Negotiate Wisely: Stop the Revenue Leakage Due to Unprincipled Concessions

Over the decades as the K&R team have assisted leading companies achieve business and sales negotiation success, the subject of ”unprincipled concessions” has been a constant. Simply put, unprincipled concessions are those that are not tied to a credible business rationale. Research shows that this simple business negotiation mistake can (and has) cost companies between nine and eighteen percent of their dealmaking revenues.

The below graphic illustrates why unprincipled negotiations are such an important issue. Let’s discuss the problem and what you and your team can do to make this a non-factor in your negotiations.

Negotiation Concessions Infographic

Read more

negotiations agenda management

Agenda Management Can Be Your Difference Maker (or Game Changer) in Negotiations

In one of my previous articles, I wrote about the “time factor” — not only how you can manage it against other considerations but also how to use the high-level (or macro) agenda to help create agreements that have a significant impact on your success. You can read that article and case study here.

The perspectives espoused in that article are even more true today, despite events of the intervening six years. It seems that there are plenty of voices promoting the philosophy of controlling every part of the sales process, including the agenda. However, in my view, too much is made of “agenda control.” It may sound nice to control the agenda, but all sides in a negotiation have issues that need to be addressed, so control is not as important as managing the agenda.

The overall agenda is comprised of the “macro agenda” where you are focused on the actions and sequence over the timeline of an entire transaction, and the “micro agenda” where you are focused on each specific interaction and how you can leverage that action to move closer to closing the deal.

The opening and closing of meetings or interactions, whether in person, video conference or phone, are important elements of agenda managment. Opening begins before the meeting starts. It includes setting the anticipated subject matter to be discussed and listing the appropriate attendees. This is when we set expectations for both sides and most importantly, help identify the resources that are available to fulfill those expectations. Sending a simple agenda before the meeting is appropriate and will be appreciated by your counterpart(s).

There are two tendencies we must avoid when closing meetings. First, some people are reticent to summarize open items, particularly if the meeting was a good one, because they do not to want to close with issues on which there is disagreement. However, those issues do not go away on their own. Raising them at conclusion of meetings helps define a path, responsibilities, and timeline for resolution.

Tendency two occurs with salespeople or services professionals, who want to please the customer and solve problems. When open items are raised, they often take on the responsibility to solve them. Please don’t do this automatically. Be selective and give the other side (your customer) tasks to complete – in fact, see if they volunteer for tasks. This will tell you a lot about how vested they are in getting a deal done with you … or not.  Both parties should be spending time, money, and resources on the deal. Otherwise, it is only you who has the increasing psychological stake. Give them a chance to share the ownership with you for getting the deal completed.

Why Agenda Planning is Essential

There are sales managers and reps who believe they can rely on their skills and achieve a successful outcome by “winging it.” This is where agenda management comes into play. Even if you are strapped for time, you should invest adequate time to prepare. This is the sales version of the famous Abraham Lincoln quote: “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

The time you take to prepare will not be lost on the customer, and will enhance your credibility, as most customers will understand that you have done so despite a shortage of time. The opposite is true if you attend calls unprepared. It’s the equivalent of a pilot flying a new plane without simulator training. While the consequences in a sales or business negotiation may not be life threatening, the result is damaged credibility and lost opportunity.

Since the Covid pandemic, many of our face-to-face (F2F) meeting have been replaced by video conference calls or phone meetings. There is a potential trap here because participants often underprepare for video or phone meetings. With remote meetings, personal pressure is minimized since participants feel they are less likely to face embarrassment. A smart negotiator reminds attendees to review materials and come prepared and this can be a difference maker in negotiation outcomes.

There are ways to use agenda management as a tactical tool to rescue negotiations that are off track. As an example, I received this question during  a guest appearance on the Wharton Business Daily podcast:

Caller’s question: How difficult is it when you get into a negotiation and one person monopolizes the conversation on their particular area? It’s not like you can break the meeting right in mid-stream and take those people outside and have that conversation with them.

My answer: It’s okay to take a time out but you need to gauge when the appropriate time is to take a strategic pause and have a discussion with the person who is leading the negotiation on the other side. If the person who is leading the negotiation is the one that’s pontificating, it becomes a little bit more challenging.

