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Negotiation skills

The world is such a diverse place to be in, and this diversity is to an extent that no two individuals are the same! This also implies that no one person can have the world exactly the way he/she would always prefer it to be. There is a constant need for adjustment to maintain that delicate balance between individual requirements as well as proceed with the tasks in hand. This is where negotiation comes into picture. Negotiation skills are extremely vital for smooth running of all activities not only for business, but also to get things in personal life.

You do not get what you want, You get what you negotiate – Harvey Mackay

What is Negotiation?

Negotiation is a planned discussion that helps settle matters in a way that is acceptable for both parties. Negotiations may be professional as in any business or may be personal as in parenting or between spouses.

Be it a child demanding candies, employees wanting a pay hike, homeowners renting out their flats, or neighbouring countries resolving conflicts with treaties; negotiation seems to be happening everywhere. Getting a good hold on this skill gives you an edge over the rest, as it is among the most essential of skill sets. So then get ready to grab some tips as you read on.

How do Negotiations Help?

Negotiations are those processes that help achieve:

  • favourable business terms
  • Added value to a product/service
  • Reasonable costs for a product/service
  • Improved performance of a service/process
  • Resolving of conflicts
  • Solving of problems
  • Securing investment / cash flow

What are Negotiation Skills?

We may generalize a few skills that may be applied in various scenarios of negotiations. Good interpersonal skills are essential for effective negotiations. These skills include effective verbal communication, active listening, rapport building, problem solving, decision making, or being able to deal with difficult situations. A more vivid picture of skills required may be summed-up parallelly according to the different stages of negotiation.

What are the Phases in a Negotiation Process?

The essential phases in the life-cycle of any negotiation process principally involve:

  1. Preparation
  2. Exchanging information
  3. Bargaining
  4. Closing

We shall now consider specific skills required during each phase of negotiation.
Skills at Preparation Phase:

Prepare Your Mind for the Negotiation:

Preparing your mind for any negotiation means to realise that in reality, there are no choices or a wide range of possibilities but only available alternatives with limited possibilities. Developing this understanding is a skill that will provide a practical mind-set and proper approach to the subsequent processes of a negotiation.

Research and Structure for Yourself a Strong BATNA (Best Alternative to a Negotiated Agreement):

A negotiation process will have meaning to it only if you have with you an alternative option that you can rely on, in case a negotiation fails. Otherwise, negotiation will carry no meaning and you will most likely give in to the demands of the other party very easily. Hence having a strong BATNA gives scope for a proper negotiation and it is therefore the foremost skill to learn. It is similar to preparing a SWOT (Strength, Weakness, Opportunities, Threats) analysis.

BATNAs do not exist, you have to create them.

• Sit down and develop a list of actions that you might take if no agreement is reached. In other words, convert some ideas into future plans of action. These become your alternatives to the negotiation.

Develop more than one BATNA:

  • Having more than one alternative or BATNA puts you in a stronger position while negotiating.
  • Among the various BATNAs that you form, consider the best possible before you start the negotiation.

To reveal or not to reveal your BATNAs to the opponent:

You may be open about your BATNA to the other party if you know it is strong and you can get a better deal by revealing it. However, if you think your BATNA is weaker than the outcome of negotiation in hand, it is better not to reveal it to your opponent.

Skills for Exchanging Information:

Information is negotiator’s best weapon – Victor Kiam

Be Circumspective:

While exchanging information during any negotiation, be in the habit of speaking only after careful analysis of its consequences.

• Be discreet before giving out any details.
• Make genuine statements only.

Learn to Listen Actively:

As in any communication skill, listening gets priority even while negotiating. Active listening means to fully concentrate, understand, evaluate, and then respond appropriately.

• If one is constantly thinking about what he/she needs to talk next, while the opponent is still talking, then one may miss out on valuable information. Instead, listen attentively and then frame your next statements.
• While listening, try to acknowledge any difficult feelings expressed by the opponent. This will help build a good rapport with the opponent.
• If you are a good listener, there are more chances that the other party will also mimic your listening skills and equally pay heed to your points of view.

Ask Relevant Questions:

Asking questions will likely give you more information on things you require clarity on. However, make sure the questions posed are relevant, and neutral.

  • Frame the questions carefully so as to receive subjective answers rather than just a ‘yes’ or a ‘no’ reply.
  • Prepare the questions such that they cover many important aspects rather than stick to only one issue.
  • Ask questions in a gentle way rather than letting them trigger off an emotional response.

Create a Deadline:

• Creating deadlines help avoiding dragging of the deal for lengthy periods. It also encourages creative thinking and problem-solving in both parties.

Skills While Bargaining:

Prioritize Objectives:

Negotiations will have more than one objective for both parties. Make a note of your goals and prioritize them based on which ones are of primary requirement. For instance, when you are negotiating with any vendor:

• Your prime requirement will most likely be the quality and cost.
• Next in the priority list would be the timeline of the delivery of product/ service and the payment terms.

When your priorities are clear, you will know what to compromise on.

