12:30 AM 27th November 2021
The Art Of Negotiations
Image: EpicTop10.com / Flickr
The business world is full of negotiations and getting it right when negotiating is a critical skill.
In business you can’t achieve very much on your own. Success in business depends on a series of negotiations. You need to negotiate with stakeholders, suppliers and customers.
Success depends on surrounding yourself with the best people and to bring the best on board you need to negotiate.
If you need capital to grow the business, you need to negotiate.
If you want to build supply and the best suppliers, you need to negotiate.
If you want long term customers, guess what, you need to negotiate.
is a process where two or more parties with diverse needs and goals discuss an issue to find a mutually acceptable solution.
Be clear from the outset about what is important.
There’s a great quote by Warren Buffett, one of the most successful investors of all time.
“Price is what you pay, value is what you get”
Effective communication is required to be successful in the business world. Skilled communication can be the difference between success and failure. An important aspect of skilled communication is the ability to negotiate.
In business, negotiation skills are important in both informal day-to-day interactions and formal transactions such as negotiating conditions of sale, lease, service delivery, and other legal contracts.
Good negotiations contribute significantly to business success, as they:
Help you build better relationships
Deliver lasting, quality solutions - rather than poor short-term solutions that do not satisfy the needs of either party
Help you avoid future problems and conflicts.
Negotiating requires give and take. You should aim to create a courteous and constructive interaction that is a win-win for both parties. Ideally a successful negotiation is where you can make concessions that mean little to you, while giving something to the other party that means a lot to them. Your approach should foster goodwill, regardless of the differences in party interests.
A good negotiation leaves each party satisfied and ready to do business with each other again.
Tips for effective negotiation
There are a number of “dos and don’ts.”
Confuse negotiation with confrontation - you should remain calm, professional and patient
Become emotional - remember to stick to the issue, don't make it personal, and avoid becoming angry, hostile or frustrated
Blame the other party if you can´t achieve your desired outcome
Be clear about what you are offering and what you need from the other party
Be prepared - think about what the other party needs from the deal, and take a comprehensive view of the situation
Be consistent with how you present your goals, expectations and objectives
Set guidelines for the discussion and ensure that you and the other party stick to them throughout the entire process
Use effective communication skills including positive body language
Prepare for compromise
Strive for mutually beneficial solutions
Consider whether you should seek legal advice
Ask plenty of questions
Pay attention to detail
Put things in writing
For the future, effective negotiation skills will continue to play a vital and ever-increasing role in the sales process of companies across the world.
In today’s global environment, one which is hyper-connected, decentralised and the centre of increasingly high competition, having effective negotiation skills is an absolute must for successful growth.
The key principle of negotiation is defined as follows:
"Put your client’s interests at the heart of the negotiation process. A client who feels that you are a reasonable partner and one who places the best interest of a client over those of your company, will be far more likely to trust you".
Ian Garner is a retired Fellow of the Chartered Management Institute (FCMI) and a Fellow of the Institute of Directors (FIoD). He is Vice Chair of the Institute of Directors, North Yorkshire Branch. https://www.iod.com/events-community/regions/yorkshire-north-east
He is founder and director at Practical Solutions Management, a strategic consultancy practice and skilled in developing strategy and providing strategic direction, specialising in business growth and leadership.