Negotiation is a skill that is as old as time, and as relevant for business use as it is for our personal use. According to the Cambridge English Dictionary, negotiation is defined as the process of discussing something with someone to reach an agreement with them. It can be used to secure a multi-million-dollar deal, get your child to do his/her homework or make a purchase at a market. Even though negotiation is an essential skill, most people are not natural-born negotiators. Research has shown that it can be acquired through education, preparation, and practice.
The Seven Elements framework designed by members of the Harvard Negotiation Project describes seven (7) elements that constitute every negotiation process. These are Interests, Legitimacy, Relationships, Alternatives and BATNA, Options, Commitments, and Communication.
These are the drivers of negotiations. They are the reasons both parties are involved in a discussion and are usually hidden and unspoken. It is critical to determine the other party’s interests to allow yourself to plan your offering to cover their interest. That way, you gain their attention and still attain your goal.
This element speaks to the need to avoid being cheated or feeling like you got the lower end of a deal. Simply put, it is important to enter negotiations with a win-win mentality as opposed to a win-lose where you are only concerned about what you will get from the deal. When one party feels like they are being taken advantage of, they are more likely to decline any offer, so conducting negotiations fairly is key.
Creating a relationship link between yourself and the other party could be the difference between getting an offer or losing it. Therefore, it is crucial to conduct as much research as you can on the other party and attempt to build your pitch around connections you have identified, as it creates a sense of comfort. In situations where you cannot conduct research, observations and listening prove useful in identifying possible connections that can be utilised.
4. Alternatives and BATNA
The saying “Don’t put all your eggs in one basket” comes to mind under this element. For every negotiation you are involved in, you should have alternatives or your best alternative to a negotiated agreement (BATNA) in case the negotiation does not work. This way, you can walk out of any deal that does not benefit you with little or no worries.
Put a lot of planning into your negotiations. Consider all possibilities, contingencies, and conditions that you will be faced with during the process. For your negotiation to be effective, it is important to leave room for alternative options during your decision-making process. Hence, when making a bid, aim for the lower spectrum to allow room for the prices to adjust to an amount that benefits both parties.
Once an agreement has been made, it is necessary to ensure it can be evidenced in the form of a witnessed verbal statement or written document. Once a commitment has been made, you are done negotiating. Always work to end the conversation swiftly once a favourable agreement has been made, to avoid any changes.
Your choice of communication can either make or break your negotiation. Your tone, manner and attentiveness are all critical when talking to the other party. You should know when to be silent to allow for pondering, when to be firm and when to threaten or acquiesce. These skills can only be developed through continuous practice and trial and error.
The world today requires strong negotiation skills. Even though you may not be a natural negotiator, you can take the first steps towards it by applying these seven (7) elements during all your negotiations and slowly notice a positive shift in your negotiation skills.