A lawyer recently hired me to help negotiate the settlement of a very large lawsuit. After spending several hours discussing the negotiation, I inwardly groaned.
My client, while a successful lawyer, had unwittingly made a major strategic error in the negotiation. This error, if not immediately addressed, might cost his clients a ton.
Unfortunately, my client is not unique, even among experienced negotiators. The fact is, most negotiate instinctively or intuitively. They do what “feels” right, or adhere to a few rules of thumb they learned from a mentor early in their career.
Very few negotiate strategically and take the time to study the process and implement best practices. As a result, many successful individuals fail to achieve the most they can in negotiations.
Given this, I thought it would be helpful to list the five best ways to avoid the most common negotiation mistakes I have observed.
1. Prepare strategically, not instinctively.
Legendary UCLA basketball coach John Wooden said, “Failing to prepare is preparing to fail.” In the negotiation world, I would amend this to say “failing to strategically prepare is preparing to fail.”
Most fail to strategically prepare. They may learn and understand the substantive issues involved, such as the underlying facts and positions. But they will give short shrift (if they even know them) to the strategic, process-only elements involved, like whether and when to make the first offer, ways to improve their leverage, and how to control the agenda.
Don’t make this mistake. Study and learn the strategic elements involved. Then strategically prepare and put them into practice.
2. Ask and listen. Don’t try to persuade.
Many bright individuals start negotiations by trying to persuade their counterparts of the alleged correctness of their position. In essence, they say “give me what I want because it’s fair and reasonable, and here’s why.”
Resist the urge. Nine times out of 10, I find that the more effective negotiator will be the one with the most sophisticated questioning and listening skills. Research has indicated that the most effective negotiators ask at least two-and-a-half times more questions than others.
Ask more questions. The more information you get, the more power you will have.
3. Get into your counterpart’s head.
Most focus on what they want at the end of the negotiation. It’s natural. And critical. Analyzing your fundamental interests and setting appropriate goals are extremely important elements of the negotiation process.
But don’t stop there. An equally crucial key to negotiation success is finding out your counterpart’s goals and how you can satisfy your counterpart’s self-interest. While this is more difficult, you may find that your preconceived assumptions about what they want may be inaccurate.
Such inaccurate assumptions can turn collaborative win-win opportunities into competitive lose-lose results. Don’t let this happen to you.
4. Don’t assume leverage is static.
“I’m in a very weak negotiating position,” some tell me. “I really need a deal, and I don’t have a good alternative.” Many simply will accept this disadvantage.
Don’t. Your leverage may be weak today, but since leverage is fluid, you often can improve it.
How? Invent alternatives to take if you can’t or don’t reach a deal with the other side. Then take practical, concrete steps to make these realistic possibilities.
If you have only one offer for your business, solicit more potential purchasers. If your flight to New York gets delayed and may be canceled, reserve a seat on the next flight out.
The better your alternatives, the greater your leverage. Don’t accept weak leverage. Improve it.
5. Don’t jump to the offer/concession stage too soon.
Many in the U.S. culture like to “cut to the chase.”
“Why waste time with the preliminaries when we both know where we’re going and where we’ll end up,” they’ll say. “It’s inefficient.” So they make an offer or a concession early on to “get the process going.”
Bad idea. Be patient. Understand that the atmosphere and the information exchange process often become more tense and competitive once parties enter the offer and concession stage.
So when should you start? Most often, wait until you’ve sufficiently: 1. gathered information; 2. evaluated and improved your leverage; and 3. analyzed what standards underlie both sides’ perception of a fair and reasonable result, i.e., market value, precedent, an expert’s opinion, etc.
Fully explore these strategic elements before jumping into the offer/concession stage. If you don’t, your first offer or counter may be your last.
Sometimes, it makes sense to go with your instincts. Other times, your instincts will lead you astray. Even the most experienced negotiators make these five common mistakes. Why? Because many rely primarily on their instincts.
The most effective negotiators know they cannot afford to do this.
Published July 5, 2002 The Business Journal