Enigin Advice - How to Negotiate I
Negotiating is a part of business life, sometime with employers/employees and often with clients.
For Enigin Distributors enhancing your negotiating skills is vital - so here from the desk of Enigin Training comes a useful articles from the Stanford Graduate School of Business.
Take these points in an apply them when in negotiations.
Successful bargaining means looking for positives in every possible circumstance. “If I can trade off issues that I care about more and you care about less, then we’ve been able to create value in a transaction,” says Margaret Neale, professor of organizational behavior and director of two Stanford Business School executive education programs in negotiation. “That’s the silver lining.”
Sometimes negotiators fall into traps and leave resources on the table because they can’t see that silver lining. Some common pitfalls are:
Poor planning
Successful negotiators make detailed plans. They know their priorities — and alternatives, should they fail to reach an agreement. You must know your bottom line, your walkaway point. In addition, you need to understand time constraints and know whether this is the only time you will see your opponents in negotiation.
After preparing your own agenda, outline the same for your opponents: What are their preferences, alternatives, and bottom line? Once at the bargaining table, test your hypotheses to determine what the opposition’s priorities really are. Prepare a written goal and analysis sheet for yourself.
Thinking the pie is fixed
Usually it’s not. You may make this common mistake when there is a “congruent issue,” when both parties want the same thing. For example: In the context of an overall negotiation involving salary, bonus, and vacation, the boss wants to transfer a junior manager to San Francisco. The manager is eager for the San Francisco assignment. But frequently, the employee will look at the situation and believe that since the boss gave him a desired promotion the employee must compromise on the transfer location. The employee might actually suggest a transfer to Atlanta. His psychology is: “I can’t expect to get everything I want, so I’ll take the middle.” The boss is ambivalent about the transfer and figures she can get someone else to go to San Francisco. You think it is unlikely an employee in a career negotiation would miss such an obvious opportunity? Neale repeatedly has performed this exercise in her classes and finds that 20 to 35 percent of the students assume it’s a fixed pie and miss an opportunity to get what both parties want.
Failing to pay attention to your opponent
Negotiators need to analyze the biases their opponents bring to the table. How will they evaluate your offers?
One way to get inside your opponent’s head and influence his attitude is to shape the issues for him, a technique called “framing.” If you get your opponent to accept your view of the situation, then you can influence the amount of risk he is willing to take.
For example, you are a purchasing manager renegotiating an hourly wage contract with a subcontractor. The subcontractor currently makes $10 an hour. You are willing to elevate the subcontracting firm to $11 an hour. Another organization recently boosted its rate with your subcontractor to $12 an hour. You know that when the negotiators for your subcontractor hear your $11 offer, they may think they are going to have to give up a dollar an hour.
You must get them to focus on the point you are starting from — $10, not $12. You frame the issue positively by talking about all the ways your contract is different from the others. Your contract has some advantages outside of the hourly pay. The other side will be more willing to risk lower wages for the purported other benefits. A common mistake is negotiating from a negative frame: “The other firm’s deal offers more, but we can afford only $11.”
Look for the rest of the article in the next post.
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