In those cases, it’s okay following a break, to ask for a few minutes to talk about the agenda and define it in such a way that it includes the amount of time spent on each subject. This is a non-confrontational way of moving the agenda along. However, this will not be effective if you did not bother to take time upfront to prepare that agenda in a way that gains agreement from the other side.

Successful agenda management is all about aligning each party’s activities and resources across a rational timeline to reach the desired result in a given timeframe. 

 

Want to see more examples of how we apply our negotiation methodology to solve challenges — from dealing with intimidation to making stronger value arguments? Click here!

Three Essential Negotiation Do’s and Don’ts

During our conversation on the Sales Reinvented podcast, host Paul Watts asked me what I considered to be the three most essential do’s and don’ts of sales negotiations. After 30+ years negotiating and writing books and articles about sales negotiation strategies, narrowing the list of negotiation opportunities and pitfalls down to three was a tough challenge.

Following are the three that first came to mind as I spoke with Paul, and upon reflection, they hold up as crucial to negotiation success. They are important because they relate to credibility (for both you and the company you represent) and your ability to accomplish the mission (e.g. making the sale), while creating and preserving a relationship that will get stronger over time. Practicing these common-sense approaches will always serve you and your team well.

  1. DO Listen more and talk less. Many sales reps are type-A personalities who are impatient and love to talk. Traditional thinking involves convincing the sales prospect through the power of your arguments. However, to be a successful sales negotiator, you must understand your customer and you cannot do so unless you listen well. Listening and patience demonstrate curiosity and compassion, and enable you to gather the information necessary to anchor your value proposition in the customer’s context.

    To improve in this area, purposefully slow your pace, talk less, and ensure that you understand what you hear from the customer. Then, if you politely repeat what they said, you will demonstrate that you care. Realize that you will always have the opportunity to make your value argument at some point. But first and foremost, you want your counterpart to feel heard and understood. Then their own willingness to listen to your value proposition increases.

  2. DO Prepare and plan — do not “wing it.” This is where agenda management comes into play. Even if you have limited time, you must use that time to prepare efficiently. In fact, when you lack time, it is more important to manage the agenda, yet we find that one of the first things to suffer when people are under time pressure is agenda management. This is the sales version of the famous Abraham Lincoln quote: “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” The time you take to prepare will not be lost on the customer, and will enhance your credibility, as most customers will understand that you have done so despite a shortage of time.

    The opposite is true if you attend calls or meetings unprepared. It’s the equivalent of a pilot flying a new plane without simulator training. In dealmaking, while the consequence may not be life threatening, the result is damaged credibility and lost opportunity.

  3. DO NOT make arbitrary concessions. This means that you should not automatically concede to a request just because a customer asks, even if, theoretically you can make that concession. First, listen and ask clarifying questions (see point 1 above). Responding too quickly can be detrimental to one’s credibility and prolong the process. Instead, we should engage in a process where the moves we make have credible business rationales that the customer understands. We call this a principled concession process. This is the opposite of unprincipled concessions which can occur when a concession appears arbitrary – such as a discount given just because the customer asks (or, as we have sometimes seen, even without a customer asking).

    Unprincipled or arbitrary concessions can seriously damage your credibility. This is a negotiation inflection point and the way you react can keep the process on a path to success or one headed for failure. Customers, especially procurement organizations, make concession requests for a variety of reasons that include competitive pressures (yours and theirs) and other credible business reasons, as well as testing your resolve. If you make concessions where the business rationale is unclear such a concession will seem arbitrary, and the customer is likely to feel that you have more to give or lack resolve, either of which leads to continuation of the process and potential credibility issues.

    So, what is the alternative? It is to ask that simple but profound question: “Why?” This will help you uncover the reasons for their objections. Do they have legitimate competitive price concerns, are not sold on your value or are just fishing for a better deal. By searching for the “why,” you can develop the business rationale for a principled concession if a concession is needed or the rationale for holding your position, while giving yourself more time to craft the appropriate relationship-maintaining response. Perhaps that is a change in scope and outcome or an alteration of terms.

Employing these three strategies in your sales negotiations will generate more favorable results and create longer-term valued relationships with your customers!

