1. Recognize you are in a negotiation. When I took my first negotiation class with professor Stuart Diamond of the Wharton School of Business, he challenged us all to begin a lifetime habit of noticing the little negotiations we get into everyday. Your wife begins dropping hints about a new car. Your toddler is throwing a tantrum in the supermarket aisle. The repair shop calls to inform you that your car needs an $1,800 repair. Often we see these situations as problems, but fail to notice the opportunity. We are in negotiation all day long and we can either blindly stumble through these interactions (ignoring the wife, quieting the child, and paying the mechanic his asking price) or we can use these opportunities to practice our negotiation skills.
2. Clarify your goals. Sounds simple enough. But I can't tell you the number of times I've worked with clients who had only a vague idea of what they wanted to accomplish in a contract negotiation. Take a few moments to jot down specific short term and long term goals. Include not only what you want from this contract or venture, but how this particular agreement fits into the bigger picture.
3. Consider the value of the relationship. In their classic text "Getting to Yes", Fisher & Ury assert that positional negotiation damages relationships. What's positional negotiation? Think of the typical scene of a buyer and seller bargaining at your local flea market ("I'll give you $5.00 for this used book. " "I couldn't possibly accept less than $20.00"). Positional bargaining assumes a zero sum game in which every dollar you win is a dollar lost by the other side. You can see that stubbornness, an exaggerated opening position and use of collateral power are all successful strategies in positional bargaining, for the short term. They may work fine if you are engaged in a one time interaction, but when you are setting up a partnership that you hope will last for years, this negotiating style tends to create bitterness and hostility. Skillful negotiators broaden their viewpoint to take account of the value of loyalty, cooperation and goodwill over the long haul in a collaborative relationship.
4. Identify shared interests. We've all heard the one about the two people fighting over a bowl of lemons. One wants the juice for lemonade. The other wants the rinds for lemon pound cake. If they keep fighting over possession of the entire bowl, they'll never discover that there is a "win/win" solution that allows them both to achieve their desired ends. We may have heard the story. But when it comes time to think about a real estate sale or a sales agreement, we have a tendency to fall back on the familiar pattern of taking a position and defending it to the death. We forget to brainstorm and explore creative options that could break the stalemate to the benefit of everyone involved. Accomplished identification of shared interests separates the expert negotiators from the amateurs.
5. Detach your ego. People have a strong tendency to begin to identify themselves with their positions. This is particularly true in family law negotiations, where every little item can become infused with an emotional energy that has nothing to do with who keeps the plasma TV or the good china. Successful negotiation requires some flexibility and perspective.
6. Get smart. The best negotiators can do a lot with a little information. But they don't negotiate in the dark, if they can avoid it. They conduct "due diligence" by gathering as much information as they can about their interests, the other parties' interests, their respective resources, the product or service in question, market conditions, competition, availability of financing, risk and the ability to mitigate that risk. Information empowers you to frame the issues, offer options and persuade the other party. Sharing reliable information lends you instant credibility and, when handled properly, it can solidify your role as a leader without resorting to power plays.
7. Close the deal in writing. Parties are frequently tired at the end of negotiation. It's tempting to go home now and put the agreement in writing later. Sometimes, the attorneys are the ones who insist they need time to go back to their offices and draft a formal agreement. Despite all these pressures, I encourage you whenever possible, get the basic terms of the agreement down in writing on the spot. A simple memorandum that summarizes the key terms is all it takes to preserve the benefits of all the hard work you've put into the negotiation process.
Colorado small business owners and nonprofit executives can contact the law office of Laurel Anne Markus PC for assistance in the negotiation of partnerships, grant applications and other contracts.
