Negotiation Skills and Techniques

Apart from the laws of demand and supply, contractors need to negotiate effectively to achieve a favourable financial outcome for themselves. Here are some negotiation skills, techniques and strategies to help contractors negotiate more effectively. (This document is reprinted here with the permission of the author, Barbara Braham, of Columbus, Ohio).

1. Know Thyself
When you go into a negotiation, take a personal inventory. How do you feel about negotiation? Do you want to get it over fast? If so, you may give in too quickly, or give away too much. Or, do you want to win, no matter what the cost? If so, you may become adversarial and damage the relationship.

2. Do Your Homework
Know who you're negotiating with before you begin. What's his or her reputation as a negotiator? Win/Win model or Win/Lose model? Does the person want to negotiate with you (Oh Boy!), dread the negotiation (Oh No), or is this a neutral situation (Show Me).

3. Practice Double and Triple Think
It s not enough to know what you want out of negotiation. You also need to anticipate what the other party wants (double think). The smart negotiator also tries to anticipate what the other party thinks you want (triple think).

4. Build Trust
Negotiation is a highly sophisticated form of communication. Without trust, there won't be communication. Instead you'll have manipulation and suspicion masquerading as communication. Be trustworthy. Honor your commitments. Tell the truth. Respect confidences.

5. Develop External Listening
Most people carry on an inner dialogue with themselves. When you're trying to communicate with someone else, this inner dialogue becomes a problem because you can't listen internally and externally at the same time. When you negotiate, turn off your inner voice and only listen externally. You won't miss important nonverbal messages, facial expressions of voice inflections, when you listen externally.

6. Move Beyond Positions
It's risky to make yourself vulnerable to someone. That's why in a negotiation you begin by stating your position. Later, when the trust has deepened, you and the other party can risk more honesty and identify your true interests. As a negotiator, it is your responsibility to ask questions that will uncover the needs or interests of the other party. If you've also done your job of creating a supportive climate, you're more likely to get honest answers.

7. Own Your Power
Don't assume that because the other party has one type of power, e.g. position power, that he or she is all-powerful. That's giving away your power! Balance power by assessing the other parties source(s) of power, and then your own. While there are many sources of power, they all break down into two categories; internal power and external power. The former no one can take away from you and includes your personal power, level of self-esteem, and self-confidence.

External power fluctuates with your situation. If you're laid off or demoted you can lose position power, for example. If new technology is introduced, you can lose your expertise power. Because the dynamics of power are so changeable, a negotiation is never dead. Be patient; the power dynamics may shift.

8. Know Your BATNA
BATNA stands for Best Alternative to A Negotiated Agreement. The acronym comes out of the research on negotiation conducted by the Harvard Negotiation Project. Before you begin a negotiation, know what your options are. Can you walk away from the deal? What other choices do you have? What are the pros and cons of each choice? Don't stop here. Also consider the BATNA of the other party.

9. Know What a Win Is
What is your best case scenario? What is your worst case scenario? The area in between is called your settlement range. If you can reach an agreement within your settlement range, that's a Win! Don't drop below your bottom line; you'll feel bad about yourself and the deal afterwards, and you may not follow-through on your commitments.

10. Enjoy the Process
Negotiation is a process, not an event. There are predictable steps preparation, creating the climate, identifying interests, and selecting outcomes that you will go through in any negotiation. With practice, you will gain skill at facilitating each step of the process. As your skill increases, you'll discover that negotiating can be fun.

Copyright © 1999-2001, Barbara Braham, 1143 Neil Avenue, Columbus, Ohio 43201.
Phone: (614) 291-0155.