Negotiation Refresher
In a brief article in the December issue of CFO magazine, Alix Stuart provides a reminder of how to build trust in a negotiation and, failing that, how to handle a negotiation despite a lack of trust.Most of the advice Stuart cites is based on conversation with Deepak Malhotra, a professor in the Negotiations, Organizations, and Markets Unit at the Harvard Business School. Malhotra is co-author with Max Bazerman, also a professor at HBS, of Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond, published this year by the HBS Press.
The first piece of advice is something I've heard from more than one expert salesperson: You can facilitate arriving at a win-win outcome by being a bit of a chameleon. For instance, adjust your speaking style and body english to approximate those of the other party. If the other person crosses her legs, cross your own legs. If she uses a breezy speaking style, move in the direction of comparable informality.
Another recommendation is to take it easy when drawing up the contract. Malhotra's research indicates that "using overly detailed contracts to seal a deal can lead to a less secure relationship over time." Malhotra explains, "If we have a contract that's very binding, every time you do something good, I'm more likely to attribute it to the contract, not to you being a nice person or caring about me."
The better approach is to accept that some details can be left unspecified, and/or to make certain contract provisions non-binding, especially at the beginning of the relationship. This approach allows leeway for building trust as the parties work out details in light of circumstances that emerge as their joint efforts proceed.
If you find yourself negotiating with someone whom you don't entirely trust, Malhotra's advice is adopt the tack of "asking very focused questions and looking for answers that sidestep them."
If you think that the other party is too optimistic about what he'll be able to do — e.g., he projects a very aggressive rate of growth for his business — you can build a contingency into your contract that stipulates sharing of the risk that the projection may not pan out.
The final piece of advice from Malhotra is one I'm particularly partial to: "Don't let the numbers speak for themselves. [Instead] go the extra step and make sure you explain your intentions." By doing this, you clarify your interests for the other party, and you set a tone of openness and straight talk.
Labels: Negotiation, Risk management
posted by Karen Nelson @ 11:23 PM
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