Last month I shared some top business negotiation lessons from Steve Hilton, Executive Chairman of Fortune 500 company Meritage Homes. Today, here are four negotiation pearls of wisdom from Nick Schacht, the Chief Global Development Officer for the Society for Human Resource Management (SHRM), the world’s largest HR professional society with over 300,000 members in 165 countries.
- Your overall strategy should be very fact dependent and specific to each negotiation, so “pick tools and approaches for [each unique negotiation] situation.”
- My thoughts: Three crucial points. One, successful business negotiators prepare an overall strategy for all their significant negotiations – and it must be strategic and not instinctive. So plan it and don’t wing it! Two, an unlimited number of variables exist in any negotiation and your flexibility and creativity in addressing those variables can easily make or break a deal. And three, while generally applicable strategies and tactics apply universally (what I call the Five Golden Rules of Negotiation), how and how aggressively you implement them should vary significantly. One-size-fits-all strategies rarely work and can easily backfire when used in dissimilar environments. For example, don’t hold your cards super close to your vest or use aggressive leverage-related tactics like bluffing in negotiating with long-standing business partners.
- Information gathering tactics like “being able to listen and ask questions” are critical, especially the “power of silence.” Schacht noted that silence “is anathema to most in the western world” and sometimes letting silence just lay out there can open the information floodgates.
- My thoughts: Absolutely true. As many of you know, Information is Power-So Get It! is my First Golden Rule. I would also add that many younger negotiators view negotiations as an effort to argue and persuade. Not true. Expert negotiators know that asking and listening skills and the ability to elicit a counterpart’s fundamental needs and interests are far more effective than debating skills.
- Sometimes your best strategy is to “adroitly use the word ‘no’ and walk away and see what happens.” Schacht shared two examples of large business deals where he walked away early on, said “no” multiple times, and his counterparts came back later and either doubled their offer or conceded on the biggest sticking point in the negotiation.
- My thoughts: Saying ‘no’ and walking away – sending the message that your Plan B alternative is better than the Plan A on the table – represents perhaps the most powerful move in a negotiation and is fundamental leverage. Making this move, when appropriate, can benefit you in multiple ways. But it needs to be carefully evaluated given its impact and risks involved.
- A good business relationship between the business folks at Disney and Learning Tree saved a large deal when it looked like the deal might crater.
- My thoughts: It’s tough to overestimate the impact of productive and trusting business relationships in negotiations between partners and potential partners. Likewise, the lack of such a relationship can destroy great deals.
Latz’s Lesson: Specific fact-based strategies. Asking and listening. Saying ‘no’ and walking away. And the power of business relationships. Put these in your negotiation toolkit and use them. Success will likely follow.