MT Expert: Legal - How to negotiate

Brits are not renowned internationally for their negotiating skills, says corporate deal-maker Clive Rich. But there are a few clever tricks that can help every businessperson beef up their arbitration skills.

by Clive Rich
Last Updated: 09 Oct 2013

Negotiation has never been more important in our lives. We live in a collaborative, interdependent and fragile world where everyone needs to make deals in order to get on. This new 'Deal Economy' affects everybody: entrepreneurs, sole traders, SME’s, big corporations, institutions and governments.

Yet, in this country, negotiation skills are rarely taught or practised or even thought about. Perhaps it’s a hangover from our Empire Days when our diplomatic charm was backed up by real economic and military bargaining power. Those days are over and if all we have left is our national sense of politeness and decorum then that is not going to be enough to make deals happen. 

Here are a few top tips that we could all benefit from using:

If you are going to negotiate take the time to prepare

Most people rush at negotiation because they are trying to fit it in between emails and meetings. But if you skip preparation the negotiation will unravel later. Here are 10 questions you must ask yourself at the outset.

  1. Who is on the other side?
  2. What is our history of dealing with them?
  3. What do we know about them as individuals?
  4. Who do we need on our side?
  5. What role will everyone play?
  6. What’s our bottom line?
  7. What concessions can either side afford to give away?
  8. In what climate do we want the negotiation to take place?
  9. Who holds the bargaining power?
  10. What will we do if we can’t get a deal done?

You can’t make all this up as you go along – there isn’t time in the heat of the haggle.

The best way to get more of what you want is to focus on the other side

What do they really need out of this? What will getting a deal done mean for them? Will it make them feel they have achieved something? Will it give them reassurance? Will it make them feel respected? These emotional dynamics are much more important in deal-making than surface issues about price, delivery date or quantities. We Brits are traditionally very squeamish about this kind of 'touchey-feeley' stuff –but once you understand the emotional dynamics of the agreement you can find ways of satisfying these underlying needs and get back what you need in return. These kind of emotional payments are normally much more important than cash payments at the end of the day. They represent the real currency that gets deals done.

Ask for what you want

It’s amazing how many people negotiate with themselves before they even start. This is a particularly British characteristic – that politeness thing just keeps getting in the way, so people have an internal dialogue running which goes; 'I want £10,000, but if I ask for £10,000 the other side will be cross with me – I’d better ask for only £5,000 and see what happens'.

If you want £10,000, ask for £10,000! At the particular moment when you make your bid it doesn’t matter whether the other side likes you. If you have handled the previous parts of the process correctly the relationship will withstand you asking for what you want.

Stand up to tough guys

We all come across individuals who try to push us around. These people believe that if they exert pressure on you they will get what they want at your expense. This approach to negotiation is old fashioned and normally counter-productive in the end as it stokes up resistance and/or a desire for revenge. So, nip it in the bud. Don’t do that British thing of serenely putting up with bad behaviour as though it wasn’t going on. That just encourages the other side to keep doing it.

If someone is threatening you, say 'We negotiate using reason, not threats - shall we start again?' Too pushy for your taste? Try 'Just imagine how fast we could get this deal done if neither of us threatened the other…' However you say it, just raising the issue will normally shut them up, irrespective of how big and intimidating they may seem.

Clive Rich is one of the UK’s leading corporate deal makers and trouble shooters



Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today