“I left a fortune on the table because I went against my instincts in that negotiation,” a highly successful businessman and real estate developer told me recently.
“Yet I know it’s critical to negotiate strategically and not just rely on your instincts,” he said. “How should we resolve this apparent conflict?”
First, the negotiation research is clear — there is a right way and a wrong way to negotiate in most circumstances. And by consciously knowing what works and what doesn’t, and letting this strategic knowledge guide your negotiation moves and tactics, most individuals will substantially increase their likelihood of achieving success.
This, in essence, is strategically negotiating.
On the other hand, if you only negotiate instinctively or intuitively and, in effect, just wing it, you are leaving your likelihood of success much more to chance.
It’s not that you cannot achieve the best possible result. It’s possible, just much less likely.
Second, the negotiation research largely derives from two sources:
1. An analysis of how the most effective negotiators achieved success, how others have failed and what has occurred in many of these negotiations.
2. Controlled experiments in which certain strategies have worked and others have failed.
The first source of this research, importantly, involves identifying and cataloging the most effective negotiators’ instincts regarding what to do in various negotiations, and then sharing these effective strategies with everyone else.
So what role should instinct play in your negotiations? Here’s my advice.
• Get the knowledge to do it right. Learn what the best have done and what the research suggests will most effectively help you achieve your goals. Bone up on what the negotiation experts suggest.
Then apply that knowledge to your negotiation situation.
And even if the negotiation research doesn’t give you a clear answer as to how you should negotiate, it will likely provide you with insights into how you should strategically think about the important issues in your negotiation.
• Strategically plan to implement that knowledge. Use this knowledge to comprehensively and strategically plan for your negotiation.
You should spend at least twice as much time planning for your negotiation as doing it.
And don’t just prepare by learning and understanding the substantive elements likely to be at issue.
Strategically plan for the process itself. How?
Go through my Five Golden Rules of Negotiation and apply them to your situation. These include:
1. Information is power — so get it!
2. Maximize your leverage.
3. Employ “fair” objective criteria.
4. Design an offer-concession strategy.
5. Control the agenda.
Based on these, prepare a strategic plan.
• Execute your plan in a flexible fashion. Then execute your strategic plan — but be flexible.
Don’t get so wedded to your strategic plan that you ignore the many insights you will gain during the negotiation.
An unlimited number of variables exist in almost any negotiation, and negotiations can and do take unpredictable twists and turns Learn what the best have done and what the research suggests will most effectively help you achieve your goals.
Take advantage of these twists and turns by periodically re-examining and refreshing your strategic plan.
• Don’t ignore your strategic gut. If you’ve done your research, developed your strategic plan, flexibly begun to implement that plan, and your next move is unclear and/or your instincts tell you not follow your plan, take those instincts seriously.
But before you go with your instincts, examine why your instinct says to do X even though your plan suggests you should do Y. Examine your underlying assumptions and try to pin down the reasons for your feeling.
You might just find that your instinct is based on a multitude of factors that you had — up to that point — only subconsciously considered. If so, be conscious about them and incorporate them into your strategic plan.
And if you still can’t understand why, strongly consider going with your instincts. To me, if you’ve largely transitioned from instinctive to strategic negotiating — and taking the above steps will do it — your instincts will then be based on many strategic principles.
In that case, at the end of the day, I usually recommend that my clients go with their instincts.
Or, as I like to call it at that point, they should go with their strategic gut.
Published December 2, 2005 The Business Journal