Many times in life we are our own worst enemy, critic or obstacle. The same reins true in negotiation. Sometimes we start to compromise before providing the other party a chance to negotiate amongst themselves, or even more dangerous, we have a false perception of leverage which really did not exist. Unfortunately, there are many obstacles we will face as the negotiation evolves, but the following two traps are most prevalent and easy to fix.
1. They turn to their “Fallback” position prematurely
I’m not sure how aware we all are as to the dangers of human conditioning and the impact it has on the agreements we make, however, what I do know is that most professionals see negotiation merely as tactical gamesmanship. Whichever party has the most perceived “leverage and power” typically wins, and it’s as simple as that, right? If you have this mindset you are at risk to making unnecessary compromises, especially when negotiating with the 900-Pound gorilla.
These large multi-nationals have very unique and finely-tuned ways of applying pressure. They make demands for itemized costs, and attack where they see openings. Typical responses to such demands are internal discussions with your teams identifying ways to save the deal, but at what cost? In the spirit of the gamesmanship, one of the challenges with many of the teams who come to us, is that they tend to identify their walk-away point prior to engaging. This habitual process has them conditioned to turn to this number the second they receive pushback. Why is that? Mostly it’s because this is a much easier way to deal with the fear and anxiety inherent at the negotiation table.
Once you become conditioned to this behavioral habit, it becomes very difficult to reverse. Instead of seeking the “no” and being okay with the fact that the negotiation is just getting started, as humans we want to avoid conflict and seek a path which fools us in to remaining comfortable and safe. In the short-term this is the benefit to setting and using your “fallback” position as your lead negotiation tactic. In the long-term you can’t avoid the fact that your shrinking margins are threatening your ability to remain a growing concern.
2. They don’t know what they want in each engagement
We see negotiation as a series of compounding events. In each of these events decisions from both sides of the table will move your negotiation forward. Believe it or not, even a “no” provides clarity to both parties and sets the stage for the next agenda. After all, if the other side is exercising their right to veto what does that tell us? One of the following three scenarios is occurring:
- You have failed to create the emotional vision as to what can be accomplished with a “yes”
- They do not have the intellectual data or experience to support a “yes”
- They are operating on a hidden agenda or utilizing the “bluff”, while knowing you have already won their agreement
The clarity which is provided with any of these three scenarios is very helpful to our teams which is why we push hard to never accept a “maybe”. We coach our teams daily to ask for the clarity that the other party is in fact declining or rejecting. Once we have that decision, we have an understanding of what path we must follow:
- Reconvene with a session to provide additional vision and discovery with the appropriate decision makers
- Reconvene with the data and intellectual evidence they require for socialization
- Depending on the dynamics of their decision making process, who is involved (engineering team, procurement/sourcing, executive team), and who delivered the “no”, confirm we understand their position and let them negotiate internally
- Exercise our right to veto as this is sometimes the only way to flush out their hidden agenda and/or bluff
As you can imagine, options three and four are not for those who lack the stomach and fortitude to feel uncomfortable. As coaches, when we can help professionals who are conditioned to use compromise as their tactic to start being okay with feeling a little un-okay (as we like to call it), we now have a chance to make a big impact in their ability to build stronger agreements.
So when planning for each engagement, when we ask for what you want, we’re not just referring to the terms and conditions, we’re talking about the decisions you will be asking the other party to reject or embrace in each event. Rest assured, we will find a way to ask for these decisions in a very calm and effective way.
In conclusion, be ready to engage in the process. Set yourself up to manage only what you can control. Don't be afraid of "no", embrace it and drive for it. Worry about solving the challenges at hand instead of introducing new concession that may not even be necessary. Remember, if they are at the table you have something they want.