As a business owner and operator I engage in negotiations regularly.
Two primary areas of negotiation arise frequently. The first is a situation in which I am working with a candidate and a client, looking for the best way to make a job offer work for both parties. The second is working out contract details with potential clients. I’ve practiced many kinds of negotiation tactics, and I’ve also learned from watching others negotiate. Based on my substantial experience, here are my recommendations on best and worst negotiation practices.
This blog won’t have the regularly quoted “make sure you give the first number” or “let the other person sit in silence”, which are tips you can get from many other blogs and while I think they can be great tactics, I also think it really depends on the nuance of the specific conversation. This article is more focused on the big picture of negotiation and building long term high quality partnerships.
The Game of Negotiation
But first, a story: I conquered negotiations… or so I thought. I was in an Industrial Organizational Psychology class that was taught in the College of Business by a Masters-level business professor who had pretty rough scores on Rate My Professor (iykyk), specifically in the domain of being a difficult, but intentional, professor. This turned out to be one of my favorite classes in my education. In one class he had us play a game of negotiation. We each drew a card that showed the outcome we were to pursue, but we couldn’t see other people’s goals. Classmates concealed their card that had their motivation on it, but you could get a sense of what they were after by what they were asking for. I went around the room and after having some conversations I realized that I could coordinate other people into giving each other what they wanted, and finding middle ground, and when I coordinated enough people I would get exactly what I wanted. If I told the group what I wanted, I would have gotten the same points as the rest of the group. If I misled the group about what I wanted, I could get the most points and win the game. At the end of the game, I won. I got 10 other people to trade and negotiate down, and I came out on top getting the maximum points for the game. I won! Except that wasn’t the end. At that point, the professor said “you won the first segment of this game, but next up is the secret second phase of the game where the other people get to rate if they would work with you again. Everyone share their primary motivator to the class.” We all then revealed the primary motivator on our card. The professor went on to clarify the point of the game, “If this was a business negotiation you would have a bunch of upset relationships behind you because they would feel manipulated.” I won the visible game but lost the invisible one. That was a powerful lesson. Would I have actually negotiated that way in real life? No. I’ve always cared deeply about other people getting what they want and need, however when I had my blinders on I thought this game was about winning points at the end. What I didn’t integrate into my thinking and strategy for the game is that in business, relationships matter massively and are never siloed to the specific scenario at hand. What is more important than strategy? Relationships and understanding how you make people feel. I’m not downplaying strategy, I think that is massively important. I’m emphasizing the human factor.
Contract Discussions
With all that in mind, here are distinct negotiation situations I’ve experienced and they put me in a very different state. Picture yourself in the following scenarios and try to feel in your body how it would shift your approach to the conversation.
Scenario 1: You offer a suggested change to a contract and the person you’re negotiating with says “I’m not sure that value would be good enough for you. I would really like that deal, selfishly, but I don’t think it is a fair deal for you.”
Scenario 2: You offer a suggested contract that many other partners have happily agreed to, so you have reason to believe it is fair, and the person you’re negotiating with says “I don’t like a lot in this contract. I need you to rewrite it, but I’m not going to make specific requests, it just needs to be fixed. My goal is to get the best deal on all points for my company.”
How do you feel with each of those?
The first likely made you feel like you could look out for the other person’s interests, as they were looking out for yours. You likely feel like you’re creating a long term partnership.
The second possibly made you feel confused and as if the other person is trying to win one over on you, so you rightfully feel defensive, and the need to protect yourself against an adversary.
The first scenario might be exaggerated because you don’t often have a partner who is suggesting something that isn’t fair and in your favor. But the spirit of that message isn’t exaggerated.
Candidates Negotiating Offers
Making a job change is a big decision. There are a lot of factors to consider, often impacting many lives outside of the person taking the job. When we are helping our candidates go through offer negotiation we recommend from the beginning that they get as clear as possible about what they need and what details in an offer letter would make them say “yes”.
Especially for people who are not seasoned at job offer negotiations, this process can get turbulent. Instead of coming to the negotiation with clarity of what they need to accept the job offer, we will see a lot of back and forth, multiple requests for a different salary amount, changes in the offer detail requests, and a lack of data or logic shared about the requests that are being made. Not only is this inefficient for the energy of everyone involved, it can be deteriorative to the relationship before a job is accepted.
Getting clear on what you need, providing the company with the opportunity to meet those needs accompanied with logic for why you will add great value to the organization, working together to figure out if there are ways to get creative to meet the company’s needs as well, all while being clear about your passion for the mission of the organization and the team (only if that is true), will lead to a smoother negotiation process for all parties. Remember that the negotiation process is an opportunity to show your best, most professional and thoughtful self to the company before you join forces.
In Summary
In 7 Habits of Highly Effective People, author Stephen Covey recommends reaching a win-win or no-deal in negotiations. When the other person feels that you understand their motivations and are looking for win-win solutions, they are more likely to respond in kind, and to be a better long term partner. Here are some tips to help you negotiate strong deals for strong partnerships:
- Be human, be kind. Bring your heart and human understanding to the conversation. Remember that you’re looking for long term success and partnership. You get the best deal if you find the best working deal for both parties. Note: Be listening for how the other party is negotiating. If they are only out for themselves, see if you can get them to shift to looking out for the relationship so you are both seeking a win-win. If not, you’ll want to carefully consider if the partnership is worth it to you.
- Know what you want. Have a clear understanding of what you seek from the negotiation, and your ranked priorities. Be clear with yourself about your nonnegotiable and your negotiables.
- Understand what they want. Through conversation, get a clear understanding of the motivations of the other party, and their ranked priorities.
- Explain your motivations if they help the other side work to get to a win-win. Through conversation, help the other party understand the motivations behind your priorities and non-negotiables so you can potentially come up with creative solutions together.
- Find win-wins, or no deal. Find ways to get creative, give the other party wins where you can, and make win-win deals. Don’t be afraid to let go of the deal if it isn’t going to be truly acceptable to both parties.
One small ending note about my college negotiation game – after the game was over and the class was wrapping up I was lost in thought. I was embarrassed but also grateful for the hard hitting lesson. Another classmate had also gotten extra points by misleading negotiation and felt called out by the secret phase of the game. They came up to me to complain about how unfair that game was, as we were given incorrect directions and didn’t know how to win. I learned another powerful lesson in that conversation – you can get defensive and fight the lessons, or you can see how the lessons can grow you. The choice is yours. Choose wisely.
I hope this is helpful for your future negotiations. Please let me know in the comments of any successes or learnings that you experience.
PS This article title “Mastering the Art of Negotiation: Tips and Strategies for Success” was generated by ChatGPT, think it did a good job? Let me know!
