Not negotiable! Why business must negotiate more effectively

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2016

Negotiation is back in the headlines - and not for the right reasons. A British think tank, the Institute for Government, has warned that Britain lacks enough skilled negotiators to manage Brexit. Meanwhile, the UK government has been criticised for refusing to outline what it hopes to achieve from its Brexit negotiations, believing that to do so will limit the scope of the offer it receives from its negotiating partners.

Similarly, a proposed trade deal between the EU and Canada recently came perilously close to breaking down after the Canadian minister walked out of talks and the Belgian Prime Minister announced that Belgium was not prepared to sign the treaty.

While ineffective negotiation within governments receives high-profile media coverage, the problem is equally widespread within businesses and highly damaging to organisations across all industries. Research by Huthwaite spanning four decades reveals that most people, in most places, negotiate badly, most of the time.

That’s costing businesses a lot. It means sales terms are leaving potential profit on the table. It also means buyers don’t get the best supplier terms and it means colleagues from different departments arguing over resource allocation or project priorities.

The good news is that it doesn’t have to be this way. We’ve seen how business can incorporate more effective negotiation techniques and deliver results simply by asking more sensible questions, or by adjusting their method according to the cultural background of the other party. We know there are learnable and measurable verbal behaviours that can make all the difference between success and failure at the negotiating table.

Here are five tips for negotiating more effectively.

Do your homework - the right way round

Too many people dedicate too much of their time to preparing facts and figures. They think that arriving armed with all the numbers - whether that’s financial goals, cost of concessions, contract lengths or delivery timescales - means they’re ready to negotiate effectively.

In fact, that’s much less than half the story. The most skilled negotiators will spend twice as much time on planning how they will use information of this kind in the interactions that will eventually determine what is agreed.

This means thinking about the environment you want to set during the meeting, how will you move the balance of power in your favour, the ways you can establish common ground, the roles each party will play and what you need to find out from the other party and at which points.

Ask, don’t tell

A skilled negotiator will be much more concerned with seeking information than giving it. Careful questioning provides insight into the other party’s position and allows you to understand their strategic objectives. Also, incisive questioning can create doubt in their mind about their approach. That’s important because doubt creates movement - and movement takes you closer to your goal.

Feelings matter

Your feelings are important. Simply saying: “I’m delighted we’re moving closer to an agreement on price”, or “I’m disappointed that you’re not able to extend the contract length”, is powerful verbal behaviour. While the other party might disagree with you on the substance of the negotiation, nobody can refute comments on your own feelings, which means referring to them can help establish a co-operative climate. Some 60 per cent of skilled negotiators in our latest research say they do it.

Don’t be irritating

Self-praising declarations - “I’m being very reasonable here”, or “I think you’ll agree a contract review within two years is very fair” - are among the phrases we call irritators. “I’ll be honest with you” is another example - were you being dishonest before? The most skilled negotiators are only a fifth as likely to use these as average negotiators. However, among 1,300 surveyed negotiators, 71 per cent admitted to using phrases like these. It’s important to steer clear.

Counterproposals can be counterproductive

Counterproposals rarely work, which is why skilled negotiators use them only half as often as average negotiators. Despite this, far too many still fall into this trap, even among the most experienced. Responding with an immediate alternative to the suggestion proposed is equivalent to saying: “I’m not listening to you, I have certain targets and I’m sticking to them.”

The trouble is, if you’re not listening, you’re not really negotiating. If you are, you might be able to get a good deal in a negotiation with 27 other governments - and you’ll definitely be able to deliver real results in your business.

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About The Author

Tony Hughes
Tony Hughes

Tony Hughes is CEO of Huthwaite International, a specialist sales and negotiation training provider. He has designed, implemented and delivered projects to 1000s of people across 29 countries and on three continents.