Thoughts on Negotiating

Negotiating a business deal is invariably a part of business.  It may be a small thing like hiring a painter to paint the office.  Maybe it is hiring an employee or buying a piece of equipment.  Perhaps it is a big thing like buying someone out of their business.  

In my experience, I've noticed that people have different opinions about how negotiation should be. And often times, these differences work in ways that are counter-productive to a good business deal.   I'm going to describe three types of negotiators, using analogies to help you remember them.

These first two are common, but I think they both have significant flaws.

1.  Some people think negotiations are like buying something at a flea market in Mexico. You see what is offered, ask how much, then start bickering about the price.  Various techniques may be used to bicker, but the total negotiation is about the price.  

In business, the problem with this attitude is that it doesn't cover many of the needs of you, the buyer, or any of the capabilities of the seller.  Perhaps you are having a problem with the technical performance of the product you are buying, or perhaps the product is packaged or sized inconveniently for your needs.  If the product being negotiated is a service, there are even more variables.  Considerations like this may be much more valuable than just a slightly cheaper price.

2.  Others think negotiation is like being on a debate team, where negotiation is an "argument". It is a competition to win and make the other guy lose.  These types of negotiators think it is perfectly fine to insult a company or their products, or to strong-arm their "opponent" whenever they have the advantage.

The problem with this kind of negotiator is that people ultimately don't want to do business with them.  Yes, sometimes they have to, but they don't want to.  Do you think any kind of goodwill is built with these types of negotiators?

Sadly, political leaders model this behavior almost every day.  Then the media replays it like highlights from a sporting event.  I'm afraid this poisons a lot of folks' understanding of how negotiation should work.

There is a better way:

3.  I say negotiations are more like a discussion and compromise with your spouse or significant other.  Even in the healthiest of marriages, you and your spouse may disagree on priorities and finances. It happens all the time. 

What do healthy couples do?  They communicate their own needs and acknowledge the needs of their spouse.  Then they collectively try and reach a compromise that works for both.  They do this by communicating a lot and by having a sincere desire for both parties to feel good about the compromise.  

I can tell you for a fact that the worst negotiation I've ever done is when I got everything I wanted and my wife got nothing.  That did not turn out to be a good deal at all!

Negotiating with this attitude doesn't work perfectly all the time.  Sometimes one party will get their way a little more than the other.  Then with another issue, it may balance out the other way.  The important thing is that both parties feel that the big picture is good for both.  It is a building of mutual goodwill.

One final thought:  It take two to tango.  If the person across the table from you is a die-hard type 1 or 2 negotiator, there may be nothing you can do.  At least knowing what kind of negotiator they are might help you keep a level head.