Your best work is done before you get to the negotiation table.
The area of negotiation that most affects the outcome is the part you have most control over – the preparation. Research has shown that the best prepared negotiator is the one most likely to get the best outcome.
Preparation that gives you a head start on your opponent can be achieved by anyone willing to spend the time. Here’s nine factors you should prepare.
1. Know the ‘pie’ – fixed or variable
‘Fixed pie’ negotiations are those where the only way I can get a better outcome is to get you to accept a lesser outcome. These never result in a win-win outcome. ‘Growing the pie’ negotiations include variables that creative negotiators use to create high perceived value for the other side at little cost to them. Thinking creatively can even allow you to turn a fixed pie into a variable one. Perhaps the asset (a motor vehicle) is fixed, but you could add variables like payment terms, advanced servicing. The salary might be fixed, but flexibility of hours could add significant value for some candidates.
2. Know the impact
Will the outcome of this negotiation impact on any other current or possible future negotiations with the other party? You don’t want to compromise any negotiations going on now or set precedents that might disadvantage you at some time in the future.
3. Know which side is under the most time pressure
The side under the most time pressure has the greatest incentive to be flexible and may be prepared to give more as the deadline gets closer. If the other side is under the most pressure, your advantage grows daily. If the time pressure is on you, be aware this is a weakness and that if the other side becomes aware of it they will use it.
4. Know the relationship
Is this a one-off negotiation or are there likely to be future dealings? Is the relationship important to you? If the answer is yes, is it important enough for you to be more generous with your offer(s)? If the answer is no, will this change your approach and tactics?
5. Know the other side
Is their negotiation style primarily competitive or cooperative? How likely are they to try to bluff? If you haven’t negotiated with them before, is there someone else you know who has that you can talk to? Is there anything you can find out about them that they might not expect you to know? Anything you can do to compromise their confidence in their preparation is a useful tactical tool.
6. Know what they know
Research yourself. Find out what they know about you. Don’t let them spring any surprises on you.
7. Know some accepted authorities
Facts and figures are so often misrepresented in negotiations, nobody takes the other side’s word. Try to find some authorities that you will both accept as reference points.
8. Know your ‘negotiable’
Build a list of all the negotiating issues you are prepared to bring to the table. Priorities them. Try to build a similar prioritized list for the other side. Issues which appear lower on your list but higher on theirs are the ones that you will get most value for when bargaining. Determine what will be your starting point and your bottom limit. Be as precise as you can.
If you cannot priorities a list for the other side in your preparation, try to determine their priorities in your preamble discussion with them before you start putting offers on the table. If appropriate, try to have a pre-negotiation discussion with them where no one would be making any commitments; you would just be getting to understand each other better to help you create the highest-value offers.
9. Know your alternatives
The side who is most able to walk away from a negotiation will negotiate strongest. You can only do this if you have an equivalent alternative to negotiate with. If you don’t, and this party is your best or only option, then do you have a Plan B to offer them if all else fails?
All the latest studies have shown that preparation and planning are the keys to success in negotiation. Sides that prepare and know precisely their goals in a negation always do better than those who go in ‘hoping for the best’. Those who set specific timelines do better than those who are more flexible. Many things happen in a negotiation that you don’t have control over; but your preparation is not one of them. Everyone is busy; but using that as an excuse is a mistake. Walk in best prepared – and walk out most satisfied.