In my professional career, I have had the privilege of being involved in many situations where two or more parties meet and undergo hours of conversation with the objective of seeking an agreement, resolve differences, obtain a mutual benefit or satisfy interests at stake. These situations as you may have inferred, are referred to as Negotiations.
In my career I have been able to successfully reach achievements in negotiations, driven by unexpected results, dealing with conflict and working with unimaginable challenges. I have also had my fair share of failed results. Still in each and every one of those cases, my end goal consists of compiling the lessons I learned and use them to improve my skills as a negotiator, and exceed the expectations my clients and employers place on me. Some have dealt with money, others with contracts, labor, materials, and each one of them has left a valuable experience.
It’s not easy to close a good deal, however I have learned that as long as certain factors are considered, you may have a better chance of being able to achieve it. The more prepared you are on these factors, the easier or harder your negotiation will be.
1. Document yourself.
Countless times I have seen negotiations fail because the people dealing came to the table without being well-documented on the issue they dealing with. On the other hand, I have won dozens of successful negotiations only by having done my homework, and by being informed on all the variables I needed.
A typical deal in the business world is made up of four elements: business, operations, legal and sales / marketing. Any negotiator must document themselves on each one of these elements, due to the possibility of gaining a competitive advantage by properly understanding one or many of them. Compiling as most information as you can, and filtering what is useful is the first step towards a good deal. For instance: if my company is providing a service to a customer, and the customer is looking to take advantage of a specific clause in their contract, but I know service has been provided and my client has delayed payments, right there I have discovered an opening I can use in my favor. Therefore, I must be able to identify any potential weakness on the client’s end, and exploit it. He may do the same on my end, and that is where they key difference is: whoever is better prepared, will be the one determining the outcome of the battle.
2. Be respectful and mark your territory.
Some time ago, I was assigned a very complicated case in my company. It was a client who had two open lawsuits against us, and on paper, it seemed like the client had everything to win. My mission was to convince the client to settle out of court and reach a satisfactory agreement on how to compensate them. Thanks to a little research I conducted and from past history, I learned from my coworkers who had unsuccessfully dealt with them that this client had a very difficult personality and it was very hard to avoid having meetings with them without reaching the personal level of disrespecting and insulting us.
In this case the key element is to mark your territory through respect. First, have a strong and confident handshake: send the message right from the start, and let them know that: 1) There will be differences, however mutual respect must be kept at all times; and 2) Both parties oversee the interest of their respective stakeholders. While this is not a war, it must be treated with the strategic protocol of war.
Even after mediation is done, ugly faces are shown, and a few threats are issued, close your meeting by once again shaking hands with your counterpart. Again, this sends the message that you are leaving the door open for a future opportunity in which both interests may share common ground.
3. Break the ice
This may sound cliché and more geared towards a personal affair -like a date- than an actual professional negotiation, however in my experiences I have observed that breaking the ice carries a significant weight that can make a difference in a negotiation. Only on very punctual occasions (primarily due to time restrictions, or the gravity of the situation), you should not start a negotiation by going straight to the point.
Depending on the case, there are times where the stakes are high. There is tension, expectations and nerves around the table. There may be a key account or a big contract in jeopardy. The important thing here is understanding that outside what is being discussed, there are common interests that the people sitting on the table can share. There even may be a hobby or an outside of work activity we may have in common.
As a tennis player, I can make the analogy of how I play during the warm-up before starting a match. My goal is to keep the ball in play, not hitting it very hard, going as far as to try to read the ball’s label. It’s a relaxation ritual that precedes the real deal of a match. Before beginning your negotiation, take five minutes to talk about other topics with your client, with the sole goal of easing up the atmosphere.
4. Plan, organize, differentiate and lead
You must never get to a meeting without a plan or an order of what is it you are about to negotiate.
Suppose you have a client interested in negotiating financial terms, legal affairs and operational issues. Where do I start and how do I board it? What typically tends to happen is that negotiators mix everything up. For instance: “I won’t pay until you can guarantee this task is done.” If you accept this, you have fallen to a classical error where the client probably does not have any strong arguments, and is using anything as a support for their claims. The correct approach to respond to this is: “As long as we have a service contract, you have to pay for our service, regardless of what is happening from an operational standpoint.” Every item must be dealt with its own separate agenda.
Of course there are ways to avoid this, like starting with negotiating the issue you have a greater probability of winning. Deals that start on the right foot, most likely end-up well, therefore it is good to have a positive feeling from the get-go. In case a compromise is needed, then the correct approach should be: “I guarantee my operational service, and I will make sure you receive it”, and then proceed to the next point in the agenda -for instance, the financial aspect.
5. Keep focused and read the table
There have been several articles written about body language and tells. I have become familiar with a lot of them, and used many of their theories to my benefit.
As soon as the clock starts ticking, your main focuse should be about controlling everything that is happening with everyone involved. The three main aspects you should set your attention to are:
- Eyes: these are the first reflex humans use to respond to any given situation. Make eye-contact at all times, especially when speaking affirmative sentences. Avoid blinking in excess or looking away in key moments.
- Head: tilting your head, fixing yourself around, moving in an odd manner, are common evidences of distraction, uncomfortable feelings, anger, and disappointment. Keep a straight pose, but do not tense your muscles.
- Voice tone and expression: similar to the above. Your voice determines how good or bad the conversation is flowing. Unless you are dealing with a very unique and special situation, there is no need to raise your voice. A confident tone is more than enough.
