How to Negotiate Effectively

4-step process to become more effective at negotiating and engaging with the other party.

How do you communicate your needs to the world? We communicate our needs to the world by persuasion and negotiation. How effective we are at communicating our needs determines if our needs are met. The key word is ‘how’. People listen first to the volume of your voice, then the tone, and lastly the context. In order to communicate effectively, you need confidence and your confidence level is based on knowledge.

When you have subject matter knowledge, you can be more creative and laid back regarding that topic. You will already know specific facts for certain, and know how to respond to a multitude of questions. When you confidently ‘show up’ to a negotiation, instead of just being present, you will be a better negotiator for you or your company. Being prepared and ready to engage is a huge part of what makes a negotiator great. 

Developing Confidence

Many people have anxieties about negotiations. The best way to overcome this is to see them as a conversation rather than a business transaction. That way, you will hopefully be more confident and relaxed in attempting to get your needs met. Of course this is easier said than done, but this article will aim to provide you with the tools to get you there. 

Many people are afraid of or altogether avoid negotiations. In order to combat this, you need to develop a variety of skills, one of which is overcoming your biology (really!). There is a system in the brain that controls emotions, including anxiety and fear. This is called the limbic system. In order to be an excellent negotiator, you need to overcome what your limbic system is telling your body to do.

Many times, people face anxiety when thinking about negotiating because you have a negative image of what a negotiator is. Is it an over-confident car salesman? Is it the panel of interviewees when you are up for a promotion? It is reasonable to first be afraid of negotiating with these individuals, but you don’t have to be!

Who Do You Have to Be?

The most important thing in a negotiation is to be yourself. Pretending to be a master negotiator when you are not will undermine your true self confidence and cause you to be even more afraid. You need to find your own agency and confidence when deciding how to present yourself in a negotiation.

Popular Negotiation Press

There have been various authors and researchers devoted to understanding the art and biology of negotiation. One of these works is a book titled ‘Getting to Yes’ by Roger Fisher and William Ury. This book and their research forms the basis of the Harvard Negotiation Project.

There are many points in Getting to Yes, but it mainly stands for going hard on the point and not soft on the people.

In addition, you should try to avoid the ad hominem logical fallacy. The ad hominem fallacy is a type of debate or argument tactic that attacks the people arguing rather than their position or points.

Another point of the book is to remember and find your Best Alternative to a Negotiated Agreement (BATNA). This is a solution you would be willing to compromise to if talks fail. Fisher and Ury also encourage coming up with creative solutions when you are at an impasse.

Oftentimes, the win-win strategy is seen as the most desirable. It puts a lot of pressure on the negotiators to make everyone happy, when it is often impossible to do so. Instead, focus on the core of why you are there and create a BATNA beforehand to ensure you don’t ‘lose-lose’.

How Do You Engage Your Biology?

An important thing to remember when negotiating is this simple fact: people like to feel good about themselves. You should strive to make the other negotiator feel good about him/herself, instead of making them feel like you are imposing yourself upon them. In fact, Washington University did a study about what type of deals end up with litigation. It turns out that deals where both parties feel they contributed the goal stand the test of time. Deals that were imposed or sped up often end poorly.

Below are four points that you can use to become more effective at negotiating and engaging with the other party.

1. Empathic Statement

An empathic statement is trying to step into someone else’s shoes and making a statement about it. You can structure a statement like , “It seems like…” or “It must be frustrating if..” These words should not be “I’m hearing it” or “I’m seeing it”. Instead, you are trying to take yourself out of the equation for the time being. Make this empathic statement all about them to make them validated and feel good.

You should also try to label whatever is making them feel a certain way. For example, if quality control is an issue, say the words ‘quality control’ itself, instead of less-specific labels. Giving them some type of reference point will allow them to see that you understand the problem or issue. 

2. Listen

The next step in negotiating effectively is to actually listen. Do not interrupt them when they first begin to talk. Interrupting people can give them the idea that you think you are more important or are going to bully them. Not interrupting them is the hardest part. Keep in mind that you will be allowed to voice your opinions later. But, allowing them to talk will give you a great idea of their initial concerns and allow them to say their peace.

Listening is an important process for many businesses. Learn more about listening in this article about Voice of Customer (VOC) by clicking here.

3. Repeat to Confirm

Following their talk, your next step is to repeat to confirm. Repeating to confirm does three things:

1. Makes sure that you got their facts correct

2. It makes them feel like you were listening

3. Allows you to pace the negotiation

It essentially gives your negotiation partner a way to correct you or clarify if you understood something wrong. You want to open it up for conversation now, before you start to get into your points. 

