We negotiate every day, in our personal and work lives. We do so to manage the expectations and obligations of each other and to ensure things get done in a manner, time, and place that suits both parties and at best inconveniences them the least. 

In the brief space afforded me in these pages I aim to shed light on some of the basic stuff you need to give thought to in any and every negotiation with which you find yourself involved.

First things first. Negotiation is NOT all about tactics at the table. Preparation is the key!

From now on you are to think of a negotiation as an iceberg. The bit above the water line is what goes on at the table but the bulk of it, the bit hidden from view is the mass of preparation you do before you take a seat.

Preparing properly 

‘Audit of the barriers to an agreement’ 

In their superb book ‘3-D Negotiation: Powerful Tools to Change the Game in your Most Important Deals’ – David Lax and James Sebenius, advise conducting what they describe as, ‘An audit of the barriers to an agreement’.

‘An audit of the barriers to an agreement’ is an exercise whereby you give due consideration to all the factors, be they individuals, time, place, deadlines, existing obligations, and any other issues which may stand between you and a deal. 

B.A.T.N.A (best alternative to a negotiated agreement) 

What are you going in the event of not coming to a deal? What if the deal offered by your counterparty stinks and no-deal is so much preferable than a clearly ‘bad-deal’? 

It is for these reasons you should ALWAYS have a BATNA! 

Having a BATNA is so fundamental to all negotiations, I doubt there is a book written about negotiating that doesn’t talk about them! 

One of the things you should focus attention on when preparing your negotiation are the alternatives open to you should you not reach an agreement. If you are acting on behalf of a client, it is incumbent on you to sit down with them and explore what their alternatives are.  

Sometimes looking at different avenues and options reveals an alternative better than anything you could gain through negotiation, in which case, hurrah, you can walk away! On the other hand, your alternatives may be awful, in which case your attention is now focused on working hard to secure a good deal.

Warning! BATNAs are not to be confused with bottom lines! 

Bottom Line 

Let’s say your property has been valued at £750,000. You have thought about your bottom line and are adamant you will not take less than £730,000. This is your Bottom Line.

I come along, view it and want it! 

“I love it! It’s what I’ve been looking for and I need to move quick!  Will you take cash?”

You are, understandably taken aback but relish the idea of a very quick sale and a bag full of the hard stuff. 

I begin counting out the cash on your kitchen table. 

I’m nearly done when… “Oh no! I’m 250 pounds short! I can’t believe it! I saw the cashier at the bank count it in front of me yesterday! 

Going to let me go?  Going to wait for another buyer despite having £729,750 staring you in the face? ‘Course you’re not’, not for the sake of 250 pounds. 

Therefore, £730,000 was not your bottom line. This is an important point. Whenever, the other party tells you it is their bottom line and they simply cannot go any further, ignore them. It isn’t. Ever. Ever, their bottom line. Ever! 

Making offers. 

Go first. 

Seriously. Unless you are woefully ill-informed as to the value of what you are selling/negotiating over, you should always go first because the number you put out there acts as; what is described as an 'anchor'. 

Where do the dealers of second hand (‘previously cherished’ as a BMW salesman once corrected me!) cars display the price? On the windscreen in large numbers. 

A potential buyer comes along, test drives and wishes to purchase it but wants a discount and begins negotiating. After a little bit of to-ing and fro-ing, a price is agreed, and she gets £500 knocked off and free mats.  

She feels great. However, so does the salesman because he decided at which price the negotiations began! By displaying the cost of the car, he set the starting price and she dutifully went from there!

Next time someone tries to ‘set’ an anchor in your negotiation, don’t simply accept it and begin negotiating, ask them by what process, method, or criteria they got the number from! 

Distributive and integrative negotiation 

There are 2 types of negotiation: distributive and integrative and you should know the difference and the sort of things you must consider when involved in each.

Above is an example of the former. 

Sometimes referred to as ‘positional bargaining’ and more prosaically, ‘haggling’, this form of negotiation is about the allocation or distribution of a fixed sum of money. Jane wants £40k but I only wish to pay £20k and so we begin to negotiate.

This process can sometimes take time, with me conceding a little and Jane giving a little ground, all the while keeping our cards close to our chest, not wishing to give too much away for fear we may be taken advantage of. 

Finally, we arrive at £30,000. This seems reasonable. It’s halfway between the two figures. We’ve both compromised. However, neither of us walks away with what we want. 

Professional negotiators don’t look for compromises, they seek collaboration and cooperation, which require a different mindset, one imperative if they are to reap the benefits of an integrative approach.

