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
The negotiators are also made up of you. If you are having a facade, remove it. 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?
Once you have answered that and are aware of your own goals, approach, and attitude, proceeds next to being aware of the other person. If you can get information on individual backgrounds, that can prove to be an excellent channel to the significance placed on the issues and the level of expertise on the subject. As the process starts, you should observe, listen, and learn. A good approach is to keep the beginning friendly and relaxed, yet professional.
Know the Level of Authority – Since 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. When you have the authority to make an agreement, always endeavor to negotiate with a person who has the same level of authority.
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. Explicit issues might not come up at this time, because the parties are just starting to explore each other’s wants and needs. 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. The process of effective listening is as critical to successful negotiation as the art of effective speaking. Communication must be a two-way street or it’s not communication. If only you speak, it is talking, lecturing, preaching, scolding—but it is not negotiating. As Dr. Stephen Covey notes, highly effective people “seek first to understand, then to be understood.”
It is normally a good idea to make the initial statements positive and agreeable. This is no time for anger or competition. An environment of cooperation and mutual trust is ideal at this stage.
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. In fact, as the process begins, issues that need discussion and possible resolution must come out for the negotiation to be successful.
Combining or Splitting Issues – Often issues are multi-layered, so the solution to one is interlinked with the solution to another. For example, “I will not agree to buy the pre-owned vehicle at that price, unless a free one-year warranty is included.” On the other hand, there might also be an endeavor to split issues to make them mutually exclusive. 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. As mentioned earlier, a skilled negotiator will learn the issues closely before negotiations begin to determine where advantages may lie in separating or combining issues. Once the negotiators have determined the issues, they must begin dealing with them systematically. Views differ about whether to begin with a minor or major issue. Some feel you should start negotiation with a minor issue that has the scope of being easily resolved because this will create a constructive climate for additional agreements. Others feel it is better if you start with a major issue, because unless you solve it suitably, the other issues are insignificant. The stance of the parties and their personal styles will determine how the topics will unfold
Step 4: Revealing Disagreement and Conflict
Once the issues have been defined, differences and conflict often will take place. This is commonplace, and you should expect it. Good negotiators never try to evade this stage because they understand that this process of give 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. Conflict has the means of bringing out diverse points of view and crystallizing the real wants and needs of the negotiators. Try to look at conflict as commonplace, even necessary, for clarification.
Wants vs. Needs – When showcasing the issues, most negotiators will describe what they want. “Wants” symbolize positions and are often based on opinions. It is the job of the other negotiator to find out what the person needs, or will find satisfactory. “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. As noted earlier, approaching the negotiation with a view toward satisfying needs, rather than toward “I win; you lose,” creates far greater potential for success. When opposing wants are revealed, it can feel like confrontation. This confrontation can involve stress. It is important to remember, therefore, that conflict resolution under these circumstances is not a test of power but an opportunity to reveal what people need. Understanding this leads to discovering areas where you can agree or collaborate. Try to think of conflict as opportunity.
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. A good negotiator can expand several possibilities that will give way to a good result. Statements reflecting 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. Too quick an attempt to pin something down may cause the other party to withdraw because the climate may not seem enabling to giving and getting. If both sides begin to see a way that the solution can be win-win, they can reduce the negotiating distance, quite quickly. This requires each of you to evaluate the options and then select the one that works best for you while also allowing the other side to win something (i.e., meet their minimum needs).
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. Finding the satisfactory alternative requires efficient communication. Both parties must communicate their ideas and positions in a way that paves way to receiving and understanding. You can communicate effectively only when you learn to listen effectively. Also, be aware that when you listen, you are not automatically hearing what is being said, but instead what your own filter tells you is being said. By feeding back what you think you hear, you increase exponentially the chances for successful communication and can relay that to the other party. Sometimes, you can find a successful alternative if one or both parties look for additional information or get an expert opinion.
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.
