The negotiation process entails definite steps, even though they may flow easily into each other. The following seven simple steps will do very well in implementing an effective negotiation process and will cover all the critical elements of the negotiation process.
Step 1: Getting to know the negotiators
Negotiating is like any other social situation that has a business purpose. It moves more efficiently when the parties take a little time to get to know one another. It is helpful to go through the various stakeholders before the negotiations begin. Naturally, it is critical that you are self-aware. Therefore, your first question must be: Who am I in this negotiation? Am I the tough fighter, the conciliator, the client, the businessperson?
Know the Level of Authority – Since the agreement is the crucial goal of any negotiation, it is imperative to know from the start the level of authority of the party you are negotiating with. In hard negotiations, some sellers will bargain to know your position, and then they notify you that they do not have the authority to accept your terms. Then they go to some other person who may decline any agreements you might make, attempting to leverage a better deal for the seller.
Step 2: Stating Goals and Objectives
Remember that you need to find out your own interests or needs so your discussion can be focused on a goal. Ask yourself what success in the negotiation would look like to you. After the opening, negotiating usually flows into a general statement of goals and objectives by the involved parties. The person who speaks first on the issues may say, for example, “I would like to ensure this agreement works in a way that benefits everyone concerned.” No conditions have been suggested yet, but a positive statement has been made about the aim of the outcome.
Positive Communication – Effective communication and active listening are critical at this stage. The person making the opening statement should then wait for feedback from the other party to understand if both parties have matching goals and objectives. If there are any deviations, now is the time to realize them.
Step 3: Starting the Process
Some negotiations are complex and have many issues to resolve. Others may have only a few. No one can accurately guess the direction negotiations will take until both parties have presented the issues. There may be hidden agenda’s neither party has raised. These will emerge as things move forward.
Combining or Splitting Issues – Often issues are multi-layered, so the solution to one is interlinked with the solution to another. For example, in the sale of a furnished house, the seller may prefer to discuss the house and furnishings as separate negotiations. The buyer may feel they should be combined. In some negotiations, all issues are linked. No one issue is considered resolved until all have been resolved. Views differ about whether, to begin with, a minor or major issue.
Step 4: Revealing Disagreement and Conflict
Once the issues have been defined, differences and conflict often will take place. Good negotiators never try to evade this stage because they understand that this process of giving and take is where lucrative deals are often made. Disagreement and conflict handled properly will ultimately bring the negotiators together. If not handled correctly, they will broaden the differences.
Wants vs. Needs – When showcasing the issues, most negotiators will describe what they want. “Wants” symbolize positions and are often based on opinions.“Needs” represent the resolution minimums and are usually based on data. Remember that few negotiators get all they want, but good negotiators will work to get as much as possible. They understand that give and take may be necessary and that they might need to modify their goals. Here is where your attitude and approach are most important.
Step 5: Narrowing the Gap between Negotiators
Most parties want to sort out differences, especially when something is at stake for them. This holds especially true when negotiating. During the negotiation, normally one party will move toward common ground. Being flexible, within limits, is an influential tool in negotiation. Statements reflecting a willingness to test the waters or send up a trial balloon in the discussions will often begin with phrases like, “Suppose that …?” “What if …?” or “How would you feel about…?” When these statements begin, you should listen carefully to see if they point toward an offer to attempt resolution. Then your response should be carefully stated.
Step 6: Finding Alternatives for Resolution
Sometimes removing substantial gaps in the negotiating distance between the parties requires innovative thinking. In mediation, this is called the “problem solving” or “brainstorming” step. You can use the same tools a mediator uses to help bring parties closer to the common ground by “unfixing” your position. It may mean stepping out of a hard-bargaining (win-lose) model to a more collaborative and creative (win-win) approach. Both parties must communicate their ideas and positions in a way that paves the way to receiving and understanding. You can communicate effectively only when you learn to listen effectively.
Step 7: Agreement in Principle, Settlement, and Acknowledgment
When a consensus is reached, you will need to confirm it. You will need a decision about how the final agreement will be achieved, especially if additional approval is required. This usually means placing the agreed-upon terms in writing. Preferably, this should happen while the parties are together so they can be in accord on the language. Reducing the agreement in principle to some form of writing will reduce the danger of a misapprehension later.
