Company Doctor: Bargaining Power

Last updated on May 13th, 2019 at 02:34 pm

It is not unusual for a client or student to ask me, "Who is the best negotiator you know?" "How do they negotiate?"

This article summarizes the perceptions of both my students and clients of what constitutes a successful negotiator. The information was collected from pre-seminar and pre-course questionnaires that were completed by more than 500 participants. I have taught negotiations at Keller Graduate School of Management for more than 10 years and have facilitated numerous seminars in negotiation skill development, communications and conflict resolution.

A successful negotiator is:

1. An effective communicator, both written and verbal.

Communication is a major component of the negotiation process. It can be written, verbal and non-verbal. An effective communicator will get their point across in an efficient manner. Their communications are focused and factual. They also tend to persuade their opponent through their use of information power.

2. A good listener, an active listener.

It is imperative to be an effective listener. Unless you clearly understand what the other person’s needs are, you will not be able to respond to those needs. Being an active listener means that you validate the other’s interests by restating them in your own words. For example, "Are you saying that you can reduce the price if we provide you with an annual commitment?"

3. Confident in their ability to negotiate effectively.

Confidence is a common trait demonstrated by effective negotiators. They are confident in their ability to bring a negotiation to a successful conclusion. They are also confident that they can achieve their negotiation goals and assist the other party in obtaining their goals as well, thus producing a win/win agreement. Effective negotiators do not let confidence become arrogance.

4. Knowledgeable of the interests and needs of their negotiating partner.

The successful negotiator invests the time necessary to do research on their negotiating partner, and the problem or opportunity that is the basis of the negotiation. They also provide a comfortable environment in which their negotiating partner freely shares information.

5. Cooperative with all involved in the negotiation process.

Providing an atmosphere that promotes cooperation is critical to the success of any negotiation. A win-win environment also promotes a sense of cooperation among the parties involved in the process. In many cases, selecting a neutral location will provide a non-threatening environment and increase the potential of success.

6. Open minded to creative options and solutions.

The successful negotiator is a creative negotiator. He or she finds innovative ways to solve the problems that are identified during the negotiation process. They look for ways to generate solutions that draw from the ideas of both parties. They draw upon the experiences of all parties involved in order to reach an optimum agreement.

7. Trustworthy and honest in their dealings.

Building trust in the process and in its participants is key to the success of any negotiation. Unless both sides trust each other, they will not share information, nor believe that the agreement will be implemented as negotiated. Trust can be built during a negotiation by recognizing the legitimacy of the other person’s proposals. The use of concessions and compromise can also build trust.

8. Patient with the individuals involved in the negotiation process.

It takes time to negotiate an agreement that will survive over a period of time. You cannot rush to an agreement that will be effective and acceptable to both parties. A successful negotiator does not use time as a weapon, but as a motivator to keep the process moving in a positive direction.

9. Intelligent, and thinks at a high level.

The successful negotiator brings a great deal of information and experience to the negotiation process. He or she will challenge the other side to develop an optimum solution to the problem.

10. Understanding of the problem and the emotions involved in the negotiation.

The successful negotiator has a clear understanding of the underlying issues that need to be addressed during the negotiations. They are also aware of the emotions that will surface during the process itself and are prepared to deal with those emotions in a constructive manner.

Now it is time to take inventory of your own skill set. How many of these attributes have you incorporated into your negotiation approach? If you have nine or more of these attributes you are an excellent negotiator, if you have eight, you are a very good negotiator. If you have seven, you are a good negotiator. If your possess six or less, you need to work on your skill development.

Each situation poses a unique challenge for the negotiator. Many times you are negotiating with an individual and their organization for the first time. There is no relationship on which to build. Other times, the relationship is well established and the individual negotiators come and go. A different type of legitimate power can be applied to each negotiation. Most negotiators use information power. The negotiator who has assembled the greatest amount of information will be able to gain an advantage in the negotiation.

One attribute that was not isolated by the participants was the level of preparation. Both William Ury and Daniel Ertel have written extensively about the importance of planning and preparation. They agree that there is a direct correlation between the time spent on preparation and the success of a negotiation.

The degree of preparation greatly influences your level of confidence, your approach, and your demeanor. A quiet confidence is a direct result of a number of components.

First, you will measure potential agreements, strategies and options against standards that you have developed.

Second, you need to develop your BATNA, the Best Alternative To a Negotiated Agreement. Your BATNA provides you with an option if an agreement is not reached.

Third, you must develop your WATNA, the worst alternative to a negotiated agreement. The WATNA helps you identify that line in the sand you don’t want to cross.

Fourth, you need to determine your ZOPA, the Zone of Potential Agreement to prevent you from agreeing to a proposal that falls outside of the zone agreed upon with your constituencies. Finally, prior to any negotiation it is recommended that the negotiator meet with their boss and their peers, to gain support for their strategies, options and potential agreements.

Once all four steps are completed, you are ready to start your negotiation.

Cary Silverstein, MBA, is the president and CEO of Fox Point-based Strategic Management Associates LLC. He can be reached at (414) 352-5140.

August 19, 2005, Small Business Times, Milwaukee, WI

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display