effective negotiation skills

One Sided Deals
The spirit of the deal can be as important as the terms of the contract, even a tightly worded contract can be sabotaged by either party backing out of the agreement, or by acting in bad faith. Capable negotiators understand that the stability of the outcome is important and focus on more than simply maximizing the concessions that can be extracted from the other side. This is down to effective negotiation skills; they know that if either side subsequently has reason to regret or resent the agreement reached, then they may seek to undermine it, or even reject it outright. Think about the following scenarios.

Consider a situation where management secure an agreement with workforce representatives on new working practices, but the workforce themselves believe that they have been coerced into acceptance. The workforce might then employ disruptive tactics, for example by refusing to undertake any tasks that are outside their formal job description. The result of this kind of action is often highly disruptive, even though it breaks no agreements or contracts.

In situations where sales representatives secure deals that are very one-sided the buyer may, on reflection, decide that he wishes to back out of it. In the business world it would prove very expensive and time consuming for the seller to seek recourse through the legal system. Furthermore such action would alienate a potentially valuable customer and could result in a lot of negative publicity.

Where the public are involved, and as consumers commit to purchase high value goods and services, they are usually protected by a legally specified cooling-off period. During this period they can back-out of the deal without incurring a penalty. Here the law recognizes that trained sales staff are usually much better deal makers than members of the public.

The Win/Win or Integrative Approach
There are two types of negotiation process that differ fundamentally in their approach and in the relative prospects for the stability of the agreement that is reached. The first is called the integrative or win/win approach. In these negotiations the prospects for both side’s gains are encouraging. Both sides attempt to reconcile their positions so that the end result is an agreement under which both will benefit - therefore the resultant agreement tends to be stable. Win/win negotiations are characterized by open and empathetic communications and are commonly referred to as partnership agreements.

The Win/Lose or Distributive Approach
The second is called the distributive or win/lose approach. In these negotiations each of the parties seeks maximum gains and therefore usually seeks to impose maximum losses on the other side. This approach often produces agreements which are inherently unstable, as represented by the triangle balance on its apex.

The Mixed Approach
In real life negotiations both of these processes tend to be at work together. Therefore, rather than two negotiators adopting one or other of the approaches, negotiations tend to involve a tension between the two. It should be apparent that where a long term business relationship is involved that it is important to adopt a more integrative (win/win) approach to negotiations. The failure to work together with the other side in order to reach a mutually acceptable outcome is a common reason for the breakdown in many otherwise successful business relationships.

Stability of the Outcome
Remember, the spirit of the deal can be as important as the terms of the contract and when seeking to expedite negotiations that will deliver a deal that suits the needs of both sides, you should:
1.   Focus initially on each side’s primary objective - ancillary negotiating points can become a distraction in the early stages.
2.   Be prepared to settle for what is fair - if an agreement is not seen to be equitable it is unlikely to be stable. Maintain flexibility in your own demands and interests, this makes it easier for the other side to be flexible as well.
3.   Listen to what the other side wants and make efforts to meet their requests. You may need to compromise on the main issues, so that both sides can begin to attain their goals.
4.   Seek to trade-off concessions - so that each side gets something in return for everything they give up.

Capable negotiators understand that the stability of the outcome is important and focus on more than simply maximizing the concessions that can be extracted from the other side.

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