Working Wounded: Negotiations

Q U E S T I O N: I'd like the people in my company to do a better job of negotiating contracts with our customers, but most of the materials I've seen on negotiating are very complex. Can you suggest a simpler guide to negotiations?

A N S W E R: Merle Crossman filed a lawsuit against his fire insurance company claiming they owed him $75,000 for his house that recently burned down. There was only one problem: he filed the lawsuit from the jail where he's serving a sentence for burning down his house. Crossman maintained that since he pleaded "no contest" to the fire he was still entitled to the insurance payments.

Unfortunately, he's not alone in practicing slash and burn negotiation tactics. It's important to help your people identify the keys to a successful negotiation and how to work with the other party to achieve an outcome that benefits both sides. I've identified the three most important areas in a negotiation along with strategies for both sides to get what they need in each of these areas. For more information on negotiaions, check out The Only Negotiation Guide You'll Ever Need by Stark & Flaherty (Broadway, 2003).

Time. A huge number of problems in negotiations can be traced back to the two sides operating on different timeframes. That's why it's so important to establish a mutually agreeable timeframe right from the start. Stark & Flaherty also taught me a very important fact about the timeframe of a negotiation. Most concessions and settlements occur in the last 20 percent of the time allowed. So they advise not trying to push too hard, too early for agreement. Agreements need time to develop.

Information. Unfortunately, information is often like a needle in a haystack during a negotiation. You've got to sift through a lot of stuff that doesn't matter to find the one or two key issues that do. You can give this process a boost by asking the other party what information they need and doing what you can to give it to them. And then encourage them to provide you the information that you'll need. Most negotiations use information as a weapon; set a different tone in your negotiations by turning information into a tool that both sides can get access to.

Power. There are many different types of power in a negotiation — political, historical, positional, financial, cultural, etc. Rarely does one side hold all the power, if for no other reason than it would be to their benefit to work out an agreement with the other party. It's also common for each side to have areas where they have a lot of power and other areas where they are lacking. It's important to learn about your own sources of power and the power that the other side possesses and then to harness it to the benefit of both sides.

Properly leverage these three variables and your team won't burn any bridges in your next negotiation.