Having a Long-term Vision:

Having a long-term vision means to not be impulsive. Visualize the outcome of the negotiation on the long run and know what to expect from the agreement. Once you are clear on this, you will know exactly how to structure your plan.

  • Think of alternatives, evaluate them and create an action plan.
  • Build the action plan into a formal agreement.
  • Evaluate possible outcomes from the agreement in order to satisfy various priorities.
  • Bargain for collective agreement upon courses of action.
  • Follow-up to assure if the action plan is properly implemented.

Skills Essential While Closing the Negotiation:

Commitment:

Commitment is the key concept till the end of negotiating and beyond. Make sure:

  • Commitments made are favourable for you and you can easily abide by them.
  • Commitments made by you or the other party should not be premature. Thoroughly consider the pros and cons of the negotiation.
  • Commitments made by the other party requires a proper follow-up and a plan on what is to be done if there is a failure to act on the commitment.

Summarise while closing:

Lack of clarity may be a barrier and so summarising the discussions will ensure there is no miscommunication.

Styles of Negotiation:

Negotiating styles depend on the type of negotiation that is happening. A negotiating style decides how you act towards the other party during the process.

Competitive:

This is a more aggressive type of negotiation which involves very little pleasantry exchanges. It is a type more focussed on completion of the task. It is an ambitious win-lose tactic.

Collaborative:

This is more of a calm and composed type where interests of both parties are restored in a creative way. This type is considered the win-win equation.

Compromising:

Here the negotiator’s concern is to do what is fair, and maintain relationships even if he/she may have to compromise a little more than the opponent.

Familiar types of Negotiations:

Mastering negotiation skills and knowing when and how to apply them are both crucial. We are all familiar with some or the other form of negotiation and know it by various names.

Negotiations may be broadly of a win-win outcome or a win-lose type. In the former, both sides feel gained and benefitted, while in the latter, one party may be benefitted, while the other gains little.
Below are some examples of basic terms that we may easily relate to, and it is interesting to note their contrasting features and how they apply based on differing circumstances!

Bargain versus Bidding

Bargain: A bargain is where a participant has an advantageous purchase of a product or service, at a cost lower than the usual.

Auction: An auction is where a participant bids against other participants for a product, which is ultimately sold to the highest bidder.

What is noteworthy is that both are negotiations where the prices keep changing. However, in bargaining, you try to get something at a lower price, but in bidding, you are willing to pay a higher price while competing with other buyers.

Barter versus Compromise

Barter: Barter is when two individuals negotiate to determine the value of one another’s goods or services in order for their fair and even exchange, without involving money.

Compromise: An agreement where each person gets a part of but not all of what he/she wants.

Both barter and compromise are again negotiations of sorts. But in a bater, both parties seem to arrive at a satisfactorily fair deal, while in a compromise, the two sides give up on certain demands to meet somewhere in the middle.

Saying ‘NO’ to Negotiations!

Did you know that negotiations are also avoided sometimes? Spine-chilling hijacks, kidnaps, and all hostage crises are incidents where terrorists take undue advantage of negotiation tactics and loot heavy ransom money. It is unfortunate how despite careful efforts from diplomatic negotiators, the hijackers /terrorists torture several hostages and never free most of them even after receiving what they demand! These are rare phenomena where negotiations do not form the solution. Agreeing to their demands only encourages them to have more hostages in the future. Many governments especially in the West, have therefore stopped giving in to demands of terrorists and say ‘no’ to negotiations.

What if the Negotiations Fail?

What if one has to close the deal without a fruitful negotiation? Go back to your list of BATNA and find that best alternative to walk out of the negotiation rather than agree for an inadequate deal.

Conclusion:

Negotiations are a part and parcel of life. Some negotiations are simple while others complex. Sometimes, an impartial third party may be involved in resolving matters. Such a negotiation is termed ‘mediation’.

Cross-cultural negotiations are more of a challenge requiring more skills in dealing with ethnic differences that include differences in body language, lingual issues, stereotypes and assumptions (based on history), and many others that need to be tackled diplomatically along with the main issues to be discussed.

Tremendous competition makes ‘sports ‘as one area that involves high pressure and much chance for conflicts between opponents. Negotiations here need to be of the assertive type that is being able to firmly stand up for your rights and at the same time be gentle in approach.

Despite all care, negotiations still fail either due to lack of adequate preparation, or by letting emotions get in the way, and sometimes because of giving in to pressure tactics of the other party. Very often, deal and diplomacy go hand in hand. Building trust through openness and transparency and practicing ethics go a long way in making negotiations successful. Positive gestures and great attitude can present pleasant surprises in negotiations. Whenever there are opportunities to build trust and relationships in negotiations, do not think twice. Go for them and help create that win-win outcome!

Recommended books: Negotiation skills

Article Credit: Negotiation Skills

This article is contributed by Ms Preeti Tambraparni, post graduate in microbiology with a certification in clinical research. Her expertise are writing personal blog in life science related topics and health blog.

More articles from Ms. Preeti Tambraparni:

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