For more information as well as resources you can use to improve every aspect of your business and sales negotiation process, please visit: https://www.negotiators.com/resources/.

negotiation skills

Negotiate Like a Pro: Ask the Right Questions

As you may remember from part one of this series, Gaining and Maintaining Positive Leverage, I had the opportunity to join Kison Patel, CEO, and Founder of M&A Science, as his guest on the M&A Science podcast earlier this summer. Kison and I spent over an hour talking about negotiation strategies and tactics in an episode titled, How to Negotiate Like a Pro. You and your team may gain great value from the strategies and tactics we discussed so have a listen and share with your colleagues.

In our practice, we use a tool called the Risk Reward and Action Matrix. Basically, the purpose is to clearly identify the drivers and inhibitors to a customer’s decision to act.  This tool outlines the rewards (benefits) your prospect will receive by taking the suggested action (e.g. purchasing your solution) versus the risks incurred by not acting. And this is one of many areas where it is more important to ask the right questions than delivering a sales pitch. In fact, asking the right questions gives the prospective customer comfort and their answers should become a key part of your persuasive sales pitch.

The ability to ask questions is sometimes constrained by the fact that many business and sales professionals (including me) are type-A personalities. As such, our tendency is to get to the point, move the process forward and close the deal without undue delay. However, one thing I learned over the years is that patience and listening are two skills we must nurture in order to develop the portfolio of information that allows for accurate risk-reward analysis, as well as effective scenario planning.

We’ve all heard the admonition that we have two ears and one mouth because we are supposed to listen twice as much as we talk. While there is much wisdom here, no matter how well intentioned, when people are immersed in their own deals and facing pressure to make something happen, they can lose the ability to listen as well as they should. This is where situational awareness and professional negotiation training can be a strong asset.

Asking the Right Questions is a Superpower

You always have the opportunity to listen, particularly if you take the time to ask good questions. In the negotiation context, good questions start with curiosity. I’ll talk in a future article about how empathy is a business accelerator, but it helps to understand that empathy begins with curiosity, which is the fuel for asking great questions.

Your objective in asking the right questions starts well before you meet with your counterparts. It begins with research into their organization. You want to know as much as possible about what is going on in their industry, and more importantly, the drivers their company and the individuals you are dealing with are facing – what are the hurdles, what are the competitive pressures, what are the opportunities, etc. This research – much of which you can accomplish online – provides the context to make sure your questions are timely and relevant.

If you happen to be dealing with senior executives you can find plenty of online information to help understand individual motivations, which are often as important, or more so, than organizational imperatives. Perhaps the executive has taken over someone else’s job recently, or been part of a corporate shakeup. If so, what was the problem and why were they hired?  Basically, I want to know two important things – first, what’s motivating them? This is the “why” question that is really about the current state. Second, I want to know the flip side of the why coin – their objectives and the desired future state?

The Importance of Discovering Objectives

The subtext here is that you want to understand how to help your negotiation counterparts achieve their most important personal objectives while serving the needs of the organization and their business objectives. If we are going to do a deal, it has to be related to enabling them to achieve that future state. This is true whether you are selling a product or service, doing an M&A deal, or hiring a new employee.

Relative to hiring, when I interview potential teammates, I often make more judgements based on the questions they ask than I do on the answers they give. I want to know whether they have conducted quality research about me and my company and possess the necessary levels of curiosity and empathy. I am also validating whether the candidate is able to convert this curiosity and empathy into a logical and structured set of questions. If you are hiring salespeople, it is particularly important that they demonstrate these skills.

One important point is that, while formulating and asking great questions is important, so is the ability to sit back, listen carefully, and overcome the urge to jump in with an answer. Every pause is not an opportunity to show your brilliance and interjections will often stop the flow of information you need to move the deal forward.

While it is important to ask the right questions, refraining from asking the wrong questions is also crucial.  Generally, we should not ask questions that we could answer easily through basic research. For example: “What were your revenues last year?”, or “How many employees do you have?”  Questions like these, unless placed in a thoughtful context (such as validation of a larger premise) will seem trite and can damage your credibility.

Canned questions that sound like they came from a sales training seminar are also a no-no. My least favorite of this genre is “What keeps you up at night”?

If you ask the right questions, you’ll find out soon enough what your prospect values most, and what it takes to move the deal and your relationship forward.

For more about how to negotiate like a pro, listen to the podcast. You can also find plenty of informative and actionable negotiation strategies at the K&R Negotiations resources page.

