We tend to associate “negotiating” with lawyers, politicians, and purchasing agents. But the fact is, we all negotiate. We negotiate compensation packages for new employees, we negotiate price and terms with our customers, we negotiate bedtimes with our kids, and household budgets with our spouses. So we all negotiate all sorts of stuff . . . at least, we try . . . but not always well or successfully.
Jack Kaine is an expert on the art of negotiation. He has taught at Texas A&M, the University of Kansas, and at Stanford. He teaches negotiating skills to thousands of people each year in lectures and workshops. He is the president of his own management consulting firm, J.W. Kaine, Ltd. The material below is taken from Jack Kaine’s presentation, “Negotiating for Success.” I can’t convey all the tips and concepts he discusses in that presentation, so I have selected the broad themes that I found most impactful. If you think your negotiating skills need some improvement and would like to learn some of Jack Kaine’s tips for negotiating successfully, please read on.
“Negotiations are built on agreement, not disagreement.” – Jack Kaine
First, negotiating is not a competitive event. It’s not a zero sum game where one can win only if the other loses. A big ego does not serve well here. It can turn negotiators into combatants, and cause a completely satisfactory agreement to be lost in the search for a perfect agreement. A good negotiator understands that there has to be a win/win solution or the negotiation will fail and everybody loses.
“The only reason you are negotiating is out of ignorance,” says Kaine. “If a fair and impartial decision were known to all parties prior to the negotiation, it would eliminate the need to negotiate.” Taken from that perspective, a negotiation is a fact-finding mission aimed at uncovering what the other side is trying to accomplish. To do that, a skilled negotiator not only needs to ask smart, insightful questions, but also needs to listen intently to the answers.
It’s important to understand what the other side is trying to do without getting hung up on how they’re trying to do it. The “how” question is where the negotiating comes in. If you clearly understand where they are trying to go, you can offer alternative ways for them to get there . . . ways that work for both of you. For instance, let’s say you’re a supplier to a manufacturing company and they’re trying to get you to lower your price by 10%. But through your clever questioning, you know their broader goal is to lower their manufacturing cost. Beating you up over your price is simply the tactic they’re using to do that. So you counter their demand for a reduced price by saying, “What if we can prove to you that by using our product, your equipment will be able to run faster, with less waste, and save you 15%?” The trick is to keep everyone flexible and avoid letting anyone take a hard position.
In your questioning, Kaine advises asking “what” questions rather than “why” questions. A “what” question feels like a neutral request for information. A “why” question feels more like a challenge and may evoke an emotional response. Asking “Why did you do that?” may make the other party feel they need to defend an action rather than explain it.
Don’t negotiate against yourself. That is, don’t lower your price or ease your terms before the negotiation even begins. When the negotiation does start, you won’t get any credit for concessions the other side never knew you made. And when you do make a concession, make sure you get something in return. For example, if the other party is asking for a price 5% below what you’ve proposed, you might say, “Yes, I can do that for you if you can accept delivery in fifteen days instead of ten.” If you don’t do that, the other party will think you were trying to gouge them for an extra 5%, and whatever relationship you may have developed will be damaged.
The over-riding concept here is that a successful negotiation is built on trust. It’s a partnership whereby both parties have a vested interest in a successful outcome. As long as each “partner” fully understands the goals of the other, and as long as each is committed to working honestly together to achieve those goals, a successful outcome will be within your reach.
Rock Solid Business Development
Phone: (847) 665-9134
andy@rocksolidbizdevelopment.com
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