Business Summit: How To Negotiate

This article is one in a series covering The Stack’s Spring Business Summit. Take your business to the next level with the help and advice of our business experts.

At its core, negotiation is the process of creating value and finding a fair way to divide that between all parties involved. And anyone can become an exceptional negotiator. It’s not something you’re either born with or not. You don’t need the ‘gift of the gab’. It’s a muscle that needs strengthening like any other.

But where do you start? As part of our Spring Business Summit, Skye Lawrence – an expert negotiator with previous experience at Vantage Partners, as well as at Harvard’s Business School and Kennedy School – shared her take on interest-based negotiation. Read on to hear more about the core three components Skye finds crucial to exceptional negotiation: interests, options, and legitimacy.

If you’re a negotiation novice or just want to tone up on your already-decent skill, why not look at interest-based negotiation? It involves figuring out what other people want and becoming more clear on what you yourself care about.

So first and foremost, you want to get super-clear on your interests. What really matters to you? What do you actually need? And what about the other party: what do they actually want from this exchange? The best negotiators remain curious about what their counterpart wants. And they use this information to approach negotiation in a more productive, fair way. Looking to generate more value, rather than simply haggling to split any value that already exists.

Now, negotiation isn’t about giving up your own interests for the other party, but rather growing the pool of value to offer more to everybody. We often leave a huge amount of value on the table because we don’t ask enough questions – or the right questions – to uncover the core interests of everyone involved.

Communication is crucial here. Phrases such as “Help me understand…”, “What makes you think that…” and “To me, it seems like…” can be brilliant for broadening your understanding. By digging deeper into both your own and the other party’s interests, you uncover a wider variety of solutions.

Next up is to assess the options. What are some solutions you can come up with that will meet your own interests and are also likely to meet the other person’s? You want to get creative about solutions that satisfy everyone. To make this easier, it can help to dig even deeper into what underlying interests are at play. For example, if someone says they want more money, figure out why they want it.

Part of being a great negotiator is also acknowledging you might not have all the best answers. So be open to hearing better ideas. If you’re constantly critiquing someone’s ideas, it stifles their creativity, reducing the overall productivity of the exchange.

It’s now time to consider the legitimacy of the negotiation; deciding what’s fair. You want to find objective criteria. Look for existing standards that set a precedent – market data, industry practice. If you’re negotiating a new salary, look at Glassdoor for what others in your position earn. If you’re putting an offer on a house, check Zoopla for average selling prices in the neighbourhood. You want evidence that what you’re both getting is fair in terms of the wider industry or situation.

Also, ask yourself: If you were in the other person’s shoes, would you feel this solution was fair? And this legitimacy works both ways. It helps you justify your price (or requirements), while also helping improve your understanding of why someone else is asking for what they are.

We often forget during negotiation that we have alternatives. That we don’t always have to make a deal right here and right now. Striking a deal might be important, but we always want to be really clear on our alternatives first. What is your best alternative to a negotiated agreement? Or BATNA, as you may know it. If you have a better job offer somewhere else, you could take that. If you have other suppliers of a similar standard, you could choose them.

You also want to consider the other party’s best alternatives. If they don’t take your services, who else might they go to? Can you leverage this to demonstrate why you’re the better choice?

Similarly, if you can understand why looking elsewhere is right for them, you have an incredible opportunity to set the precedent for a long-term, trusted relationship. If you know you’re out of someone’s budget, explain that it’s OK, but in six months when they have more budget you’d be happy to revisit.

Which brings us nicely on to relationships. One of the biggest differentiators for negotiation is whom you’re negotiating with and how often you’ll be seeing the other party. If you'll never see someone again, it’s vastly different stakes to someone you’ll be dealing with every day.

One of the most common errors made in negotiation is valuing relationships over solving the problem at hand. For this, we like the phrase ‘soft on the people, hard on the problem’. Wherever possible, look past the personal, leave your emotions out of it, and focus logically on solving the problem, without compromising the relationship or compromising what you deem to be fair.

Excellent negotiation is nearly all in the preparation. And these are some key topics to consider and revisit whenever you find yourself in the position to negotiate. Whether it’s for a higher salary, with suppliers, or over the household chores with your kids, the more prepared you feel, the more confident and level-headed you’ll remain. And, as a result, the more creative your solutions and logical your decision-making will be.

This article was taken from a live membership workshop. You can access the hour-long recording, and much more, on demand when you sign up to become a member.

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