We are all negotiators, and we face challenging and complex problems of persuasion and influence on a daily basis. We manage workers and work for managers, deal with friends, family, colleagues, clients, merchants, and organizations all the time. Successful negotiation requires agreement and collaboration with other people. Since individuals often do not share the same interests, perceptions and values, skill is needed, personally and professionally in negotiating.
Understanding the dynamics of negotiating is critical in the business world, and is a topic we discuss often within our firm. Learning the art of business negotiations is a necessity for our partners and associates alike. There are numerous seminars, books and theories written on the subject; but the bottom line is that if you don’t master the fundamental skills of business negotiation you could be losing money. This blog will be dedicated to the art of Business Negotiations.
There are three inherent tensions that exist in all negotiations, whether the goal is to make a deal or settle a dispute. These tensions will always exist, they cannot be eliminated but they can be managed.
The first tension is the conflict between the desire for distributive gain (getting a bigger slice of the pie) vs. opportunity for joint gains (finding a way to make the pie bigger). Without sharing information, it is difficult to find trades that might create value, but unreciprocated openness can be exploited.
The second tension is the conflict between empathizing with the other side (demonstrating an understanding of the other person’s interests and point of view) vs. asserting your own views, interests and concerns. Assertion without empathy risks escalating conflict, while empathy without assertion risks jeopardizing ones legitimate concerns.
The third tension is the interest of the agent (lawyer) vs. interest of the client; and the professional reputation and embarrassment when a client changes course.
Additionally, we should all be aware of the 5 most common mistakes that must be avoided to get the maximum out of a business negotiation.
Underestimating your own authority, ability and strengths
Assuming you know what the opposition wants
Overestimating your opponent’s knowledge of your weakness
Becoming intimidated by your opponent’s prestige, rank, title or educational accomplishments
Being overly influenced by traditions, precedents, statistics, forecasts, or cultural icons and taboos