Often times people interpret a “negotiation strategy” as the small potatoes tips or tricks to use at the actual negotiation table. But that understanding misses the mark. Tips and tricks are only a small ingredient within a comprehensive negotiation strategy. In order to understand a strategy, it is necessary to take a larger view of the entire issue. For example, an often missed first question of a negotiation is: Should we negotiate this at all? As a professional negotiator, it may surprise some to learn that there are times when we advise that the best negotiation could actually be no negotiation, as long as no negotiation serves the interests defined by a comprehensive negotiation strategy. But before we can build that negotiation strategy, we need to understand the importance of defining our ultimate interests.
By way of a simple example, let’s assume we need a babysitter for an upcoming date night. Most people can agree that both babysitters and saving money are a wonderful thing. However, securing a babysitter under the sole focus of saving money can lead to a not so wonderful outcome. Understanding your ultimate interests highlights how no negotiation may actually be the best negotiation strategy with the babysitter. As a father of three, when the opportunity for a night on the town arises, I can attest to my ultimate interests being: (1) enjoying time with my wife without the children, and (2) being able to enjoy the night even more by knowing my children are safe and well looked after. Of course, saving money is one of a number of interests at play—and almost always is—but it is not an ultimate interest of mine for a successful date night. Having clearly defined my interests helps me avoid focusing on cost (a non-ultimate interest) as a default. Cost is one of the most common defaults people will focus on without a clear negotiation strategy because it is the easiest to measure. If I fell into the default cost negotiation trap and tried to squeeze the babysitter for a few bucks, it would not serve my interests. More likely, a hardline cost-focused negotiation only increases the odds of the babysitter cancelling last minute (date night ruined), increases the likelihood of the scorned babysitter making the children miserable (date night ruined), or maybe the sitter decides they are “unavailable” for the next date night (no more date nights). All of these outcomes are contrary to my ultimate interests.
Without a clear understanding of your interests, your negotiation strategy is constrained to stumbling through the dark blindfolded.
But what if cost did need to be an ultimate interest in choosing a babysitter? The negotiation strategy still guides the decision because I have defined my interests. My interests of a happy date night and happy children do not disappear, they still need to be met. Therefore, the strategy informs that maybe the date night schedule itself becomes the target for cost savings, rather than the babysitter. Now instead of dinner and wine, maybe date night turns into appetizers and a walk. Saving costs on the date itself, rather than bullying the babysitter to accept a lower wage, better furthers my interests. I still had a babysitter, still had a good date night, and was still cost-conscious; all of my ultimate interests were met. Understanding how interests impact a strategy will help guide decisions to meet your goals.
Although the above is overly simplistic, the main takeaway is worth remembering. Without a clear understanding of your interests, your negotiation strategy is constrained to stumbling through the dark blindfolded. As a more practical example, if a new supplier comes to you with a small raw material cost increase, and explains that they are simply passing along the increase without a markup, should you negotiate this increase? Without understanding your interests, and how they fit into a negotiation strategy, you are left guessing at what to do, and often only push back because of the cost-default reaction. It very well could be that because of your ultimate interests, the strategy for this particular cost increase is simply to accept the increase and move on. This is not always a popular position for clients, but sometimes it is a necessary one. Maybe when the next cost increase comes the strategy points to pushing back against the increase (while of course reminding the supplier how you graciously accepted the last increase). But again, only with a complete negotiation strategy can you make informed decisions, and only by understanding your interests can you build that strategy.
So at Conlego when we talk about creating a negotiation strategy, we are not talking about tips or tricks to use when at the negotiating table (although we have those too), we are talking about the start of a process that includes identifying a client’s interests as one of the building blocks required to create a negotiation strategy. Only then can a negotiation strategy guide decisions to effectively serve your interests.