Effective Negotiating Is Not the Same as Haggling
There’s a popular misconception that in a negotiation you can either ‘win’ or preserve your relationship with your counterpart – whether your boss, a customer or a business partner — but you can’t do both. People assume they need to make a choice between getting good results – by being hard and bargaining at all costs – or develop a good relationship – by being soft and making concessions to build the relationship. Thinking that way is dangerous because one needs both: One has to be able to stand firm as well as maintain important relationships.
People often use the ‘positional bargaining’ approach; They get into a negotiation looking stern and unmovable, then make small planned concessions and not-so-thinly veiled threats along the way, to get the results they want. Nonetheless, this isn’t truly negotiation, but a haggle, a concessions game that forces both you and the counterpart to compromise. This approach works great when one is negotiating simple transactions that have low stakes, and having an ongoing relationship with the other party is not important.
However, in almost all business negotiations there is a lot at stake, and chances are that one will need to continue working with the other party going forward. If one does try to use ‘positional bargaining’ in these situations, they wouldn’t get impressive results.
This could be due to the fact that positional bargaining rewards stubbornness and deception; it often yields arbitrary outcomes; and it risks damaging relationships. One may not get creative to expand the pie but be completely focused on ‘exactly’ how to divide it up.
To negotiate more effectively, one needs to shift the approach from a combative & compromising approach, to more collaborative. With this approach in mind, one may reframe key questions about the negotiation, for example, instead of asking yourself, “What do I want?” you may ask “Why do I want it?”, or instead of asking, “What am I willing to give up?” you might think more creatively and wonder, “What are different ways we can resolve this?” This will help to ensure that you are expanding the pie, not shrinking it.
This shift leads to an approach where two parties come together to jointly solve a problem — decide on a contract, create the parameters of a new job, or delineate the conditions of a partnership. Together they dig to fully understand each other’s underlying interests, invent options that meet everyone’s core interests (including those of people not even in the room), discuss rational precedent, and use external standards to evaluate the possibilities, — all while actively managing communications and building a working relationship.
It takes discipline and toughness to truly get creative and apply sound decision-making criteria. Taking a joint problem-solving approach does not require, or even condone, sacrificing your own interests. It is about being clear why you want what you want (and why the other party wants what they want) — and using this information to find a high-value solution that gets you both there.
The benefits of this approach include better solutions, improved working relationships, greater buy-in and commitment, and more successful implementation of agreed solutions.
The team at Actuate Business Consulting, a knowledge-based management consulting firm in India, believes, that this may be an unconventional approach and may even get one and their counterpart uncomfortable at times. One even runs the risk of openness to collaborate being interpreted as weakness. Hence this collaboration approach requires more preparation, deeper skill, and immense discipline. But the approach is worth it, as it can help shape the negotiation to get the results you seek, and often much better than you ever expected.