If distributive negotiation is about the dividing up of a ‘fixed pie’ (in common with BATNAs, the concept of the ‘fixed pie’ appears in just about every book written about negotiation), integrative looks at ways it may be possible to make the ‘pie’ bigger. Half of a bigger pie is always more pie! 

Taking the integrative approach means listening, coupled with being creative. Listening to discover what the other party really needs to achieve and what their underlying interests are and being creative to come up with ideas lead to both parties walking away with more than at first seemed possible.

Z.O.P.A.

Your ZOPA is the ‘Zone of Possible Agreement’ and one of the things you should give thought to during preparation.  

In the scenario with Jane, I am her boss, and we are discussing next year’s budget. I’d like to give her £20,000 but have decided I’d go up to £27,000. That’s then my ZOPA – somewhere between 20 and 27,000. 

She, in turn, wants £40,000 but has decided she would accept as low as £30,000, which is now her ZOPA. 

£27k, therefore, becomes what is termed my 'break point', whereas Jane's is £30k. Your break point is the figure below which you would…wait for it…go to you…BATNA!

As with BATNAs, you are constantly reviewing your break point and, if negotiating on behalf of a client, should discuss with them what theirs is so you know what leeway you have when you go into bat for them. 

At face value, our Jane and Nick negotiations are of the distributive kind, but we'd be unwise to jump to that conclusion too hastily. Often, there are opportunities to create value for both parties by taking an integrative approach; if you take time to explore why the other party has asserted what they want.

Jane has told me she wants £40,000. Wants are stated. People will tell you, at every opportunity, what they want!  

Professional negotiators hear the ‘want’ but then listen and explore to seek to discover the underlying ‘need’ because in doing so they may reveal other ways to resolve the problem.  

Back to Jane.

Jane has stated what she wants, which is my cue to begin enquiring as to how she arrived at that figure and seeing whether I can find out why she feels she needs the additional money.

Perhaps, after listening to her I learn she feels undervalued or that her career is not progressing as quickly as she’d like, and the money would confer the status she feels she deserves. Maybe a friend of hers, occupying a similar role at a rival company is on the higher amount and it’s unfair she’s not?

It might be some or none of the above, however. It could be she’s been late for work 3 times this month because the car has broken down and she wants the extra cash to secure a new one?  

These would all come under the heading of ‘needs’ and might be satisfied without having to give her the full £40,000 she seeks.

Status, recognition, self-worth, and fairness run very deep with human beings, and we all achieve them in different ways. Perhaps the offer of her own car parking space would go some way to tick the recognition box? Maybe changing her job title, giving her promotion would do the trick? 

The point here; the one good negotiators recognise, is there is only ONE way to satisfy a want and that’s to deliver on it! There is only ONE solution to the problem – give her the extra £20,000.

If you take the time to find out what the underlying needs are; it offers up multiple ways to satisfy them, thus providing much more scope for arriving at a mutually beneficial solution.

Principled Negotiation 

In the early 1980s Roger Fisher and William Ury at Harvard Law School established ‘P.O.N’ – the Program on Negotiation’ with the aim of exploring the best way to reach negotiated deals in business and international relations. 

Aside from one of the best and most accessible books ever written on the subject ‘Getting to Yes’ being published by them, they, along with other experts formulated a negotiation model known as ‘Principled Negotiation’.

Principled negotiation seeks to break down each negotiation into 4 parts:

• People 

• Interests 

• Options 

• Criteria 

Given the limited space afforded me and the fact I don’t wish to assault you with too much information, it’s my intention to deal with the ‘People’ element in more detail here, explain what is meant by ‘Interests’ and let you learn more about the last 2 in your own time. 

People:  ‘Soft on the person, hard on the problem.’

This is the mantra all professional negotiators attempt to adhere to. It’s not always easy – particularly in a potentially acrimonious divorce or in a commercial negotiation where you feel personally offended or slighted – however, adhere to it you must… because it’s incredibly effective!

Adoption of ‘Soft on the person but hard on the problem’ allows you to preserve the relationship, which is vital if there is to be an ongoing relationship, whilst ensuring you arrive at the right deal.

Implementation of this approach involves you really listening to the other party; listening to seek to understand how and why they have arrived at their position. This DOES NOT necessarily mean you agree with them.

By being empathetic or ‘soft’ on the individual but tough on the problem creates what is referred to as ‘cognitive dissonance’.