Messaging-Consistency-Negotiation-Success

Messaging Consistency Is Vital For Sales And Negotiation Success

I was recently asked to provide my thoughts on how to better align sales and marketing teams for a Forbes Councils expert panel. Given limited space, I answered as follows:

To align the combined sales and marketing team, the messaging and materials need to be consistent. Also, the marketing staff will benefit from sitting in on sales calls and later-stage negotiations to learn more about real-life buyer objections and motivations and how to address them with more compelling marketing approaches that align with customer and sales force expectations.”

While this is a fine short answer, it deserves a deeper discussion. In our consulting and training practice, we’ve seen major deals disrupted due to inconsistent messaging. I have observed executives backpedal over something their sales rep promised that was unworkable or too costly to deliver. Just as often, I’ve seen this happen in reverse: A sales rep is forced to retreat because of something the CEO or another executive stated.

There are numerous consequences of inconsistency that will affect potential customer relationships, including:

  • Loss of credibility. The prospect who hears conflicting messages will mistrust everything you tell them.
  • Loss of leverage. Given different stories, customers default to the narrative most favorable to them, possibly costing you revenue and profit.
  • Increased tension and conflict. They will pit the conflicting message groups against each other (“Your sales rep promised me ____. Are you now telling me you can’t deliver?”).
  • Loss of negotiation capital. This is about a customer’s willingness to work with you.

The Three Cs of Consistent Messaging

Consistency of messaging requires at least three elements, all of which are dependent on teamwork. I call them the three “Cs.”

The first element is communication. For a team to be coordinated on messaging, there has to be frequent communication, both horizontally and vertically. When an executive promises something to a prospective customer that is beyond your capabilities, it’s often because the executive was never fully educated on the limits of those capabilities.

Communication requires the second element — context — especially as it relates to customer requirements. Messaging improves when everyone on your team has the same understanding of the customer’s environment, pain points and how your solution addresses that pain. Achieving this requires a uniform way of interviewing and capturing input from the prospect as well as communicating that information accurately and thoroughly to teammates. Communicating context clearly is not optional and we should not rely solely on oral accounts from memory. The accuracy and value of information that is not written or recorded drops rapidly.

We have seen sellers solving the “wrong” customer problem because they did not fully understand the context developed by a technical peer working with the customer. In one case, a sales leader for one of our clients kept promising to deliver a multi-channel solution (technical capability to sell across all devices) for a customer within a certain timeframe, while the technical leaders for both companies were fully engaged in solving a security issue that was clearly more important.

The third “C” is coordination. We often refer to this as rules of engagement. A team needs to have an agreement on who will communicate with the customer on what subjects at what times. While not a perfect process, attention to coordination reduces the chance of mistakes and minimizes the likelihood that a C-level executive will jump into a deal midway in the process without a full understanding of what has been said and how they can assist.

Negotiation Capital

Messaging consistency, or lack thereof, affects what we coined as “negotiation capital.” It’s the willingness of the other side to compromise, i.e., work with you. It’s easy to lose negotiation capital with inconsistent messaging, but it takes time to gain it by establishing credibility, fostering goodwill and delivering on what you promised. The good news is that once you establish negotiation capital, it can be utilized as deal “currency” that increases the other side’s willingness to move closer to your way of thinking. And, negotiation capital can be used to offset negotiation obstacles. A simple example is customers who we have heard say something like, “They have overcome these obstacles before, let’s go with them.”

Marketing materials are often viewed by potential customers as generic statements that exaggerate and obfuscate. To ensure this is not the case, it’s important to customize the materials for particular customers. This tailored information earns credibility when accompanied by statements like, “In your environment, this will mean _____.” Having marketing personnel participate in sales and negotiation meetings with important customers and prospects enables them to create relevant materials.

The most extreme form of inconsistent messaging is not exaggeration, but outright misleading statements. Of course, this can lead to numerous negative consequences, including the erosion of negotiation capital. In fact, even a perception of falsity can result in lost opportunities and market impact. A good example is the allegation of misleading demonstrations by electric vehicle developer Nikola Corporation, whose stock fell by more than 50% when the CEO resigned. So far, it seems the company has built enough negotiation capital that its deal with General Motors will remain intact, though that is a tenuous proposition.

