In Focus Commercial Credit
Prepare and plan with care Skilled negotiators do a number of things before a negotiation: l They develop a credible fallback that describes what they will do if this particular negotiation fails entirely. l They identify as many negotiable issues as possible, prioritise them, and develop a negotiable range for each l They calculate the cost of concessions for each negotiable issue to avoid impulsive and expensive mistakes in the heat of battle. l They repeat the whole process, but this time trying to think as the other party. l They spend time identifying ‘common ground’ and plan how to use it in the negotiation. l Thus they manage their feelings of power and identify the possible overlaps, trades, and levers to give themselves the maximum flexibility to bargain.
Identify and use your levers A lever is something that costs you less than the value the other party places upon it. It can, therefore, be traded for something that you value. Comparing the priorities on each negotiable issue identifies those levers. Linking issues and remembering to trade rather than concede makes sure that you use them.
Logic is not persuasive This applies in every aspect of life, as any parent will tell you! Skilled negotiators know it too. They do not browbeat the other party or use long chains of logical arguments. They have only one or two key reasons for any particular position they adopt. They do, however, prepare lots of smart questions to probe the other side’s stance. Their objective is to create doubt in the validity of that stance as the first stage in persuasion. They accomplish the second stage and create movement by offering flexible trades and using their levers.
Do not just cut the pie, grow it A good deal is a creative deal. It creates additional value to whatever the two parties each bring to the table. Ideally, that value is created at the expense of a third party. For example, the competition or the taxman! When planning, skilled negotiators generate a wide range of creative options in
October 2019
Preparing and planning are fine, but we all face impromptu negotiations with no time for either. When this happens, all we have to fall back on are our personal negotiating skills. The stereotypical image of the negotiator as a hard-faced and intractable character is incorrect
considering how each negotiable issue might be settled. They look ‘outside the deal’ for extra value.
Develop your behavioural skills Preparing and planning are fine, but we all face impromptu negotiations with no time for either. When this happens, all we have to fall back on are our personal negotiating skills. The stereotypical image of the negotiator as a hard-faced and intractable
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character is incorrect. Skilled negotiators have wide behavioural repertoires and the flexibility to match their behaviour to suit the situation.
Keep all the balls in the air till the end However tempting, avoid settling issues as you go, particularly the minor ones. The risk is that you discard your levers and the negotiation comes down to a single-issue confrontation with no other issues available to break the deadlock. You need to be able to juggle all the issues so that you can bring any of them back into play at any time before the deal is concluded, Until the end, settle issues provisionally. And of course, like any good set of ‘10 commandments’, there is an eleventh.
‘No deal’ is better than a bad deal Obvious, is it not? But not so obvious when the deal has been in the forecast for months, it seems tantalisingly close and all that is required to close it is a few final concessions. Because they are clear about their ‘worst’ position and have a credible fall back, skilled negotiators recognise a bad deal and are not afraid to walk away from it. CCR
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