What is Negotiating?
First of all, let’s talk about what Negotiating is. Or even better, what is not: Negotiating is not a set of miraculous words that magically will make you getting all you want.
Negotiating is the process through which two parts harmonize their interests or intentions about a common issue.
Each party should not stand rigidly on its side, waiting for the other to move. That only happens in Schwarzenegger movies (which of course, we love).
Where did we learn how to negotiate?
Through our professional career we have been in several negotiations with unions, banks and hedge funds; some of them ended up successfully, and other ones we would rather forget.
We feel lucky to have had this opportunity of experiencing tough negotiations from inside as an active party.
Now we want to share the knowledge we acquired for guiding your negotiations whether they are business or day a day issues.
Before we start, it is important to highlight one thing:
Best-case scenario, Worst-case scenario
It is absolutely mandatory to start thinking in terms of Best-case and Worst-case scenarios before start negotiating.
Thinking calmly about the different paths you may walk when taking different options is the very key to success in any negotiation.
Be always calm, analyze every option before discarding it and consider all possible outcomes.
4 Essential Rules for Negotiating
Now we’ll explain the 4 main rules you have to follow when starting any negotiation.
- You can use them in your Job or Business… but we recommend employing them in your day a day.
If you learn how to negotiate properly in your day a day, it will be much easier for you to apply this knowledge professionally.
1. First rule: Be sure about what you need
This is very important, and few people do it properly:
- Being sure about your real and deep motivations, not a certain superficial objective.
To make sure you understand it properly, we’ll give different examples of Negotiations, some of them in the same scenario: a Job salary negotiation.
Salary negotiation First Example:
Imagine you are no longer happy with your job. You earn enough money, but you lost the “passion” long time ago.
As usually happens, you don’t really know why aren’t you happy.
- You just feel out of place, lately you don’t want to intervene at the meetings, and everything feels useless for you.
Finally you decide to talk with your boss because you think a salary increase may boost your spirit.
Since you have not thought properly about the real deep problem troubling you, this meeting would be pointless.
- Your boss gives you a salary increase, and a year later, you are exactly in the same miserable position.
- You argue strongly with your boss.
- You don’t get a salary increase
- In your day a day, you feel even worse at your Job because both you don’t like it and you also feel underestimated.
Why is this happening? Because maybe you needed to change your Job position instead of receiving salary increase.
This common situation happens because people generally don’t know what they really need (or want) and start a sterile negotiations.
Maybe if you had talked to your boss, about changing in your functions, he could have offered you another position that would have been more suitable for you.
- You get a new Job position where you love what you do.
- Your boss doesn’t have to pay a salary increase.
- Now, somebody that loves what he does is developing you former tasks.
The worst-case scenario would be just being in the same initial situation. So we have improved our overall chances success.
Everybody could have a better outcome in this scenario.
So, don’t forgive: First of all, you must be sure about the main issue; which is your main deep goal.
- Don’t stick to a certain superficial decision, and meditate deeply about it.
2. Second rule: Tell the truth
This “rule” always shocks to the people.
- We all grew up with Hollywood movies where the smart guy hides information to the bad guys and by doing so he gets what he wants.
This works perfectly, but just on Hollywood movies.
If you are honest about your real purposes, the negotiation will move forward much better and both parts will be able to point out different alternatives.
- You can’t afford a misunderstanding while negotiating.
This doesn’t mean to over-explain how enthusiastic you are for some option.
- In this case, of course, you have to keep your feelings away since feelings and emotions are absolutely forbidden in any negotiation.
If the “other part” smells a positive feeling for something, he will try to get more from the negotiation.
So, tell the truth, but hide your enthusiasm.
Orange negotiation Example
This is a usual example in business schools.
Imagine you work for an orange juice company.
Your suppliers have been increasing the prices, so after looking carefully for new orange sources, you find a Chinese supplier that is giving you a nice price.
Suddenly, before closing the negotiation, the Chinese supplier tells you, there may be another interested company in the oranges you are looking for, so the prices could eventually be increased.
You decide to negotiate with the other company about splitting the amount of oranges, but they need all of them.
After a whole week negotiating with them, finally you start explaining why you need the oranges for, in case both companies could point out some solution together.
The solution immediately appears in front of all of you: they only need the peel.
This case explains perfectly how, sometimes, the solution is just in front of us, but since we tend to think everyone has our same needs, we assume or hide certain things that could be vital for solving a problem.
3. Third rule: Be open to alternatives
Ok. You are now completely sure about the real Issue and can’t wait to start “fighting in a tough negotiation”.