People are imperfect and make mistakes. In the vast majority of cases, inconsistent messaging that causes potential credibility issues is unintentional. If your customer brings inconsistency to your attention, you should immediately clear up any misunderstandings and communicate this to your customer and team. Remember that every second you spend arguing or trying to deflect when you make an error, your position and your credibility erodes. Whatever you do, resist the temptation to keep trying to explain away the discrepancies — or as the saying goes: when you find yourself in a hole, stop digging.

Consistent messaging based on the three “Cs” with attention to negotiation capital makes life much simpler for you, your teammates and your customers and prospects.

Note: this article originally appeared in October, 2020 on Forbes.com. You can view the original post here.

remote business negotitation

Prospering In Your Business Negotiations Despite Global Crises

B2B enterprises depend on collaborating with other businesses for survival and growth. This often requires face-to-face (F2F) meetings with other professionals. What do you do when the ability to travel is constrained and F2F sales or negotiation meetings are canceled?

You have only two choices: Stop business, or conduct activities using current communication technologies. Since most of us will not cease doing business, we opt for the latter, whether we do so through online meetings, video and teleconferences, or collaboration platforms. Some may even use email and texting.

Negotiations by means other than F2F can be less costly and time-consuming. You can avoid travel and negotiate from your home or office with access to data and your staff’s expertise to address items on the agenda. And, selecting negotiation locations isn’t an issue.

Working from your own location allows you to utilize web resources that you may be reluctant to access in F2F meetings. For example, if a customer mentions your competition, you can access information on your competitor while you are engaged in negotiation. However, this multitasking can be distracting and can impair productivity.

So, when negotiating remotely, we must deal with the disadvantages of alternate platforms.

What are these disadvantages? Here are four I’ve dealt with frequently:

1. Preparation and productivity.

2. Team management: You need to consider communication, concentration and attention spans.

3. Agenda management: What are the rules of engagement?

4. Connecting with participants.

If you’re replacing F2F sessions, it’s even more important to ensure that the participants are prepared. In F2F meetings, preparation is often better because participants don’t want to be embarrassed. With remote meetings, this personal pressure is minimized. Reminding attendees to review materials and come prepared is a critical part of agenda management.

In important meetings, you should identify who will lead discussions, how other participants will be asked to participate and the extent of their responsibilities. That’s part of the “rules of engagement.” In F2F meetings it’s difficult but possible to stop someone from misspeaking by using nonverbal cues. In remote meetings, it becomes almost impossible, so rules and roles should be clear. Your text or message will inevitably be too late if they have already misspoken.

Additionally, inadequately prepared participants are more likely to speak out of turn. A good example is a situation where we were on a call and told a prospect we were going to mute them to discuss some things internally. They continued talking about what they’d be willing to pay, so we turned off mute to let them know we could still hear them. They said “OK.” So, we put them back on mute — and heard them say they’d be willing to pay us up to $1 million. This development made our negotiation much easier.

One advantage of F2F is the undivided attention of the participants. On remote conferences, that advantage is sometimes lost. Participants often multitask. It’s important to set rules for your team to ensure they’re fully engaged and ask them to reschedule activities that could interrupt the meeting. Phones and texts should not be answered (which is also a good F2F management technique). Distracted participants cost productivity for all, as they miss critical points which in turn necessitate repetition or cause the “nonlistener” to omit actions or take the wrong actions — both of which can require remedial steps.

This places a premium on summarizing each call, including what everyone agreed to and what still needs to be done, as well as the follow-up actions and responsibilities of participants. Again, agenda management is key.

Remote negotiations can have additional drawbacks, even if you are able to see the other participants on video. It can be more difficult to make a personal connection remotely. If you are negotiating with people you’ve never met, I’ve found that it’s harder to interpret anything beyond the literal meaning of their words. While inflection of voices may come through, body language is harder to read, especially that of participants who are not speaking. (On many video platforms, only the speaker’s image is clearly visible.)

Of course, you can’t read any body language on a phone line. That makes it difficult to grasp the full meaning of a person’s conversation, as you can lose the subtext of their speech.

Certain F2F negotiations are complex and require hours or days. Obtaining that level of concentration in a remote environment is even more challenging. You should ensure that these negotiations are broken into logical segments and that the agendas are managed well for each segment. Again, participant commitment is key.

So, what should we do to maintain productivity, concentration and communication in any environment where we cannot meet our customers, vendors or partners?