All these aspects must be managed collectively.
6. Express your ideas in a coherent and logical way. If you need to, amend and make revisions to your statements to be clearer.
Back when I was taking my MBA, on the first day of Mathematical Finance class, a classmate who was sitting next to me kindly asked me: “Hector, where does the number e come from?” She had a degree in psychology, and this was her first time seeing an alphabetical letter used as a symbol to represent a number.“
Since I majored in Math, I thought of hundreds of ways to respond to her. But since she was a psychologist, I needed something quick, concise and precise so that she could understand. My answer was: “It’s the base of the natural logarithm.” I could see the look on her face turning more confused than how it had been moments before she posed the question (notice how I used tip #5 listed above, and I was able to read the situation).
I apologized to her and grabbed pen and a piece of paper. I proceeded to explain the origins of the number using the problem raised by Jakob Bernoulli and compounded interest. At that point her body language completely changed for the better, because while not being able to understand the mathematical implications, she clearly understood the core reasoning behind the foundation of the number. Then I jumped to Euler’s identity, convergence of series, and finally the main reason why e is the base of natural logarithms. At this point her body language showed relief and satisfaction, and she was even able to recite the explanation I just gave her, while at the same time completely understanding it.
While this was not a negotiation per sè, the key element to highlight here was that I was able to immediately recognize that I had made a mistake, and that I was able to reassess and revise myself in order to reach the desired objective.
Sometimes in negotiations, people assume things or take things for granted, believeing that affirmations are implicit or given when in reality they are not. Therefore, being able to express yourself in a coherent way will make you earn several positive points, because this will show that you have deep understanding of what is being discussed.. Being able to rectify, is even better received, because you will be seen as someone open to improve. However do not revise too much, as this will be seen as a sign of weakness or poor preparation on your end.
7. Act when you perceive weakness, listen when you see strength.
It has been said that sharks go for their preys when they smell blood. The same happens in business. If you have followed all of the above steps, eventually you will reach a point where the other person will show a sign of weakness. This is the moment where you have to take the offensive and attack. Everyone has a weakness, you just have to find it. This is because on every negotiation, everyone sits down to win something and to lose something, and you need strengths and weaknesses, otherwise it wouldn’t be a negotiation. Special attention must be given when I mention act. Sometimes negotiators freeze and do not react in time, or react when it’s too late.
When the other party is on the offensive and feels strong, then regroup yourself, let him lead, let him talk and ventilate. Look at them, pay attention to what they say and be aware of any tell or hint they may give away. Normally this tends to allow me to have the opportunity of gaining the initiative. Be an active listener and follow their lead, until you can take it from them
8. Keep an Ace under your sleeve
Another cliché, but it is never bad to refresh it. Personally I like to say “Keep an Ace, or a King, a Queen or a Jack under your sleeve”, as in “keep something”, or “use one, but keep the rest for future occasions.”
A little subtle tip to keep in mind is to keep your best card for the final hand, the hand the client was not expecting to lose. This brings excellent results when everything seems lost, and the other party feels they have won.
On one occasion, I was meeting with a very important client who had all his portfolio serviced by out company. He was extremely upset with our company, with the previous manager who had preceded me, with our workers’ performance, and overall he was a few seconds away from pulling a bat and start swinging it at us. He wanted to cancel our contract and sign a new one with our competitor. I tried everything I could to try to convince him not to do so, but everything seemed to be futile. Then I had an idea. I asked him to give us a last chance with an interesting kicker. I said to him: “Don’t give my company a last chance. Give ME a last chance to prove that our company will serve your needs. Sign all your portfolio to our competitor, except for 10% of the accounts which will remain in contract with our company, under my direct supervision and attention.” The kicker was that the 10% of the accounts I wanted to keep were his VIP Key Accounts. I continued: “We will do a small competition to determine who provides you with a better service: either our competitor with 90% of all your non-VIP portfolio, or us to your VIP clients.” The client did not expect that. After a long pause, he agreed to my proposition. Two years later, he signed the 90% of his accounts back to us and he became one of our best clients, and a very good friend.
9. Only promise something you can fulfill
If you have reached this stage of the negotiation, don’t party just yet. There is still work to be done, and your word is on the line. There are agreements, objectives and goals that must be met. The question is: will you be able to deliver?
Nobody likes being disappointed. This is something that is imbedded in our DNA. No kid like it when Santa Claus forgets their present. False expectations are fatal in negotiations, and no client likes it when their expectations are not fulfilled.
This is why you must have a firm grasp on reality, on the current situation and the desired state, as well as the resources you have available to arrive to the desired state. Your client will value much more your sincerity in being able to tell them that you will not be able to meet their goals, rather than any illusions you paint on their minds.
10. Show yourself as a confident leader and trust yourself
One of the most interesting anecdotes I read from Steve Jobs’ biography, was when he announced the sales launch of Apple’s first personal computer. He had zero computers manufactured at that point. Steve sold a product he didn’t even have ready in his hands. How did he achieve this? He was confident his team could do it, and he trusted himself that he could lead them to do it.
Steve convinced investors, journalists, and everyone in attendance that Apple’s personal computer was the best invention of the century. Years later, Steve used this exact same approach to launch the iPhone in 2007.
Wrapping it all up:
In short – trust yourself on being a good negotiator. Show what you have learned. Feel that you can achieve anything you set your mind into.
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