“So much of life is a negotiation – so even if you’re not in business, you have opportunities to practice all around you.” – Kevin O’Leary
When we think of negotiations, we tend to restrict our thinking to business situations like deals, compensation, office location etc. However, we negotiate in our daily lives starting as early as toddlers when children hold their parent’s hostage to have their way. To talk about some tips and tactics to help us amp up our negotiation game in every walk of life, the Society’s CFA Women’s Network hosted Laurel Bellows on November 27, 2018, at The Standard Club.
Laurel Bellows, founding principal of The Bellows Law Group, P.C. is past president of the nearly 400,000-member American Bar Association, past president of The Chicago Bar Association and past president of the International Women’s Forum Chicago and The Chicago Network. Bellows is currently serving on the Executive Committee of the InterAmerican Bar Association.
Bellows began the event with a short video clip of a comic which was aimed to explain how brains of men and women work. It was good humor that shed light on how men and women think differently and hence negotiate differently. Overall, it was a great event with simple yet important takeaways we all should focus on while negotiating. Some key themes to discussed during the event are briefly described below.
Know your opposition
Knowing how the opposition thinks and anticipating their goals and their best alternatives for the negotiation can help you strategize your efforts.
Determining the goal of negotiation
By determining what constitutes a successful negotiation to you can help you decide what works for you and how flexible you could be during the process. It is important to think about what kind of relationship you would like to have in the future with the counter party and how their non-performance could affect you. At the end of the day a successful negotiation is when you have a viable deal for both parties.
Preparation is Power
Key is to Prepare, Prepare and Prepare. Do not negotiate with your gut! Determine authority of the person you are dealing with and make sure they can sign off on the negotiated terms at the end of the conversation. You do not want to waste time negotiating with a person who would need approval from a higher authority which almost every time leads to a counter offer to your best negotiated terms. Gather knowledge, know your opposition and visualize your deal. This process will help you figure out motivation of the deal for yourself/client, define finite priorities and be able to articulate your position succinctly in 5-7 words. If you are dealing with a difficult person, be firm and don’t be afraid to walk out! If on the phone, respectfully let the other person know you are not comfortable with their behavior towards you (especially if they are shouting) and hang up. Deciding on where to hold the negotiations, your place or theirs? Your office will enable you to take control, their office would give you the ability to walk away. Whichever the case may be, own the room you walk-in!
Build a working relationship
Clarify your position, propose creative options and be consistent to establish trust/reputation with the opposition. Never lose sight of your reputation and listen closely to your opposition. Do not plan your response while listening to them, the brain can only focus on one!
Do not have more than one best alternative to what is on the table at any given time during a negotiation. The best alternative may change constantly as you may choose one over the other but avoid having more than one at any given time. If the BATNA is no deal you walk out! Make sure you are aware that walking out could be for good.
Control the Agenda
By controlling the agenda, you will be able to focus on objectives, control information exchange timing and who makes the first offer.
Persuade the Opposition
Be patient and listen to your opposition. Your tone of voice matters depending on who you are against. Mirror your opposition to engage with them and build trust and be prepared to have uncomfortable conversations. It is ok to be fearful, but you may be able reframe the situation with optimism and further the conversation with curiosity.
Use accurate facts asserting informed certainty. Do not be afraid to interrupt to take control of the conversation but do so respectfully. It’s a good idea to have a default expression like a light smile to be unpredictable and be sure to practice a few default moods ahead of time. Power language is important. For example, using more ‘ands’ (positive) in place of ‘buts’ (negative) can make a difference. Try recording your ending sentence to see whether your statements have a hint of a question or uncertainty and address that. Use open questions to gather more information and use ‘blocking’ technique (answer with another question or refuse to exchange information at the time). Try to avoid impasses by talking past a ‘o’ by either stating facts or moving on to another subject.
Avoid negotiating on email unless you really must. It is easy for the opposition to say ‘no’ not leaving much room to negotiate. During team negotiations make sure you know ‘who is who’! A telephone negotiation can happen from time to time. Be prepared and have an agenda as small and simple as conveying a deadline or timeline or a mood. If you get a call suddenly, ask them call back in 5-10 minutes to make sure you are prepared and have an agenda. There is no excuse for not being prepared!
Reaching an agreement
Leaving a little bit something on the table sometimes during negotiations may help build long-term relationships. Attend carefully to the dates and time concessions. After the deal, the opposition party may come up with minor changes like a week or two early delivery dates or a minor design change in packaging. It is best to either refuse outright or ask something in return. It could be a small ask even if you don’t care much about the change but if not done at that time, expect many of such nuances down the road. Just be resilient!