1. Prepare an agenda. Gain the other side’s agreement, and ensure they have the right participants to make each session productive.

2. Obtain your team’s understanding of the rules of engagement:

• Who will lead and how?

• What is expected of them regarding preparation and participation?

• Who should be taking notes for the summary and follow up?

3. At the beginning of the session, take time for introductions. (It’s not a substitute for personal F2F connections, but it gives everyone some “face” time.)

4. Also take time to ask the other side good questions and listen to their answers. Active listening allows for better connections.

5. Summarize the session, including follow-up responsibilities of the participants.

The world we live in is imperfect, but those who remain productive during challenging times can continue to be successful, and managing remote negotiations is one key to that productivity.

Note: this article originally appeared March 2020 on Forbes.com. You can view the original post here.

keep cool tense negotiations

How to Keep Your Cool – Even in Tense Negotiations

I have written quite a bit about how to sharpen you and your team’s professional negotiation skills to close larger deals, faster. However, there are many times professionals lose otherwise quality deals because the seller, the buyer or both, can’t keep their calm when the discussion becomes tense.  We have recently seen a client get so emotional in a discussion that the other side would have walked away had cooler heads not prevailed.

Rudyard Kipling talked about this as a virtue in his famous poem If: “If you can keep your head when all about you are losing theirs and blaming it on you.” Great aspiration, but how to accomplish this with rude, inflexible and humorless negotiators?  What if they are even downright nasty? Consider this scene:

The chief negotiator for Dewey, Cheatum and Howe is sarcastic and condescending. In the middle of a tense negotiation, he says: “Gee. Harvey, I’d make this offer if I thought you and your team could understand it.” He is a nasty piece of work. “Arrogant” and “obnoxious” come to mind. Plus, he fails at personal grooming. Add “offensive” to the mix.

Perhaps I’m exaggerting to make the point but what should you do if confronted by such a scenario? The natural inclination is to tell the person off. But being the smart negotiator that you are, you say to your team, “SO WHAT?” Yes, you would rather do business with people who are pleasant. Yes, you would rather do business with people who are not rude and arrogant. Who wouldn’t? But if you’re doing business with someone who is annoying or mean-spirited, stay cool and focus on the merits of the transaction.

Keep Your Focus

I am not advocating for avoiding minor conflict, as heathy disagreement is a necessary part of the negotiation process. Perhaps the individual in question is truly unreasonable or mean-spirited – such people exist. However, any worthy negotiator on the other side—although we like to refer to them as “business partners” or “customers”—will attempt to recognize and understand your strengths and weaknesses early in a negotiation. From that point on, they will try to take advantage of your weaknesses and get around your strengths.

The key point here is to always keep your emotions in check and strictly focus on the merits of the transaction. Ask yourself: “Does this deal make sense for both parties?” If the answer is “yes,” then go about your business and make the best deal for yourself and your company.  Remember, as long as the deal makes business sense for them also, they would look very bad to their peers and superiors if they didn’t get it done. Or, to put this a different way, concentrate on the merits of the deal, not on the behavior of the person on the other side. (Footnote:  Of course, there are limitation when the other side “crosses the line” by going beyond merely rude to clearly offensive, in which case you need to judge how and when to bring it to their and their management’s attention.)

It’s Both What You Say and How You Say It!

Often—in negotiations as in our personal lives—it is not what you say, but how you say it. Our interpretation of words in a specific situation and the way we respond to them depends on our experiences, values, and emotions. Sometimes people use different words to mean the same thing. However, many words carry loaded overtones, connotations that are different from their dictionary meanings.

For example, the words “cheap” and “thrifty” have the same denotation (dictionary meaning): frugal. But wouldn’t you rather be called thrifty than cheap during a negotiation? (Or at any time, for that matter!) Cheap has a negative connotation of “tight-fisted”, while thrifty has the positive connotation of “wisely economical”. Similarly, the words “stubborn” and “resolute” both mean persistent, but stubborn carries a negative connotation of “obstinate” and “pigheaded,” while resolute carries a positive connotation of “purposeful” or “resolved.”

As a negotiator, it’s important to be sensitive to the use of words, otherwise you run the risk of offending someone. More importantly, their behavior toward you may conform to the negative tone you’ve set and you won’t have a clue why! One of the best ways to not lose your cool is to never give the other person a reason to be upset in the first place.

