4 Steps to Planning a Successful Negotiation
Feb 06, 2023
From American Management Association
Too often, negotiation has a negative connotation as something stressful or manipulative. As a result, many people go into a business negotiation—whether with a supplier or vendor, a potential client, or their boss—dreading the prospect of either having to play hardball and risk alienating their counterpart or come across as weak and end up giving up more and getting less than they want. Of course, give-and-take is an inherent part of the process. Yet, negotiation is essentially about solving a problem, starting with a clear understanding of your own motivations and those of the other party, and includes collaboration as well as assertiveness.
As part of its professional development mission, American Management Association (AMA) emphasizes negotiation as a vital skill for gaining influence and improving outcomes in a variety of business and career situations. From the experts at AMA, here are four steps, plus proven strategies and helpful tips, to planning a successful negotiation that adds value for both parties:
Step 1: Identify the Objective. If you are not clear about the objectives of both parties and about the issues of key stakeholders, reaching agreement in a negotiation can be difficult. To further complicate matters and threaten a successful outcome, unexpected issues and heated emotions can emerge.
- Determine why you are actually conducting this negotiation—and the answer should not be simply “to get the deal.” How does this negotiation factor into the organization? What makes it important? What is the gap between what you currently have and your goal?
- Uncover and discuss the underlying issues and/or interests hidden behind the facts. Is this a single-issue negotiation or are there multiple issues? If there is an existing relationship between the parties, how might that help or hinder the negotiation?
- Identify all the stakeholders, which include anyone who will be part of the decision-making or who will be affected by the outcome. Is there a history to consider? Within your organization, who do you need to educate about the negotiation?
- Understand and anticipate any resistance that may come up during the negotiation—and not only from your counterpart. What can you do to neutralize that resistance?
Step 2: Identify the situation. The more you know about each party’s underlying issues, the better the negotiation. If you or your organization has prior history with the counterpart, start by analyzing how the previous interactions will help with the forthcoming negotiation.
- Factors like organizational culture, personal likes and dislikes, previous negotiation tactics, and authority level can provide good insight into your counterpart. Before the negotiation, ask the right questions to gather information and open the door to creativity in developing a solution.
- To assess your power and leverage it in a negotiation, establish your BATNA: Best Alternative to a Negotiated Agreement. The more or better alternatives you have, the stronger your position.
Step 3: Generate alternative solutions. Once you and the other party have a shared understanding of the issues and the interests behind the objections and rejections, you are ready to begin problem-solving. Do not rush to finalize a solution—take time to discuss all options. The more ideas generated, the more opportunities to meet the interests of both parties and all stakeholders involved.
- Be careful to avoid demands and ultimatums. These only make the other party defensive.
- Know what your trade-offs will be.
- Maintain a positive, flexible, “win-win” attitude.
- Demonstrate patience.
- Be creative.
Step 4: Reach an agreement. Again, take the time and thought you need to ensure that you are not rushed into an agreement, because you may encounter difficulties later on.
- As a skilled negotiator, ask yourself: Does this agreement meet the interests of both parties? Does this agreement maintain or strengthen the relationship for future negotiations?
- Prepare ahead for resistance. What are some potential barriers to the agreement? How can we overcome them?
With careful planning, clear communication, and a priority on mutual problem-solving, negotiation does not have to be stressful. Still, even in the best-planned negotiations, deadlocks sometimes happen. Here are some trusted tips for breaking a deadlock:
- Postpone some difficult parts of the agreement.
- Suggest changes in specifications or terms.
- Find a more informal meeting place.
- Tell a funny story to ease tension.
- Take a break for the day.
American Management Association (AMA) is globally recognized as a leader in professional development. For 100 years, it has helped millions of people bring about positive change in their performance in order to improve results. AMA’s learn-by-doing instructor-led methods, extensive content and flexible learning formats are proven effective—and constantly evolve to meet the changing needs of individuals and organizations. To learn more, visit www.amanet.org.