You’re at your desk around 9:30 a.m. looking at your overwhelming “To Do” list, your stacked-up “In” box and wondering if your bonus – for once – will reflect your true value. Then the phone rings.
It’s Bob, a potential strategic partner, calling to discuss your proposal to jointly market your new product. You scramble to find the proposal on your desk, locate it (no mean feat) and jump right into the negotiation.
Occasionally, you jot down a note about the discussion.
Thirty minutes later, after Bob has rejected most of the elements in your proposal and offered seemingly reasonable alternatives, you tentatively agree on the major deal points. Bob then suggests he’d be happy to draft it and send it over. Your readily agree after looking again at your overflowing “In” box.
Two weeks later, despite some misgivings, you ink the deal. You know it’s not great, but your boss says it’s better than the alternative.
You wonder what went wrong, and how you might have improved your outcome. Here are some thoughts.
Start off by recognizing that telephone negotiations produce a different negotiation dynamic than in-person negotiations. Thus, they require a different approach.
For example, when you picked up the phone and unexpectedly heard Bob on the line wanting to negotiate, you inherently were at a disadvantage.
In all likelihood, Bob had just finished analyzing your proposal and preparing to negotiate with you. He probably had a checklist of questions to ask and issues to address, knew what he was willing to offer and concede, had already developed some options that might satisfy his interests and evaluated the strength of his alternative if your deal submarined.
Contrast this with your situation when you picked up the phone. Were all the substantive and strategic information at your fingertips and ready to engage? Not likely.
Ill-prepared? Probably.
Yet most of us will negotiate anyway.
Resist the urge. Tell Bob you’re in the middle of something (invariably true), and you’ll call him back in 30 minutes. Then grab your file and prepare. Get on an even footing. Telephone negotiations, as opposed to face-to-face negotiations, also make it easier to say no. It’s a relatively impersonal environment (albeit not as impersonal as a letter or an e-mail), and it’s thus easier to say no than to reject in a face-to-face encounter.
Recommendation? If your proposal requires a significant change, make a personal oral presentation or set up a meeting.
In-person negotiations also have the added advantage of lessening the likelihood of misunderstanding and providing parties with the opportunity to observe body language, facial expressions and behavioral cues.
Accurately reading nonverbal signals can prevent crucial long-term problems.
In addition, phone negotiations often take less time, lead to less information exchange and make it more difficult to establish a good relationship.
The negotiation dynamic likely will be more competitive with an increased risk of no agreement.
In circumstances involving little information exchange and zero-sum issues – where $1 less for the other – this might be optimal.
However, if you want a long-term relationship with a strategic partner, meet him or her personally.
Finally, use the power of the pen. Take detailed notes of your conversation or meeting. Then draft the agreement. Why? One, memories fade – some faster than others. Thorough and accurate notes, however, will be relied upon by everyone.
Two, you’ll be a more effective listener if you know you’ll be drafting the agreement. Effective listening is a critically important negotiation skill.
Three, your written draft will set the framework for future negotiations. To change it, practically speaking, they’ll need to convince you.
And four, preparing the agreement will give you the opportunity to control its structure and draft unaddressed or ambiguous issues. While you should be careful not to undermine your credibility, minor drafting and other issues often arise here.
The drafter gets first shot. And the draftee often ignores small issues. Take advantage of it.
Your counter party will probably even thank you for doing it. At the end of the negotiation, so will your boss.
Published December 24, 1999 The Business Journal