Negotiation touches every part of our lives. Relationships in business and in our personal lives are negotiated. And the skills to do it effectively can often mean the difference between getting what you want or losing out. You don’t get what you deserve, you get what you negotiate!
In the first section of the book, How to be a Great Negotiator, written by property economist, investor and developer Neville Berkowitz, the characteristic traits of a great negotiator are explored in short, bite-sized nuggets of advice.
Over the next few months, we will bring you the traits needed to succeed at the art of negotiating.
(Courtesy of PersonalEmpowerment.co)
108 Solution-focused negotiation
Most negotiations start off with a competitive or combative approach, with both parties working to achieve a win/lose outcome in their favour. But non-adversarial parties can agree to set aside conventional negotiation tactics and negotiate on a different basis. They can choose to compromise in order to achieve a win/win outcome. This is called a solution-focused negotiation.
The solution-focused approach requires both parties to commit in advance to an agreed upon default position, with the proviso that if the solution-focused approach yields a better outcome for both parties, the default position will be adjusted to accommodate the improved outcome. This now becomes the agreed-upon terms and conditions. In this instance a default position means a position which both parties accept will be the minimum terms of the deal they can both live with and thus agree to.
It is imperative that the initial default agreement is in place first, so that neither party can later take unfair advantage of the others’ vulnerability as they let their guard down in order to seek a non-competitive, mutually improved outcome.
A solution-focused approach is generally a lateral-thinking approach, or “out-of-the box” thinking approach, that increases the size of the pie (or the size of the deal) and the two halves of the pie to be split between parties. For example, certain creative forms of financing may require the asset to be held in trust for a period of time, to enable the financing options to be finessed and improved. Another example is the redeployment of a talented but difficult staff member to head up a newly created department on a “sink-or-swim” basis, in order to avoid further difficulties such as continued office tensions, adverse publicity, or legal proceedings.
If it seems promising, a confident negotiator can suggest that a solution-focused approach be adopted at any point in a negotiation.
A win/win solution can be achieved without the need for painful compromise by either party. It takes a confident and experienced negotiator to shift a conventional competitive negotiation into a solution-focused approach.
An approach could be as follows: “Do you agree that we will provide the service to you at the acceptable market price?” If the answer is yes then commit that in writing as the deal. Your next step is something like: “I’ve just thought of another way to make this deal work where we can deliver the service to you at no cost providing you create a joint venture with us whereby we charge the market/users of the product or service you are supplying cost plus X%, which is still acceptable pricing in the marketplace. You get the service from us at a lower price but then we jointly control the market and its pricing policies for mutual benefit.”
They have got a better deal and you have got joint control of the market so you can sell your service to an even wider marketplace. You have now taken what could have been an adversorial negotiation across the spectrum to a mutual partnership servicing a much bigger marketplace with the strength of the other party behind you now – all for the price/cost to you of negating your profit from the initial deal.