Free Picture :pixabay.com - How To Negotiate |
There are two negotiation
approaches prevailing in the world today, but "unfortunately" only
one that is more widely spread, especially in the negotiation training circles.
First is the
basic negotiation tactics approach, that dominates the training industry
especially in the Western world. It is also practiced widely and naturally in
the developing nations of the world.
The second is the
strategic negotiation approach that is more complex and less common or even
understood in the training circles, among people or in practice.
Negotiation skills in general, are a prerequisite
to success in any endeavor in life, from career progression, buying a car,
resolving conflicts of any scale, growing a business to finding an attractive
partner.
Being a vital skill to learn, I suggest that
understanding the differences between the two approaches is a step in the right
direction before you plunge into an expensive courses, books and seminars on
the subject.
The basic negotiation skills
training prevailing in the market place today is merely a teaching of some
tactics that may help people to outsmart others and get what they want from
them regardless of the consequences.
This training is basically about selling a bunch
of negotiating tactics to people who are eager to learn the skills fast while
being amused and entertained by the presenter at the same time.
In any of this training, you learn tactics and
cliches like: be assertive, win win, be prepared, aim high, be patient, focus
on satisfaction (I like this tactic myself!), don't accept first offer, don't
make large concessions, always be willing to walk away and so on. While this
"teaching granny to suck eggs" approach to negotiation may be
entertaining and fun, it certainly doesn't give the full story or help people
develop any negotiation skill.
Let me assure you dear readers, having come
originally from Egypt where bargaining attitude is a way of life and where
every thing is negotiable, you will be eaten alive if you try to use any of
these negotiating tactics you learned at a course when you negotiate with these
people. Secondly if you want presenters and teachers to talk to you about
negotiation tactics, I can provide them to you by the sack from these old and
great developing nations.
This type of training makes a poor excuse for not
teaching strategic negotiation and put people at risk of thinking that they
have now acquired this vital skill.
Strategic negotiation on the
other hand is a much more complex area of knowledge and yet, once learned and
practiced yields greater outcome that is also long lasting.
The irony in both approaches:
The irony in both approaches is that in order to
practice what you learned in the basic negotiation training, you really need to
act like a "street wise" in your walk and talk or you will look like
a ready and nice meal for lunch to your opponent.
Not only this, I actually believe that this basic
negotiation approach is a culturally inborn trait and cannot be transmitted in
training courses. It is more like you were either born with it or you were not.
The bigger irony and paradox about strategic
negotiation is that while it is far more complex skill and require greater
analytical mind, it is considerably easier to learn. It also lends itself more
to studying and practicing and in some cases doesn't require face to face
"haggling" to achieve great outcome.
Strategic negotiation skill is not a culture
driven inborn skill, it is universal in its application and methods.
Let me illustrate the two approaches by giving you
a simplified negotiation case from the business world.
A Case for illustration:
A large company is buying important Data Base
software to use as the underlying engine for all of its computer applications.
Once this software is purchased and installed, replacing it would be near
impossible because of technical and financial reasons. The price runs into
millions of pounds with a huge yearly maintenance fees. The technical
department satisfied itself while working with the supplier in
"partnership" that the product is the best in the market and have
recommended its purchase to the management.
The buying organisation is now asked to begin the
negotiation to achieve best possible deal.
Basic Negotiation Approach:
Following the basic negotiation approach and
applying all the tactics learned, the company will get good discount because of
the large up front payment it is willing to pay and the basic negotiation
skills applied to the situation.
But here is the problem: as soon as this software
is purchased and installed the whole balance of power for all future purchases
and upgrades changes in favor of the supplier. Maintenance fees will spiral out
of control and the next time the buyer tries to negotiate another deal with the
same supplier he/she will find that his/her negotiating world has completely
changed.
The same nice yielding sales people he/she was
used to dealing with have now turned into real sharks putting their conditions
and demands on the company while possibly using their strategic negotiation
skills that lead them to this powerful position in the first place.
Strategic Negotiation Approach:
The strategic negotiation approach to this
situation is completely different. The strategic negotiator sees the bigger
picture, uses the "whole brain" approach, doesn't wait till the company
tell him that it decided to buy this particular software. He/she is also
working closely with the technical department, the planners and the people who
will make the decision. He/she knows that such software will be needed and that
he/she has to move now and mobilise the company for the acquisition long before
the supplier gets a "sniff" of it.
The strategic negotiator agrees with the
stakeholders on the deal brief and the wish list of the users before hand. He
then adds to it the commercial wish list which must include a long term frame
work agreement among many other wishes.
With this kind of preparation, information and
mobilisation of the company resources and agreement with the stakeholders
before hand, holding a strategizing session can inform the negotiator on the
best course of action to take for this aquisition and best negotiation
strategies to apply before the negotiation begin. Now as they say - the world
is his/her "Oyster", he/she is prepared for the "kill".
What have been Achieved:
What have been achieved in this strategic
negotiation is not only the best deal for the company now but also the
strengthening of the company negotiating position for the next five years to
come even when the company doesn't have the financial leverage over the
supplier.
Under the basic negotiation approach, the deal
left the company in a weak negotiating position for the next five years and
completely at the hands of the supplier.
Strategic Negotiation demands a set of
preparation, analysis and strategies before going into any negotiation, to
ensure a favorable long term outcome before the negotiation begins.
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