I was sitting at a local Starbucks when two lawyers sat next to me and started talking about a negotiation that they were in the middle of. Of course I was eaves dropping! What could be more delicious than listening to fellow attorneys strategize for a high stakes negotiation? Well, what happened was the two men meandered all over the place and wasted a good 30 minutes. Not only did they not plot a strategy, they mostly complained about what they were not getting from the other party. What a useless waste of time.

Studies show that negotiation preparation improves outcomes, in fact, it is the single most important thing you can do to influence the negotiation in your favor. So, when you find a few minutes to prepare, what would be the most effective use of that time?

There are five key questions to consider before you negotiate. The process of answering these questions is the preparation you need to have an advantage at the bargaining table.

1. What are your goals for this relationship, whether it is with a customer, vendor or provider of some other service? How do these goals fit into the larger picture at your company? Does it make sense to pursue these goals with this customer or vendor?

2. What are the motivating factors for you and the other person to work together? List the factors that motivate you and then list the factors that motivate them. The key to gaining strength at the bargaining table is to identify what you and the other person really want and need from the relationship. Money is obvious, so try to peel the onion and go a little deeper to identify the other needs you and the other person might have.

3. What do you absolutely have to have in order to work with the other person? In other words, rank your wants in order of importance. Know going in to the conversation what are your “must haves” versus the “nice to haves” in the relationship. If something is a deal breaker, know this early on and when the issue is discussed address it openly and with certainty.

4. What issues can you give a little on? Are there parts of your service or product that can be eliminated to reduce price? Can you work on a shortened deadline without risking quality? Identify the items that you are willing to tradeoff in exchange for something from the other person. Do not give something up without getting something of value in return. Studies show that if you know what you are willing to give and what you want in return, you will have a much more profitable agreement. This is because most people give things up and forget to ask for something in return. One way to structure a trade off is to link outcomes together. For example, you might say, “If I give you this, then will you give me that?”

5. Who am I talking to? Is the person you are negotiating with the decision maker? Who else has a vested interest in the result of the negotiation? Should anyone else be consulted? When negotiating with a non-decision maker you need have a different objective. Your objective becomes one of providing information, coaching the other person to speak well of you on your behalf and engendering a sense of confidence that your solution will meet the decision makers needs.

Use these 5 questions to improve your planning and strategizing. If you would like to hire Jeanette to come to your organization to train your employees on how to effectively and efficiently plan for an upcoming negotiation, please call me at 206-723-3472. I am happy to help.

This entry was posted on Thursday, June 14th, 2007 at 8:44 pm and is filed under Planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.