The Art of Negotiation
From business deals to procuring goods and services to job offers and requesting a pay raise, negotiating is a handy skill to have. It opens a world of opportunities when properly done. However, it has a reputation as a challenging skill to utilize and master. It is not surprising that, according to Procurement Tactics, 40% of all adults in the U.S. do not feel confident in their negotiation skills. Even when it comes to salary negotiations, more than 55% of candidates don’t try to negotiate for a pay raise (according to hcmag.com) even when 73% of employers in the U.S. expect a salary negotiation on an initial job offer.
Negotiation, as defined by Investopedia, “refers to a strategic discussion that resolves an issue in a way that both parties find acceptable”. It is both a science and an art—on one hand it requires systematic analysis and on the other, interpersonal skills. It is a dialogue involving give and take, and a measure of compromise with nominal concession from the other party.
Though it is often interchanged with bargaining, there is a big difference between the two. Bargaining is a technique of getting the best price or the best deal out of products and services. It is a subset of negotiating focused on sales and below the asking price. On the other hand, negotiating is a broader term that addresses a mutual need, involving dialogue, discussion, and arriving at a mutually beneficial conclusion.
To be an effective negotiator, you need to listen actively, think under pressure, be articulate, and be willing to compromise. And most importantly, you must be confident. Effective negotiations can be judged by three factors: how well the agreement met the needs of both parties; the efficiency of said agreement; and whether the relationship between parties either improved or stayed the same.
When entering a negotiation, preparation is half the battle. Here are a couple of pointers to consider:
Define what you want, do your research, and have realistic expectations. Before entering a negotiation, you need to establish what your goals are. What do you want to get out of this conversation? What are you willing to compromise? What are you willing to concede? Do your homework and get facts to support your goals. Do some research on the other party as well to get a better understanding of what they want and why they want it. Finally, set realistic expectations. Knowing what you want and understanding what the other party wants can help you set them.
Timing is everything. When you are setting up your meeting, consider the “when”. You need ample time with no distractions of looming deadlines for either party. You also want to take into consideration the time of day. Set up a time when both parties are at their best.
Establish rapport. Communication does not happen without rapport. This doesn’t mean you have to ooze with charm and the gift of gab. It means be sincere and open to discussion. Speak with intention and match your body language with your words. Make the other person feel you are invested in this discussion as much as s/he is. Validate the other person’s opinion while making sure you are getting your point across as well. Once they are at ease with you, then they are more open to discussion.
Listen actively. Ask questions that evoke discussion and really listen to their response. This goes a long way to finding out more about what the other party wants and how best you can come to a mutually beneficial agreement.
Present alternatives and find a middle ground. When you go into a negotiation, it is not about winning and getting what you want. It’s about finding a resolution to a mutual need. Sometimes, it’s being prepared with alternatives that ‘s agreeable to both parties. It’s also about getting the other party to concede without making them feel like they walked away with the short end of the stick.
Follow up and implement. Once a solution has been reached and everyone has come to a consensus. It is important to follow up and implement the changes discussed at the negotiation table. After all, the execution is still part of the negotiation.
The important thing about negotiating is ensuring the relationship is either maintained or strengthened by what was agreed upon. The art of negotiation involves resolving the issue(s) while maintaining a good relationship with the other party. Often in business, the other party is your boss, your business partner, your employee, or a client. And these are important relationships to keep.