The Six Steps Of Negotiation
Often, in life, things seem complicated – until you understand them. True genius is taking the complicated and making it seem simple. For example, when the Velcro fastener was invented, many people said “I wish I would have thought of that – it is so simple.”
Velcro was invented in 1948 by a Swiss man who was walking his dog in the mountains. When he returned from his walk, both he and the dog were covered in burrs. He immediately ran to his microscope to study how the burrs attached themselves to fur and clothing. When he did so, he discovered the hook and loop system found in nature. He saw how soft material (fur or clothing) attached to rigid hooks (burrs). Applying it to a variety of uses, he invented Velcro. Today, the Velcro fastener is a multi-million dollar product with Velcro sold all over the world. So simple.
The same is true of negotiation. It can seem daunting and complicated. Yet once you boil it down to its main ingredients, it is really quite simple. Then, when you sprinkle some winning techniques on top, it not only becomes simple – it becomes fun. And, like anything, the more fun that you have doing something, the more that you will want to do it and the better you will become at it just from sheer repetition.
To become a great negotiator, we start by breaking down the process into 6 steps. These steps can become the basis for any negotiation that you undertake from this point on, for the rest of your life.
1. Know Your Outcome
The secret to getting anything that you want in life first starts with knowing exactly what it is that you want. Often, many people wander through life without knowing what they want. They bounce around from problem to solution without heading towards a target. Maybe that is why so many people are frustrated, unhealthy, financially insecure, or unfulfilled. They never knew what they were going for.
Recently, I was speaking to Janice, a friend of mine who is quite overweight and as a result, was manifesting more and more health problems. She was telling me that she wanted to lose weight. That’s it – just lose weight. Not, how many pounds, or by when, or even how exactly she was going to lose the weight. In fact, she actually took a positive step – for the first time in her life – and hired a personal trainer. Good for Janice. Then she proceeded to tell me for 45 minutes how he doesn’t know what he is talking about.
When I asked her what she meant, she told me that he had been asking her what she had been eating. Imagine, the gall! When she would tell him that she was eating chocolate, or sausage, or peanut butter, he would express his displeasure and tell her how eating these things was not helping her to lose weight. Obviously, he cared about her outcome. She wanted to lose the weight, yet had no plan to do so and would sabotage herself by dismissing the expertise of the trainer that she had hired.
My suggestion to her, and to anyone who is trying to do anything in their lives, is to know your outcome. Just know what you want and set it as a goal. The same is true in a negotiation for anything. Simply set a goal and you are already closer to achieving a better result than if you had not. I always recommend guidelines for setting SMART goals. This means that when you set a goal, it is:
Going back to Janice, my friend, she was telling me how frustrated that she was because it is such a long process. Perhaps if she had a plan that was SMART, she would actually feel good about dropping a few pounds and changing her life forever. I was worried about her health and felt that losing weight would help her a great deal.
So, I tried to help her set a goal to lose just 5 pounds a month. “Just think,” I told her, “in 20 months you would have lost 100 pounds. She retorted: “yes, but what if I want to lose more?” “Well, then lose more,” I answered back.
You see, until she became fully committed to the outcome to lose 100 pounds, she could never even contemplate a sub-goal to lose 5 pounds per month. Finally, she was convinced. Now, let’s look at her goals.
- Specific: she specifically was committed to losing 5 pounds a month until she got to her main goal of losing 120 pounds in 24 months, and she knew how she was going to do it.
- Measurable: they were goals by weight and by month
- Achievable: she agreed that she could lose 5 pounds and that 20 segments of 5 pounds were attainable
- Realistic: she didn’t set the goal too high
- Timely: she set time limits by month
So, in your negotiations, I suggest that you plan your goals, know your outcome, and then plot a strategy about how you are going to achieve it. Keep a win-win outcome in the top of your mind as you plan your goals and this will help you open your mind to new possibilities even before the nuts-and-bolts negotiation begins. Know what you want. State your objectives with clarity and anticipate/listen to your adversary’s objectives.
Several years ago, researchers Roger Fisher and William Ury of the Harvard Program on Negotiation determined that negotiations achieved superior results when the successful participants not only knew their outcome, but knew their BATNA. A BATNA is an acronym for Best Alternative To Negotiated Agreement. In other words, if you had a strategy for what would happen to you if you did not achieve agreement with the other party, then you could better prepare your negotiation. This makes sense if you are buying a car, for example. You might have these choices for BATNAs: go to another dealership, receive a cash-only discount, buy a used car, walk-away, etc. By knowing your BATNA, it takes the haphazardness and impulse out of the negotiation and allows for you to better plan your strategy.
2. Do Your Homework
Probably the most neglected part of a negotiation is the preparation and planning stage. Part of this comes from the fact that a negotiation is usually viewed as a single session where two parties sit down and beat each other up until they come to some kind of a resolution. As a result, most amateur negotiators “plan” to go into a negotiation session to “see what the other party is willing to do” and then react. This method of negotiation severely limits your options to only those that you can think of in the heat of the moment, when emotions are running high.
Good negotiators know that negotiations take place over time and if they are better prepared, can spend their time reading the other parties, controlling the negotiative process, and directing the negotiation, it tends to go in their direction.
Good negotiation preparation begins with knowing your outcome, knowing not only the price that you want, but the terms and conditions; knowing your opponent and what their goals will likely be; planning BATNAs and potential walk-aways; and planning the strategy of the negotiation.
The final step to good preparation and planning is to actually practice the negotiating sessions without your opponent, before the negotiations begin. To many amateur negotiators this may seem like the ultimate waste of time. But, what actor arrives at the set without practicing her lines? What athlete comes to the game without first studying the other team and practicing? Who would give a speech without first reading it over several times and then rehearsing it? What orchestra arrives at the concert without first running through the symphony?
So, then, why do people view negotiations differently? My belief: they are lazy. Instead of dealing with, what they believe could be, an unpleasant conflict before it occurs, they instead prefer to wing it and just show up at the negotiation. This is a formula for disaster. Just by simply planning and preparing before a negotiation begins, you can gain a great deal of confidence, and make a first grab for the upper hand right off the bat.
Secondly they do not understand the benefits of preparation. If they knew that practicing would mean saving $10,000 on the price of the purchase of their home they would certainly spend more time doing it. However, we get caught up in our lives and then just react – and it costs us. When you not only learn, but practice negotiation, then it will become automatic and worth millions to you in a lifetime.
Good preparation means laying out a strategy for the negotiation and planning the likely concessions that you will make. If you plan these out properly and employ the strategies laid out in this book, you will concede very few important items while gaining important concessions from the other side. Good preparation prevents you from accepting something that you might later regret. More often than not, only fools rush in.