Sometimes, personalities simply don’t mesh for a myriad of reasons.  Following the principles outlined in my book Negotiate Wisely in Business & Technology, you can reconfigure the negotiating team with compatible personalities. This alone can improve your odds of eventual success.

One final thought

When all else fails, it may be worthwhile to find a way to relieve the pressure during a tense negotiation. This can come in two forms: planning events during the negotiation and specfically, within a tough meeting to change the tone. Ways to relieve the pressure include social activities, informal meetings, off-hour activities, and humor. Changing the environment and getting away from the business conference room can be a very effective way to improve a situation that’s gotten testy under the pressure of getting the deal done.

Within a meeting, relieving the pressure may involve taking a break or the use of humor. Assuming you are one of those people who can deliver an amusing (non-offensive) line, this can be a great way to get everyone back to a more positive mindset. I agree with actor Ted Danson’s comment, “Humor can bring people under the tent. And a good joke can deflect some of the intensity surrounding a serious subject.”

I wish you great success in keeping your cool and succeeding in all your negotiation environments.

Negotiations touch every part of your life.

No Matter Your Role, You Can Always Benefit By Sharpening Your Negotiation Skills

Negotiations Touch Every Part of Your Life and Career

It doesn’t matter whether you’re buying a car or an enterprise software system: negotiations touch every part of your life, every part of your career, and will have a major impact on your personal success. Dealing with a regular client who, at the eleventh hour, wants a little extra outside the scope of what has been agreed upon? You’re in negotiations. Trying to get consensus on a critical marketing campaign? You’ve become a negotiator by default.

Then there are all the formally recognized situations where negotiation is explicit, highly formal and usually high-stakes: sales, procurement, mergers and acquisitions, partnerships and licensing arrangements, to name a few.

One of the fundamental principles we teach in the course of our business negotiation training is this: the concept of M.O.R.E., which stands for Motivations, Objectives, Requirements and Edge — Edge being the advantage you gain once you understand the other side’s unique motivations, objectives and requirements.

You are much more likely to succeed when you come to the negotiating table with not only a clear sense of your negotiation counterpart’s business realities at the organizational level, but also the individual drivers of those involved. And making assumptions at either level can be foolhardy.

That’s why we advocate for a methodical, patient and constructive approach to negotiation that stresses listening and learning as much as possible, and taking concrete steps to discover what passions or pressures really drive a request or demand.

Of course, this means understanding your own M.O.R.E. factors, as well. (We all know what Sun Tzu had to say about the prospects for a commander who knows neither himself nor the enemy.) What are you hoping to achieve? What course can you set to articulate your own value drivers so that you have clearer guideposts to follow and create better deals for everybody?

This is why we focus on the needs and roles of every layer of a client organization: from each chair of the C-suite, to the sales director, to the project manager, to the lawyer who must carefully define and protect key terms.

Based on our three decades of work with leading global organizations, we created a high-level role-based view of negotiation from various chairs in the organization, including: CEOs, CSOs, CLOs, project managers, sales managers and attorneys.

BATNA (best alternative to a negotiated agreement) Woman tears agreement documents in front of agent who wants to get a signature

Why You Need Better than BATNA: Formulating a Defensible “Walk Away” Rationale in Negotiations

Either through becoming emotionally invested, getting pressure from leadership or being unable to analyze key factors that should indicate retreat, business negotiators often find themselves spending long amounts of time on deals of diminishing — or even illusory — value.

One of the cornerstones of negotiation theory is BATNA (best alternative to a negotiated agreement), advanced by Roger Fisher and William Ury of the Harvard Program on Negotiation (PON) in their book, Getting to YES. Read more

Using Your “Incumbency” to Create Positive Leverage in Negotiation

Some concepts are better expressed using an example. Our client was at a crucial juncture with their customer — a European bank. In just three months, the time frame was expiring on an agreement to provision identity access management. That project had been running for three years, and had progressed substantially as forecasted. So a renewal to continue with the work was being discussed, plus, our client wanted to extend the scope of services for 24/7 identity and access management, which they believed the customer could use.

This project was extremely complex, and it was incumbent on our client to express the value delivered to that point. This is extremely important: Nobody owes you recognition of your value. You have to make the case!

Being successful in this situation meant Read more