Authored by Ping Ge, Supervisor, Contract Administration – MiWay Transit, City of Mississauga, and Annie Liu, Lead Estimator, Metrolinx
After participating in Harvard Business School (HBS)’s online course—Negotiation Mastery—and revisiting several acclaimed negotiation classic books, we would like to share some fundamental insights.
Negotiation is often viewed as a zero-sum game where one party’s gain comes at the expense of another. However, true negotiation is about expanding the pie for all involved, creating opportunities that benefit everyone. From persuading your children to accept your suggestions to enlisting your spouse’s support to ensure project success, negotiation is a vital skill applicable in many areas of life. While often daunting, achieving meaningful results in negotiation is possible with the right approach. So, what are the useful tools for successful negotiation, and how can we reap the best results?
Everything is Negotiable
The outcome of negotiations hinges on the skillfulness of the negotiators and some luck in achieving a satisfactory agreement. Preparation is essential.
- Identifying True Interests
Before or during a negotiation process, try to identify the interests of each party.
When the Trump administration announced 25% Tariffs on Canadian goods and the pending negotiation(s) to reduce the impact on both sides, people started asking themself “What are the true interests of Trump’s administration”? Reduce government deficits by raising tariffs? Or increase domestic job opportunities and safeguard borders to ‘Make America Great Again’, which may have other means to serve the same purpose. What are the Canadian government’s true interests? Protect local industries and businesses and ensure job stability? If both parties have the same competing interests and would not give or take or cooperate, then exploring other alternatives will become imminent. When both parties have different interests or priorities, opportunities will strike.
Take an example mentioned in the bookGetting to Yes by Roger Fisher and William Ury, two kids fighting for one orange. What does each really want? Do both kids want the whole orange? Would the kids be happy with splitting the orange? Does one kid want the fruit and the other want the peel?Each scenario will have the negotiation results totally different.
Remember to PREPARE, PREPARE, AND PREPARE as outlined in HBS course material so the right questions can be asked to disclose the underlying true interests of each party. Sometimes a negotiation part will hide its real interests to be exploited. Disclose with caution and expect retrospectively.
- Avoid Position Bargaining, Look at the Bigger Picture
If you want to encourage your five-year-old son to attend swimming lessons but he is hesitant due to fear and reluctance, consider his interests. You might negotiate that if he attends the class, he earns equal time afterward for his favorite computer games.
In our swimming example above, initially using positional bargaining may lead to less favorable outcomes (e.g., trading 45 minutes of swimming for 45 minutes of game time). Instead, illustrate the long-term benefits, such as improving swimming skills and gaining access to upgraded games upon reaching certain milestones.
- Focus on Creativity – Enlarge the Pie and Claime the Values
Getting Past No by William Ury told a story that a dying man left 17 camels to his three sons. His will was as follows: Half of the camels were to go to his eldest son, a third to his middle son and a ninth to his youngest son.
The children struggled to divide the inheritance until a wise woman added her camel, making it eighteen, so the eldest got 9 camels, the middle son got 6 camels and the youngest got 2 which totaled 17 and the wise woman got her camel back in the end as well.
It’s critical to remain calm and foster a creative approach when faced with challenging negotiations. For instance, if you want to transition to a different team within your organization but lack the required experience, express your willingness to support ongoing projects by leveraging your expertise in budget reconciliations or conducting market research which expose you to the project to learn and gain the required knowledge and experience. This approach expands the pie, so both parties may claim the benefits down the road.
Everything can be negotiated, but not necessarily all successfully. The successful results of negotiation will depend on each individual’s preferences and sometimes on the luck of who you are negotiating with. Some negotiators are maximizers (aiming to maximize value for their side, which will create a win-lose situation), while some negotiators are more collaborative. Armed with hard skills and poised with soft skills, you will have a greater chance of creating a win-win scenario.
The Importance of Soft Skills in Negotiation
While hard skills, strategies, and tactics are important, soft skills play a significant role in facilitating successful negotiations.
- Promote Positive Feelings
Everyone wants to feel good about themselves during negotiations. If your son is reluctant to attend swimming lessons due to external factors like hunger or a recent argument, consider offering a small incentive, like a chocolate bar, or showing empathy by suggesting a treat after the class.
HBS Professor Alison Wood Brooks has conducted research between two groups: Group One say, “I’m Anxious,” and Group Two say, “I’m Excited” before they head to a negotiation. People from Group Two performed well in the negotiation, while participants from Group One showed lower expectations, made modest first offers, provided quick responses, and exited the negotiation earlier.
Some negotiators are adept at using intimidating negotiation styles such as belittling your alternatives, making threats and warnings, using personal insults, and feather ruffling. Take a break if you find yourself getting flustered, and let the other party know that you won’t tolerate insults and other cheap ploys. William names the strategy “Go to the Balcony” in his book, Getting Past No, to get an emotional break.
- Engage the Other Party to Foster Ownership/Relationship
With AI and robotic technology increasingly separating customers from talking to real people in an organization, how can you overcome the difficulty of engaging staff from tech companies such as Google or Facebook to negotiate a service? One frustrated but persistent customer gained assistance by seeking help directly from employees at Tesla’s parking lot and ultimately connected with a decision-maker to resolve his issues.
- Build a “Golden Bridge” to Agreement
Negotiations with big companies like Microsoft or SAP can feel limited, often reducing buyers to a position of accepting onerous terms. However, by grouping or adding different modules/features as a package can create opportunities for negotiating better deals rather than review or renew one module at a time. Increasing the volume of business is building a “Golden Bridge” to encourage sales teams to collaborate on favorable terms and conditions.
The “Golden Bridge” will be something so good to attract the other party to conclude a deal as illustrated by William in his book Getting Past No.
Communication is the key and Collaboration is the goal
Being aware of cultural and language differences and recognizing your counterpart’s social cues may shorten the distance to reaching a deal. According to an interview with U.S. Army Colonel Leonard Lira, he helped strengthen relationships during meetings with military officials from more than 60 countries, by learning to say ‘thank you’ in each and every of the 60 different languages. This really requires some dedicated efforts.
Sometimes internal negotiations within an organization or within a team such as performance review, salary increase or promotion can be more challenging than external negotiations. Internal negotiations leave a long-term impact on relationships, which may not be the case for some external negotiations. You must be mindful and respectful of such differences, of course.
Negotiation is a joint problem-solving process. By actively engaging with the other party, understanding their true interests, and fostering an environment where everyone feels valued and empowered to be creative, both parties can expand the pie and leave nothing on the table. This collaborative effort often yields greater results than what each party could achieve individually.