of negotiation and deal-making at thegappartnership.com

@tgpnegotiation

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About author

Nick Scott

Nick Scott

A former editor-in-chief of The Rake and deputy editor of the Australian edition of GQ, Nick has had features published in titles including Esquire, The Guardian, Observer Sport Monthly and Rolling Stone Australia and is a contributing editor to Director magazine. He has interviewed celebrities including Hugh Jackman, Daniel Craig and Elle Macpherson, as well as business people including Sir Richard Branson, Charles Middleton and Nick Giles and Michael Hayman MBE.

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