4. Ask / Offer Options

The fourth and final step of your negotiation is to present your ideas. This comes after you have already heard theirs. Your first priority is to give them options of what you would like to see.

Generally, having two possible options is a great place to start. Your options should be plausible and both should be objectively different. Creating two options that are essentially the same besides wording is not very productive in a negotiation. Too many options can be overwhelming however, so two is a great middle ground. Over stimulating the negotiation with too many options, no matter how creative, could overcomplicate and jeopardize the negotiation.

When you create these options, and when you speak during a negotiation in general, you should be telling the truth. You may not be able to disclose certain details because of NDAs etc, but you should never directly lie. Even ‘little white lies’ can turn into civil problems and nasty litigation.

Knowing what to say, and more importantly what NOT to say is essential in a negotiation. Intellectual Property (IP) can be confusing sometimes, but you can read more about IP and its consequences here.

Systems

These four methods can be used in any type of negotiation technique. They work to make sure the other person trusts you. In addition to the four methods above, there are three systems that you must keep in mind when negotiating. The three systems are strategy, tactics, and operations. We will go into more detail below.

Strategy

The first and most important part of the strategy system is knowledge. As stated earlier, knowledge breeds confidence. Strategy aims to create a plan. Prepping for a negotiation should take up a majority of your time, around 80% of the total time you might spend on a negotiation. Remember, a win-win ‘strategy’ is not a real strategy. 

Tactics

Tactics are things we do during a negotiation. One of the most effective strategies is coming at a negotiation from a personal point of view. This means focusing on the four steps outlined above. The number one tactic used by professional negotiators is an open ended question. This gives the other person the ability to answer honestly, and then you are able to assess whether or not you can agree.

Operations

Operations refer to external parts of the negotiation. This could range anywhere from body language, room layout, or even your own biology. Face and body language is an important part of dealing with people, but it is not the ‘end all be all’ of negotiation. Jumping to conclusions based on the way someone looks is not a great way to make solid arguments. Their arms might be crossed because they are cold, not because they are hiding something! Instead, take their body language with a grain of salt to see how they feel. 

Staging is also a critical part of a negotiation. Staging is the way in which a room is set up. For example, a board interview with the interviewee and the board on opposite sides of a table, away from the door can create anxiety and seclusion. Recognizing the type of room you are in and consciously deciding that it will not affect you is a great way to remove yourself from that anxiety. Again, knowledge is confidence. 

Takeaways

We communicate our needs to the world through a variety of ways, mainly negotiation, influence and persuasion. In general, confidence is built on knowledge. Being more knowledgeable about a subject or deal will make you more confident about speaking on and negotiating it. IF we are nervous or show anxiety, you are most likely not optimizing your performance. The key to getting over this anxiety is to transcend your own biology. You should aim to complete the four steps (emphatic statement, listen, repeat to confirm, and ask) to lower your anxiety and put yourself in control. Then you can address your systems: strategy, tactics, and operations. 

Frequently Asked Questions

Q: What if the other side is unwilling to negotiate?

A: If they take an irrational position, yet you still need to negotiate, you might need to engage a third party. Getting a mediator to step in might allow you to get through it smoothly. 

Q: How much truth is really necessary in a negotiation?

A: The facts relevant to the transaction should be disclosed. If there is something material and objective about a transaction, it should be disclosed. If it is sensorial or subjective, you often do not need to reveal that. Disclosure will save you money in the long run.

Q: How can you try to control or anticipate negotiations that are not specifically staged?

A: Sometimes you might need only one of the four steps instead of all four. For example, if someone goes rough and blurts out complaints or issues, you can respond with step one like: “It must be frustrating...” Remember, people want to feel good. 

Q: What about negotiating with your colleagues?

A: Negotiating with colleagues can be never ending, and can be hard to recognize. You might want to blurt out or become defensive, but that often does more harm than good. Staying calm and not matching their energy can often force a retreat.

This information comes from a talk with Martin Medeiros, ScienceDocs consultant, in partnership with University Lab Partners.

Mr. Medeiros focuses on providing value to clients by solving their biggest problems and helps them avoid losses. At ScienceDocs, he helps entrepreneurs and startup companies with their most high-stakes and risky negotiations and counsels clients on the science of persuasion, influence and negotiation.

If you want to learn more about business planning, check out this article from ULP about SWOT analysis here.

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Revised 11/19/2020