For many professionals, negotiation can be a neglected area of professional development. Dr. Janet Fitzell takes you through the basics …
Whatever your profession, you probably have a working life that presents a wide range of situations involving negotiation. If you’re already an expert negotiator you know the skill and finesse necessary to get the best outcomes. But for many professionals, negotiation can be a neglected area of professional development.
Negotiation is rarely just about winning or creating ‘win-win’ outcomes. It often requires a capacity for working through complex scenarios, dealing with conflicting values, compromising on your ideal outcome and all the time being careful to maintain good working relationships. And poor outcomes from badly handled negotiations can be painful and costly.
When you are making the move into management it’s vitally important to see the broad relevance of negotiation and the business value of sound negotiation skills. You need to have well-developed negotiation skills and to understand their application in your particular work setting.
Negotiation: an all-purpose definition
For workplace purposes a useful definition of negotiation is:
A give and take process involving two or more parties seeking to reach an agreement that settles a work related matter of concern or resolves a conflict.
This all-purpose definition captures the essence of what negotiation is and its purpose regardless of the magnitude or relative triviality of the matter of concern. It covers a broad spectrum of situations.
At one end of the spectrum an easy compromise might be possible because the needs and expectations of the parties involved are only slightly at variance and there is plenty of give and take. On the other hand a complex issue associated with strongly held disparate views and entrenched attitudes can leave people despairing of ever reaching a satisfactory conclusion.
The business value of effective negotiation
When a successful negotiation produces a quantitative outcome as is the case with success in a sales campaign or an acquisition the business value is easy to see. But the value of effective negotiations goes beyond directly measureable outcomes. Negotiation that resolves interpersonal conflict or results in process improvements or transforms a discontented customer into a satisfied client also adds significant business value especially when you consider the long-term effects.
For example by negotiating more flexible working arrangements with his workers a business owner lifted morale dramatically saw absenteeism decrease and productivity benefits ensued. In another example a manufacturing manager took the lead in negotiating changes to the ways in which the company’s sales department reported their forecasts each month. Smoother production flow ensued which pleased manufacturing operatives and customer satisfaction improvements were rewarding for sales people. And by negotiating a compromise on terms of trade a provider of business software solutions supported a client organisation through a difficult time financially and ended up with a strong advocate for their products and services in the long run.
Often effective negotiation produces qualitative improvements which only show up on the bottom line some time later. The business value of effective negotiation is best measured via a combination of qualitative and quantitative measures.
Stages of negotiation
As with any process and associated skill set that you learn step by step and practice extensively before it ‘comes naturally’ negotiation can appear easy when you observe or hear about an expert negotiator. When you are a less adept negotiator it’s useful to be aware of the broad stages of negotiation and to keep them in mind to ensure that you don’t miss an important step. For most work situations these stages are:
1. Being clear about the context
When disagreements and conflict occur at work it’s easy to lose sight of the big picture and become swamped by relatively trivial detail and personal preferences. A good starting point for entering a negotiation is to be clear on why resolving this particular matter is important for the organisation. For example negotiating the detail of an employee’s working hours when the organisation has a policy on flexibility is much easier when you are clear about why flexibility is offered and how the organisation benefits. The employee’s needs are an important consideration but should not prevail over what is good for the workforce as a whole and the organisation.
Your preparation should be appropriate to the situation and depend on the scale of the issue. It is beneficial to consider each of the following:
- Your aim(s). What do you want to achieve from the negotiation?
- The facts. What facts are relevant to this negotiation? Make sure you check that all the information you regard as fact is just that and not unchecked assumptions.
- Areas of flexibility. What aspects of the issue are you willing to move on? Are there any ‘non-negotiables’ from your perspective?
- Relationships. What relationships are significant to this matter? Make sure you consider both direct and indirect relationships. For example when you are negotiating with one staff member others will likely hear about your discussions and your relationship with them could be indirectly affected.
- History. Is there history associated with this issue that could have a bearing on the current negotiation? For example a client who has been dissatisfied with your firm’s service in the past might already be adversely influenced by impressions left over from earlier experiences.
- Consequences. What are the likely impacts for you of a successful outcome from this negotiation? And for the other party/parties? What are the risks if the negotiation does not culminate in agreement?
- Attitude. Be clear on your own attitude as you enter this negotiation. Do you have an open mind? Is your view coloured by previous good or bad experience? How you feel about the prospect of negotiating in this situation?
