There is one central idea, one key concept that is critical to understand.
Get this right and you will be compensated with profitable, gratifying and long term business relationships in which price is not the only element. If you fail to get this right, you will struggle with sub optimal relationships and you will likely end up bartering about price in probably all of your negotiations.
The key element is understanding the interests of the other side in your negotiations; this is an important element taught in negotiation training.
Generally we have a good understanding of our own objectives, needs and desires. When we negotiate with others, we typically set about trying to persuade them to see the world the way that we do. We think it makes sense to us, surely it must make sense to anyone that is reasonable. The problem with this stance is that it completely disregards the objectives, needs and desires of our counterparts.
What will it achieve trying to convince someone to do anything that they don't trust would be in alignment with their objectives, beliefs and wishes?
You will not under any circumstances convince someone to agree with you by arguing with them, quite the opposite will happen. Because you tell someone that they are incorrect and you are the one that is right, you will compel them to defend their position rather than agreeing with you. Nobody likes to be wrong and if you tell someone that they are wrong it will become key for them to defend their position because their personal integrity is at risk.
It is rare to achieve agreement with anyone after you have told them that they are incorrect, you have also managed to paint yourself into a corner. If it was important for you to reach agreement and you do not manage to win the argument, then you will have to sacrifice your own integrity by departing from your 'correct' stance to accept the argument of the other side.
If you want to reach agreement the easy way rather than have your negotiations escalate into a positional argument, here's my suggestion:
Start by asking some questions, the best of which you can ask will be questions designed to expose the interests behind the positions that your counterparts have assumed in the negotiation. Open questions are the best kind of questions to reveal the interest or motivators that reinforce your counterpart's positions.
Here's a great question you can ask and at the same time endorsing your negotiation skills: Why are you negotiating with me / my organisation?
This is very probably the best question to ask at the beginning of a negotiation. Follow this question by asking your counterpart to elaborate on and to rank the reasons offered in response to your questions. Then you will have a prioritised list of their most important interests.
Sample Interests:
- Individual: Security, Acknowledgment and Control
- Organisation: Profit, Risk Avoidance and Strategic Fit (Some important factors you would have learned in purchasing training)
Once you have an awareness of your counterparts' key interests it is a good idea to share your own interests. Once all the parties to the negotiation have disclosed their interests it will be much easier to identify the areas of common ground and then it is useful to present your argument in the context of how it would meet their interests. This way, you will not have to persuade the other side that your argument is correct; you will only have to show that your suggested course of action would meet their interests.
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