There is one central idea, one key concept that is very important to comprehend.
If you have this right, you will be rewarded with profitable, enjoyable and long term business relationships in which price is not the only element. If you fail to get this right, you will struggle with sub optimal business relationships and you will most likely end up haggling about price in almost all of your negotiations.
The one thing that matters most is understanding the interests of the other side in your negotiations; this is an important element taught in negotiation training.
Generally we have a good understanding of our own objectives, needs and desires. When we negotiate with others, we typically begin with attempting to convince them of our opinion. We think to ourselves that because it makes sense to us, surely it must make sense to everyone else. The problem with this stance is that it completely disregards the objectives, needs and desires of our counterparts.
What will it achieve trying to persuade another person to do something that they don't believe would be in line with their objectives, beliefs and wishes?
You will not under any circumstances convince someone to agree with you by disagreeing with them, quite the opposite will happen. Because you tell someone that they are wrong and you are the one that is correct, you will force them to defend their position rather than agreeing with you. Nobody likes to be wrong and if you tell someone that they are wrong it will become very important for them to defend their stance because their personal credibility is on the line.
Not often will you achieve agreement with anyone after you have told them that they are incorrect, you have also managed to paint yourself into a corner. If it was important for you to reach agreement and you loose the argument, then you will have to compromise your own credibility by departing from your 'correct' stance to adopt the argument of your counterpart.
If you want to reach agreement the easy way rather than have your negotiations escalate into a positional argument, here's my suggestion:
Start by asking some questions, the best of which you can ask will be questions designed to show the interests behind the positions that the other side have assumed in the negotiation. Open questions are the best kind of questions to reveal the interest or motivators that support your counterpart's positions.
A good question to can use and at the same time endorsing your negotiation skills: Why are you negotiating with me / my organisation?
This is very probably the best question to ask at the beginning of a negotiation. Follow this question by asking your counterpart to expand on and to prioritise the reasons offered in response to your questions. This will give you a prioritised list of their key interests.
Sample Interests:
- Individual: Security, Recognition and Control
- Organisation: Profit, Risk Avoidance and Strategic Fit (Some important factors you would have learned in purchasing training)
Once you have an awareness of your counterparts' key interests it is a good idea to share your own interests. Once all the parties to the negotiation have disclosed their interests it will be much easier to recognise the areas of common ground and then it is useful to present your case in the context of how it would serve their interests. This way, you will not have to convince your counterpart that your argument is correct; you will only have to show that your suggested course of action would meet their interests.
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