This phenomenon is created in the subconscious mind of the other party because they feel your genuine empathy – softness – at the same time as your determination and 'hard' approach to the resolution of the problem.

Human beings don’t like this sense of dissonance and therefore seek to ‘re-balance’ things and in a negotiation, they achieve this by stopping viewing you as the problem and re-directing their focus to the problem.

The best way to make use of this extremely powerful approach is to sit next to the person with whom you are negotiating, rather than the more usual opposite position.

When you sit opposite you literally have a different perspective than the other person and it, therefore, promulgates a positional approach, which can lead to people feeling under attack and thus more likely to dig their heels in, becoming more entrenched and increasingly reluctant to concede ground. 

Interests 

We have already established ‘wants’ are stated, whereas 'needs' often require uncovering through careful listening and observation. Well, the desire of those 'wants' cause people to adopt a certain 'position'. 

The professional negotiator hears that and tries to discern the underlying interest(s), which cause the adoption of such a position.

If possible, you should try and find out the interests of the other party by sitting down with them and listening. However, this is not always possible in which case you imagine yourself in their position and imagine what they might be.

A useful exercise to conduct as part of your preparation and as negotiations progress is to – preferably with the other party – list your and their interests and then consider which are shared, which are differing, and which are in conflict.

Tricks and ploys at the table.

It’s inevitable you will, during your business career, come across people who attempt to throw you off your guard by use of some technique they favour.

Typical tricks include:

• Sitting you in a low chair whilst they are seated in a more elevated position 

• Sitting in a hot room, air conditioning off and with only hot coffee to drink  

• Dragging out negotiations through the day, into the early hours of the morning at their offices, promising you food and drink which never arrives – an all-too-common trick! 

• Playing the classic: ‘good cop’ ‘bad cop’ – A negotiating pair where one is lovely, full of empathy, being overly reasonable whilst their colleague adopts an intransigent, dogmatic, un-moving stance. 

This is how to deal with these:

1. Recognise the tactic – make sure they are doing what you suspect they are. In other words, wait a little while to be sure before leaping to conclusions

2. Recognise how it’s making you feel 

3. Raise it explicitly – you HAVE TO call them on it!

Bearing in mind our mantra of ‘Soft on the person, hard/tough on the problem’, here is how you go about achieving number 3 without making it confrontational and/or getting their back up.

Let’s assume they have you seated in a low chair, making you feel insignificant, weak, powerless and at a distinct disadvantage.

‘Wow, this chair seems very low!  I feel like I’m back at school and you’re the teacher. (Say this in a humorous, light-hearted manner) Is there another chair I could use?’

‘’Afraid not. That is the only chair we have available’

‘That’s ok. Well, when we break or halfway through our discussions, let’s swap chairs: I can already feel my legs going a bit numb in this one and my back feeling the strain’

‘I am sorry but that won’t be possible. I too suffer from a bad back and have been advised I must only use this seat’

‘Ok. Well, it’s important we are both comfortable whilst we discuss what’s on the table and since it appears it’s not going to be possible today, let’s re-arrange and get another date in the diary’ (pack your things up and begin to stand as you say this)

What you’ve done here is call them out on their trick/technique, which renders it immediately powerless and what’s more they will NEVER use it on you again – to do otherwise would make them look foolish!

You have maintained a harmonious relationship whilst exerting authority and domain over your feelings and position – I will not negotiate from this position (literally!) 

SOFT ON THE PERSON; HARD ON THE PROBLEM.

Listening 

I want to finish with the following advice, advice given to me and fellow delegates attending the ‘Dealing with Difficult People’ negotiating course held over 4 days in December 2016 at Harvard Law School by the 7 professors/world-respected experts we had the privilege of being tutored by.

They all said, independently of each other; as far as they were concerned, the single most important skill of any negotiator in any negotiation was the ability to LISTEN.

Far too often we go into negotiations knowing what we want and what our position is. We are sure about what we need and are resolute in what interests need to be satisfied. So focused are we on ourselves we fail to really understand where the other person is coming from; what really matters to them, what motivates them?

It is only through intense and active listening that we will discover these things. When we do, we stand a far better chance of coming to a mutually beneficial agreement that we can both work and live with.

Listen! Listen to seek to understand!

Nick Davies is Co-Founder of Tricres alongside his sister Rebecca Bonnington, fellow Co-Founder and CEO. Tricres launched a brand new app called Fuel My Business this autumn that will help all SME’s drive sustainable, scalable growth using a programme of tools customised for what your business needs in just 60 seconds. There is a 7-day free trial available here.