Negotiation and Decision Making (Part 1)
Manhattan Review is very excited to present a chapter from our new book, Negotiation and Decision Making, which is coming out in conjunction with a MBA training seminar in california. The book also serves as the base for our Negotiation and Decision making class which is taught by expert practioners who have had substantial experience with million-dollar deal negotiations. Our Turbocharge Your Career series has seven more books planned for publication. All of the eight books will be available on Amazon.com and in Barnes and Noble stores across the US. We will also host this class online or in-person at selected locations around the world. Email us at email@example.com for more details.
5.1 Important Steps to a Good Deal
5.1.1 Understanding/Problem Solving
Prior to engaging in a negotiation, it is important to get to know the scenario and “the playing field”.
The scenario is composed of various elements:
Time – The pressure created by time can cause negotiators to make mistakes. Therefore, if you know how to use your time wisely and plan well, you can achieve a better outcome from you negotiation.
Information – Having more information or access to more information can create the leverage you need for a successful negotiation. Information allows you to create more opportunities and alternatives.
Power – Power is in many ways purely the perception of the other side. You must appear to have power even if you really don’t.
Passion – Passion will be the final factor that puts you ahead of your opponent. The more passion you have, the greater your ability will be to get the deal.
There are certain facts that you must know about the other side to engage in a mutually successful negotiation.
- Their goals and objectives broadly
- What they want out of this particular negotiation
- Pressures on them
- Who makes the final decision
- Their possible bargaining zone
Please check with our Pre-Negotiation Assessment Chart to be sure that you cover all the elements.
The above will necessitate research on your part. You must have ample information available before you try and successful negotiate. There are many tools available.
- Public information (financial reports etc.)
Not only know what you are negotiating about, but know who you are negotiating with. Without proper research before hand you will not be successful in your negotiations. By having information, you will be able to test them on their level of honesty. You can ask questions about their situation and if you know the answer and are being lied to, you will be able to assess their negotiation style rather quickly.
Some authors recommend outlining some possible outcomes:
- Best Possible Outcome – This is the best possible, but not necessarily realistic outcome
- Worst Possible Outcome – The worst and least acceptable outcome
- Expected Outcome – A likely and somewhat acceptable outcome
- Resistance Point (Walk-away Point)
- BATNA (Best Alternative to a Negotiated Agreement)
5.1.3 Building Communication
- Share information: Hiding all of the details creates a negative environment
- Active Listening: Show that you want to know about their position and what are their needs and wants of the negotiation
- Acknowledge their Needs: Show them that your business can help them and give them what they want. If you don’t they will turn to someone else.
- Ask questions so you can discover their needs and decide whether or not you can meet them.
5.1.4 Controlling the Negotiation
The more control you have over certain aspects of the negotiation, the more likely you will be to gain an advantage. Here are some ways to gain control:
- Speak First – In many instances, if you speak first you will control the tone and tempo of the rest of the negotiation
- Ask Questions – By asking questions you will control the content of the negotiation. By asking questions, you are also finding ways to come to an agreement
- Don’t Argue – The key to negotiations is sharing information and not being combative.
- Prepare to meet the other person’s needs – fully understand the other side’s position, motivations and needs and be ready to meet them
- Listen – The more you understand of the questions you ask, the more control you will have on the outcome of the negotiation.
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