3. Engagement and dialogue
In most workplace situations negotiation is not about winning at all costs. Whether internal or involving external parties good working relations are hard won and easily lost when negotiations are handled badly. The following rules of thumb help keep discussions on track:
- Think dialogue not debate. You are more likely to reach a satisfactory agreement when you pay equal attention to listening and talking making sure that you acknowledge others’ points as well as making your own.
- Maintain respect. No matter how strongly your views are in opposition to the other party’s your respect for their right to differ should not waver.
- Consider any power difference. Be mindful of unequal power in negotiations – for example when you are the manager negotiating with somebody who reports to you. And remember that if you have no intention of shifting your position you are not involved in a negotiation.
- Explain your position. For optimal outcomes it’s not enough to just state your position. Make sure you have thought it through sufficiently to be able to justify it clearly to the other party. Be willing to answer questions about your position patiently. You’ve likely had plenty of time to think about your position; the other party has not. Give them space to catch up!
- Seek understanding. To have the best chance of reaching agreement which might involve exploring alternatives you need to fully understand where the other party is coming from. Open questioning and careful listening in order to fully understand their perspective are essential.
- Allow enough time. Complex negotiations can involved a protracted period of discussions occurring in a series of meetings. Even a relatively trivial matter can require ‘time-out’ after a first discussion in order for the parties to gather their thoughts and prepare to extend the conversation.
- Be constructive. However tricky negotiations tend to progress when those involved make constructive moves like identifying common ground acknowledging others’ points and offering compromise and alternatives where possible.
- Document progress. When negotiations extend over a series of meetings it’s helpful to document progress – what has been agreed to date points for further discussion and any interim actions.
4. Agreement and action
When you’ve reached agreement it’s usually helpful to document what has been agreed and provide a copy to all parties involved. Include sufficient detail so it’s clear who is doing what and by when. It’s wise also to check that the parties agree on what is documented. Don’t just assume that they agree because you sent them an email setting out your recollection of what was agreed.
When you’re keen to improve your approach to negotiation it might be that you are relatively strong in some of the skills of negotiation and that your best return from professional development in this area can be achieved by focusing on your weaker areas. The following self-assessment questions will help you identify particular areas for improvement:
1. Verbal communication. How easy do you find it to explain your case clearly and succinctly to others so that they really listen?
2. Active listening. How capable are you of paying careful attention to somebody else as they explain their position contributing only questions to help your understanding and avoiding interrupting them just to put your case. Have you mastered the art of the ‘probing question’ that gives pause for thought?
3. Assertiveness. Are you clear about how to assert your position without coming across as aggressive? Do you have techniques for responding to aggression at work?
4. Creative problem solving. Can you think creatively and dynamically using information and new learning from a current conversation as input? Or do you always need to ‘go away and think about it’ when a new idea is put to you?
5. Decision-making. Do you use a process for decision-making that ensures you make well-informed decisions?
6. Self-management. Do you have good self awareness – an ability to pay attention to your emotional state and manage your responses so that they don’t get in the way of a successful negotiation?
7. Influence. Do you have a good handle on how to influence others whilst also maintaining good working relations.
Preparing to negotiate
Next time you have an opportunity to negotiate before you whatever the issue try working through this checklist to help you prepare:
1. Who are the parties involved? Be sure to consider whether there are any hidden influencers such as the other person’s manager.
2. What do you want to achieve from this negotiation?
3. What’s the business value of your goal in this negotiation?
4. Are there alternative outcomes that would be satisfactory to you?
5. What is the rationale behind your current position?
6. What are you prepared to give away in order to reach agreement?
7. Are there compromises you are prepared to make?
8. What is the value of your current relationship with the other party/parties?
9. What are the consequences if the negotiation is unsuccessful?
And at any time during a negotiation it can be helpful to ask yourself:
1. What is/are the other party’s/parties perspective on the issue?
2. What is their rationale for that position?
3. What am I being asked to give up in this negotiation?
4. Why am I spending time on this negotiation?
5. How do I feel about the proposed solution?
6. Is this negotiation currently building good relations or causing harm?
7. If there is potential for harm what are the business implications – short-term? And longer-term?
About the Author
Dr Janet Fitzell is an independent organisational consultant and facilitator specialising in organisational development and team dynamics through her company FourLeaf Consulting Pty Ltd (http://www.fourleaf.com.au/). She facilitates strategic planning and team development undertakes organisational reviews coaches individuals and teams and generally helps organisations to build sustainable futures.