The world is a complicated, diverse place with conflicting views and limited resources. As a result, we're all constantly in negotiation with each other, even in things as simple as where to go out to eat, how to gracefully pass someone traveling in the opposite direction down a narrow entrance hallway, and how to split the bill at the end.
In business, negotiations are complicated and important, so what might be second-nature in another context should become a subject of careful consideration. At the same time, consider the other side of that coin: we're all already experienced negotiators because we do it every day without thinking about it. Learning to be great at negotiation is about realizing and leveraging what you know, while supplementing it with what may be new skills articulated below.
The basics
A few basic rules to get us started:
- Communicate. Listen and learn first.
- Expand the pie before dividing it up.
- It's not necessarily adversarial; things that are cheap to me may be valuable to you, and vice versa.
- Share what's important but don't put a price on it.
- Negotiation is cultural
Let's look at each of these in more detail.
1. Communicate first, negotiate second
At a high level, negotiation is just communication. The most hyper-distilled, high-stakes, refined form of it. Therefore, that's where we start: by being a good communicator generally. And communication means making a genuine connection. It's not just a science; try to connect with them and everything else will go easier.
As with design, good negotiation starts with learning. Your goal should be to determine what the other party wants and, ideally, how much they're willing to pay for it. The latter part there is always the operative one—we all want as much as we can have; but we all have a price we're willing to pay to get it.
Try to determine about the other person:
- What do they want?
- If multiple things (and it usually is), what's the relative order of importance of what they want?
- Why do they want it? What about these things is important to them?
Combine this with the other half of the equation: what you want, in what order, and why. Don't evaluate these adversarially yet; just recognize where everyone is coming from.
Use the same skills you may have developed in the context of design research interviewing, including asking non-leading questions.
Good negotiations can also benefit from the same active listening skills you might use in other parts of life, like making "I" statements, emotion labeling, and mirroring. Try having this emotion wheel in mind to help disambiguate and label feelings, sentiments, and underlying motivations.
There are more advanced techniques to establish rapport as well. One that I find particularly interesting is the research that the FBI's High-Value Interrogation Group publishes on conducting effective interviews in the high-stakes, potentially adversarial context of criminal interrogations. Scroll to the bottom of that PDF to the color wheels they have and notice how they've developed a system to compliment the demeanor and energy of the subject. For example, in the case where the detainee is "Passive and Resentful" the interrogator might be "Supportive and Conversational". Note how hard it can be to do some of these, like to react to aggression with kindness and warmth. It takes active, intellectual effort to do. Obviously business negotiations are not the same as interrogating terrorists (the FBI HIG's mission) but the principles are still illustrative that there's a ton to learn from a wide array of sources about how to most effectively engage people in what might be adversarial environments.
Pro tip: My negotiation teacher would like to say, "Superman will tell you everything but where the Kryptonite is." Pay as much or more attention to what they don't say; it's often more interesting than what they do.
Lastly, pay attention to when you negotiate. Things like time during the year, day of the week, and even time of day can have a surprisingly big impact. For example, people are often financially conservative around April (tax time) as paying a tax bill can be on people's mind. People tend to be unwilling to take risks right before the holiday season. And a 2011 study found that the time of day, particularly whether it's before or after lunch, has a big impact on whether a prison inmate is granted parole.
If told something isn't negotiable, consider the element of time. Ask, "when will it be negotiable?" Often things being negotiable or not depends on when you ask.
2. Expand the pie
A common mistake people make in negotiation is adopting a scarcity mindset. This is natural and understandable since negotiations are often about arbitrating control over something that is, or at least feels, finite. But trust me; even in situations where it seems to be, it often isn't as finite as it may initially seem.
While a key resource may be finite—say, money to pay someone—others may not be as limited, such as a lofty title. Consider the full breadth of what both parties can offer before trying to segment it.
Save difficult discussions for later in the conversation. Expand the pie first, talking about the easy stuff, before worrying about dividing it up. Then, conversations about dividing it up are relatively easy and you can discuss in real values, not hypotheticals.
3. Avoid making things unnecessarily adversarial
As discussed a bit above, it can help to create a sense of alignment between yourself and the other party. Look at how hostage negotiators use techniques like referencing a higher power ("I want to help you, but my bosses won't let me unless you release a hostage!") to diffuse the hostage-taker's perception that the negotiator is not on their side.
The same applies to business situations: emphasize your interest in creating not just a win-win, but a single, mutual win because you're both on the same side. Similarly. to avoid the perception of haggling, try framing money questions or issues as questions or comments about values ("I know we both care a lot about this project and want to see it get the resources it needs to be successful. My interest, just like yours, is collaboratively finding what that should be" or "I'd really like to accept this job, but this compensation number makes that not possible for me").
It can help unstick things by putting things in sales terms, as a trade rather than a tradeoff: "If I agreed to X, would you agree to Y?". In other cases, it can help to present a bounded (false) dichotomy: "Would you prefer apples or oranges", when negotiating among all kinds of fruits, not just those two.
4. Price isn't universal
One of the biggest things to keep in mind is that things that may be expensive to you may not be to me, and vice versa.
Or consider these other hypotheticals:
- The winner gets $100. The loser gets nothing. (In this case, it may make sense to just trade-off winning each time).
- If I win, I get $5. If you win, you get $500. (Just let them win and divide the $500 between you both).
- The winner gets nothing but the loser's relative dies. (Obviously the downside is so excessive that you should not negotiate at all.
Remember negotiation is about finding a mutually beneficial outcome. Sometimes, that's best achieved by collaborating, not "negotiating".
5. Lastly, negotiation is highly cultural; do your homework
In Germany, people are often a bit reluctant to talk about money and to engage in post-settlement settling because this can feel like haggling, which is not something that the orderly German culture rewards.
In South Korea, where you sit at the table is very important as a measure of social hierarchy.
In Kenya, meetings can't conclude unless everyone has had a chance to weigh in and speak. As a result, meetings often go on well longer than they're expected to, so it's accepted that other meetings may start very late if people aren't in attendance yet.
There's so much more to share here. To be updated and expanded...
