Negotiation is an art that will help you throughout your professional career. We often have to negotiate for our salaries. Sometimes it is done to win over clients. You may also want to negotiate to get key stakeholders on board with your ambitious business plans. In domains like investment banking and law, negotiations are part of daily life.
Wharton Professor Adam Grant discourses negotiation skills in his book ‘Give and Take’. Apparently some of the ideas fly in the face of conventional wisdom but they are backed by solid research and experience.
Here are some proven tips from Professor Grant’s book that will bolster your negotiation skills. However, in order to perfect and master negotiation you will need to undertake negotiation training and practice a lot.
Don’t be reserved
Being wary of sharing information that inhibits trust. We all know from experience that people reciprocate our own attitudes. Some professionals think that holding back your cards is smart but it is in fact counter-productive. The other party will appreciate this token of trust and will open up as a result. Trust is the bedrock of any business deal. With a high level of trust, you can be certain that the other party will be more inclined to strike a deal. Studies show that even sharing unrelated information can create a good impression and improve chances of success. In addition to sharing necessary business information you can share your own ideas, ambitions and even hobbies. The other party may not know you so there is a big void which creates uncertainty. If you fill in this void, you can expect mutual trust.
Aim for the target price. Since this is an ideal scenario and perhaps a little unlikely, you must be flexible and set up a threshold beyond which you will not bid. That’s the reservation price. It is necessary to do a little research and then use figures to get a realistic estimate of what to expect. The research will also put you in a good negotiating position if the other party throws something unreasonable. You can show them the market data to coax them into conceding if they go beyond reasonable limits.
Fire the first shot
It may go against intuition. We are inclined to think that we must hold our hand and let the other party make the first move. This way we can gauge their intentions and make better decisions. But Galinsky and Grant’s research shows that people who make the first move get results closer to their own target. It may be against conventional wisdom but it is the ground reality.
The reason for this is the psychological principle of anchoring: people will work upon whatever is first thrown on the table. Don’t be tempted into thinking that your high price will put off the other party. The axiom ‘you get what you pay for’ is firmly embedded into the human mind. If you start too low the other party will worry about the negatives that forced you to undersell. If you start with a premium the other party will think about the positives that gave you the confidence. To execute this high-level kind of negotiation, you will need to learn from experts with some serious negotiation experience, for which there are negotiation firms out there that teach these skills.
On the back foot? Here is what you should do
The other party may make the first move which is not at all what you had in mind. Don’t retort immediately with a very low offer. Be a little cautious and tactful. Start by saying that this is not what you had in mind. You can offer research statistics to bolster your opinion. Succinctly state the reasons for your polite dissent. Do it as gently as possible with a positive demeanor. This will be much better than an abrupt and brusque dissent.