The art of negotiation: working toward compromise
Negotiating is a regular part of doing business with investors, suppliers, customers, employees, and others. Initially, you may see the results as a win/lose situation, however, it's possible for both parties to come away feeling like they've gained something worthwhile.
Preparation is key because it allows you to assess the parties involved and anticipate different scenarios and possible outcomes. For example, you may be looking to increase the number of deliveries per month to your retail store from one of your suppliers, but know that they are working on a very tight schedule. In anticipation of this obstacle, you could be willing to extend the receiving hours at your loading dock.
How to get the most out of a negotiation:
- Identify key issues you want to address and goals to work toward.
- Design appropriate strategies for each negotiation situation in advance.
- Know what you are hoping to get and willing to give up. Be realistic, and anticipate compromise.
- Look at the strengths and weaknesses of the other party. Anticipate their choices and decide how you might deal with them most effectively.
- Identify the advantages and risks of different scenarios; what happens to your business and to your relationship with the other party once the negotiations are over? Think long term.
- If you have complex negotiations, or a dispute that needs resolving, consider bringing in a mediator to facilitate the process.
- Keep track of decisions as you go, so you can put everything in writing once the negotiations have finished.
- Know when to step back. If you can't reach any kind of compromise, it may be time to walk away, if only temporarily.
- Understand the role emotions play, particularly when there is a perceived power imbalance between the parties. Let emotion provide motivation without taking control, otherwise it could hinder your chances of an amicable agreement.
Every negotiation is different, and there are bound to be challenges along the way. With proper preparation and experience, however, the process becomes easier.
Read more about this topic on our Negotiations page and in our blog post Nurturing negotiations — Developing supplier relationships.