The Fundamentals of Negotiation

Negotiation is about strategy, organisation, and creativity. It’s a discussion where the goal is to create a mutually beneficial agreement between two or more parties that both sides find acceptable. Whether you’re negotiating a new bedtime with your kids or orchestrating a million-pound business deal, it’s a critical life skill that we use at home and work. However, that doesn’t mean it’s easy. Negotiating is stressful, challenging, and nerve-wracking. Getting two people to agree to anything, let alone multi-million-dollar businesses is tricky. For that very reason, we’ve decided to write this article to help build your confidence and ensure you use these fundamentals in every negotiation.

5 Things You Must Do to Negotiation Successfully

For some, negotiation comes naturally; for others, it requires more time, training, and patience. Regardless of which category you fall into, everyone must learn to walk before they can run. That’s why nailing the fundamentals is crucial. A strong understanding of the basics helps you avoid mistakes and achieve the best outcome.

BATNA: Best Alternative to a Negotiated Agreement

Before you start, you must have decided on your BATNA, also known as the Best Alternative to a Negotiated Agreement – this is the course of action your party will take if the discussion fails, and you can’t reach an agreement. In short, it’s the best-case scenario for your worst-case scenario. It’s essential because:

• It provides a safety net to the negotiations.
• It gives you negotiating power and confidence.
• It establishes your reservation point, the number you can’t go above or below.

If you and your team know your limits, it guarantees that the other party can’t take advantage and that everyone knows when to walk away. So, before every negotiation, it’s critical that it’s written down and shared with your team.

Have Multiple Ways to Win

Every first-time negotiator makes this common mistake, turning up to a meeting with only one way to win – this gives the other party far too much power over the agreement and is a very efficient way to halt talks almost immediately. The likelihood of the other party accepting your first offer is slim to none, and being prepared for that is critical. Based on your research, you need to have decided on multiple scenarios you and your team could accept as a win. You need to know the following:

• What are your non-negotiable conditions?
• What does your business need?
• What would you like to have?
• What conditions are satisfactory?
• What conditions are no deal?
• Where is your hard line?

These can inform your scenarios and allow you to understand what you can and can’t accept, allowing you to pick the most favourable offer and have the final decision over the best outcome for your business.

Listen

Master negotiators are also excellent investigators. They know it’s their job to discover the other party’s goals, motivations, wants and needs by listening and observing – this involves hearing more than what the other party is saying. They know there is an art to being a good listener, and they use these skills to get ahead in the discussion.

However, the problem is many of us have forgotten how to listen to another person and utilise it effectively. Being a good listener involves:

• Being present
• Using eye contact, facial expressions, and open posture
• Asking open-ended questions
• Picking up on body language and key vocabulary
• Thinking about what they are saying and why
• Summarising and paraphrasing when feeding back

If you are planning your response or interrupting with your counterpoint, you aren’t listening, and it can leave the other side feeling disrespected and unheard. In short, the advantages of this skill are numerous. It can help you to resolve conflicts, build better relationships and secure more high-value deals.

Be Prepared

Every negotiation should start long before you or the other party step into the same room. Gathering information, studying the data, and researching the other parties’ previous outcomes and current pressures gives you far more power over the result. It allows you to make informed decisions, create innovative deals and be more persuasive. However, being prepared involves more than just knowing your opponent. It requires you to have a clear action plan and share it with your team. The key is to:

• Establish context, and research the other party
• Agree on your strategy
• Choose your negotiating style
• Identify your goals
• Know your BATNA
• Plan multiple scenarios

As the adage goes, fail to prepare, prepare to fail. You are guaranteed to secure a good deal if you walk into your negotiation armed with an up-to-date understanding of the other side and a comprehensive plan in place.

Don’t Take Anything Personally

We all know how irritating it can be when you’re communicating with someone who is frustrating, rude, or difficult. Human emotions are powerful. Letting them get the best of you in a negotiation by focusing on a personal issue rather than the agreement is guaranteed to fail. Not only can the other side weaponise it, but they can seriously hurt productivity and result in losing an important partner, client, or vendor. To ensure that you can regulate your emotions and stay in control of the negotiation, you could try the following:

• Calling for a break
• Using mindfulness techniques
• Knowing your triggers and when to walk away
• Asking questions to understand their position
• Taking responsibility for any escalations
• Building rapport by getting to know someone as an individual
• Being open to solutions
• Setting clear expectations
• Using empathy when there is a conflict

The best negotiators know that what happens in a negotiation isn’t about you; it’s about the deal and retaining your focus on the matter at hand is essential. Although you might think this is a waste of time, knowing when to call for a break, what calms you and how to resolve conflict are the cornerstone of a successful negotiation