Calm down and again: don’t stick to a single option.
The main goal is always to end up in a better position.
- The usual “either I get what I want or I’ll quit” rarely works.
Before start Negotiating, think again which is your main goal, analyze different alternatives you would be happy with and be open to new suggestions you may receive during the negotiation.
Salary negotiation Second Example
You have been thinking a whole week about why are you feeling “miserable” at your Job and finally you find out that you don’t really like it.
- You took this job because it was the only alternative you had.
But now, the company is growing and the overall economy is much better so maybe it’s time to think about a new job.
- Moreover, after several years working for your company you are tired of everybody.
You will quit.
With this in mind, you talk to your boss being sure you want to quit.
Your boss insists, you cold move to other positions pointing out that the company doesn’t want to lose your talent, but you insist and finally quit.
- You find a new job you love.
- You don’t find any job and finally take one that you also hate.
It seems not that bad since there is a chance you find a nice Job, but it is important to firstly try “squeezing” all your possibilities keeping your worst-case scenario intact.
Since you perceive real interest from your boss, you give them a try, but in other completely different department.
- You find your desired position with better conditions.
- The company maintain all your former “privileges”.
- You don’t like your new position and end up as you were in the beginning.
Again, this “improvement” doesn’t seem pretty important, but it is.
In your Alternative’s Worst-case scenario you would still be able to quit your Job but if your first option is quitting your job, you would never know what would have happened if you had accepted your former company’s offer.
Try always to “squeeze” all the options available and pick the one that leaves more doors open.
4. Fourth rule: Help the other party
This appears to be counter-intuitive. You must always look just for yourself, don’t you?
No. Sometimes, by trying to help the other “party” you may find an alternative solution for your requirements.
As we mentioned before, a negotiation is not standing on your corner and waiting the other party to move on. It is more like a dance, where both parties must get something profitable.
Salary negotiation Third Example
After a deep and cold meditation, you discover that you are not well paid in your job.
- Other companies pay a 10% more to their employees for exactly the same job and responsibilities you have.
All of this came up to you, after you realized you have no time for your kids, your friends and your family.
- You love your job, and no other company could offer you a best position; just a 10% salary increase.
One day, you talk to your boss explaining all of this to him/her: you want a fair salary.
Your boss tells you that they are very happy with you, but lately, the big amount of work has delayed an overall salary update.
You don’t want to hear anything about it and stick to your claim.
- Your boss gives you a 10% salary increase but also more responsibilities.
- You will have to wait to receive a salary increase.
At first glance seems a fair negotiation with pretty good alternatives: your worst-case scenario would be not that bad. Why bothering about getting a better alternative?
When your boss explains to you all the amount of work there is, you get more interested about it and propose a new hiring for developing all the tasks you and your co-workers hate.
Your final proposal could be: reducing your workday in one hour, but earning the same amount of money.
- In case of future work capacity needed, you will be able to increase your workday but only for developing the tasks you love.
- They gain flexibility in their operations with a new approach (probably they didn’t think bout hiring a person for developing tedious tasks nobody liked).
- You get rid of the boring tasks you hate.
- You increase your salary per hour worked.
- If there were an excessive future workload you would have an option of increasing your overall salary by working one hour more a day.
- You would have more daily spare time to spend with your kids, friends and family.
This is just an example of how sometimes; by getting interested about the other party’s standpoint you may find solutions for them that can also unlock interesting options for you.
Closing a Negotiation properly
There are different approaches about how to develop a proper negotiation, but don’t forget about one important thing:
- A good negotiation is that in which you end up reasonably unsatisfied.
It means that you didn’t get everything as you originally claimed, but other different unexpected and successful solutions.
Be open to alternatives, analyze them carefully and look for a solution for both parties.
“Do’s and Don’ts” while negotiating:
- Think always about best-case and worst-case scenarios.
- Find out what are you really looking for; what you really need.
- Be calm and cold when analysing and negotiating.
- Tell the truth about your interests.
- Be open to different alternatives.
- Try to find a solution for the other party.
- Never be a 100% sure about a certain solution: you can be sure about what you need, but not sure about exactly how covering it.
- Leave your feelings home.
- Never show your feelings about a certain position, just your interest.
- Never assume other party’s position in advance: maybe you both can get what you want.
- Never stick to a certain alternative: have at least 3 alternatives in mind.
- Do not be selfish: only by showing interest in the other party’s problem they will trust you.
- Don’t forget anything we just told you.