The art of negotiation has been highly regarded across all sectors of life and is a skill that increases the value of both you as an individual and the parties that you negotiate for. Having a high negotiation ability allows you to secure favorable deals and positions, settle potentially damaging disputes and resolve internal conflict constructively. Nowadays, negotiation is increasingly being recognised as a core competency, and many companies develop their own approaches and methodologies in this field.

There are some fundamental principles that must be unpacked when it comes to negotiation. Whilst there is a perception that negotiation is a natural skill, it must be understood that negotiation process is largely mechanical and rational. Although intuition and empathy are crucial in enhancing your position, acting from a purely emotional standpoint is a dangerous strategy and can often lead to you not being able to gain superior results.

What successful negotiation requires more than anything is a robust strategy that incorporates systematic processes, such as recognising dilemmas, masterful due diligence, identifying interests and setting clear interests. Once this framework is established, it is easier to incorporate creativity into the negotiation process using skills such as empathy and intuition, whilst also avoiding the plethora of traps that the negotiator will occasionally encounter.

Myths
There are many myths associated with negotiation, chief of which is the idea that there must be winners and losers. You should think about solving problems and creating opportunities rather than winning or losing: if you are confrontational, you are likely to have a fight on your hands. And if you “win” there will necessarily be a loser, with whom you may have to work in the months to come.

This fixed viewpoint leads to the creation of many other myths. This includes the idea that negotiation is an innate ability which only certain people have, alluding to the idea of winners and losers. This idea can also cause you to behave aggressively with little empathy or flexibility which can cause more harm than good. This aggression can also lead you to chase haphazard opportunities with little benefit.

To be a successful negotiator, you have to feel psychologically comfortable in any situation. This means being able to tolerate uncertainty, deal with unexpected behaviour, take measured risks, and make decisions based on incomplete information. This is all based on recognising negotiation processes and structures, which can be developed over time.

The true negotiation dilemmas
There are five negotiation dilemmas that must be taken into account when preparing to negotiate:

STRATEGY VS OPPORTUNITY DILEMMA: Sometimes unexpected opportunities can arise in negotiation – it is up to you to decide whether these opportunities help to achieve your objectives.

HONESTY DILEMMA: Being honest is important, but not to the point where a counterparty is able to take advantage of you – striking a balance is essential.

EMPATHY DILEMMA: Developing empathy with the other party may stop you from acting assertively when required – maintain good relationships but protect your own interests too.

TRUST DILEMMA: You need to be able to trust the other party, but again you put yourself at risk of being taken advantage of – invest in building trust, albeit with measured caution.

COMPETE VS COOPERATE DILEMMA: When negotiating, you will be competing for the benefits on the table, but you must be able to cooperate with the other party to create more.

Preparing for these five dilemmas beforehand can give you an advantage at the negotiating table and the ability to maintain flexibility. In order to do this, there are several things you must need to agree with yourself beforehand in order to have a solid foundation to negotiate from.

Objectives
Setting your objectives and limits beforehand is absolutely essential in any negotiation. You should always go to the negotiating table knowing why you want to negotiate a deal, how this deal will create value, what your “deal breakers” are and what are you willing to compromise on.

Objectives should be set as high as possible whilst still being realistic. Some might temper their objectives in order to “win” the negotiation. However, in doing so, you will almost always achieve even lower than what was intended, as negotiation inevitably involves some form of compromise.

If clear objectives are not set beforehand, there is also a big danger you could get trapped in an “escalation of commitment”, or an irrational urge to “win” the negotiation at all costs. This occurs when you refuse to give up your pursuit of a negative course of action when the wiser choice would be to cut your losses and move on. As a result, you give up far more than you intended to at the start.

The importance of having set objectives are clear. It provides you with a purpose for entering the negotiations in the first place, protects you from a wide variety of traps and gives you a base to compete for the benefits as well as potentially cooperate with the other party to achieve more. Without clear and defined objectives, the negotiation process becomes aimless and arbitrary.

Researching your counterparts and thinking strategically
Furthermore, it is important to understand the issues and interests of the other party before you start the negotiations; as much as you need to identify your own objectives, it is just as crucial to identify your counterpart’s key issues and interests. You will need to assess what their own deal breakers are, and where they might be willing to concede.

You should assess whether it is you or your counterparts that holds the power. There may be power in different areas and this is something you will need to evaluate. For example, your counterpart might have significant power in terms of resources, but they might be a poor negotiator. Analysing these strengths and weaknesses will allow you to tailor your strategy effectively.

Their level of information, their expertise, their desperation to strike a deal, their options beyond the negotiating table, the time on their hands – all of these factors and more can swing the pendulum in your favour and it is important to obtain as much of this information as possible to better inform your overall strategy and to provide you with more flexibility as the negotiation proceeds.

You should also ensure that your negotiating strategy and behaviour reflects the other party’s situation and approach. In many instances, parties are free to leave or join the negotiating table as they wish. In other cases, however, the parties are bonded together, both short- and long-term, and cannot simply walk away. Your strategy should always reflect this.

Your negotiation style
Finally, you should establish your style. There are three types of negotiation style: distributive, integrative, and mixed-motive. Negotiators that mainly use the distributive style view negotiations as a competitive sport, a zero-sum game with a winner and a loser. They compete fiercely for the distribution of the outcomes (the size of the pie) and engage in value-claiming behaviour.

This creates a win-lose Manichean outlook which we discussed earlier in the article. This leads to dismissing the value of building relationships and trust as native; excessive demands and the use of threats to obtain concessions; and exaggerating the value of the small concessions they make. This style can be viewed as aggressive, overbearing and even hostile depending on the context.

However, proponents of the integrative style believe that the size of the pie is not fixed and that the negotiation rewards can be increased i.e. value creating as opposed to value claiming. This style integrates the needs of all negotiators, where time is spent in building relationships and nurturing trust, sharing information openly, and being collaborative and creative where possible.

In reality, the true nature of effective negotiations is often mixed, requiring a mixture of cooperative and competitive tactics. Oftentimes, value can be created through cooperation and creativity, but this value can be fought for at a later stage in the negotiation process. It is up to the negotiator to decide which method will be more profitable and conducive to their goals in that moment.

There may come across a situation where your counterpart is unwilling to part from a zero-sum strategy. In this scenario, it is essential that you protect your own interests first. If you respond with toughness in kind, it likely to produce to sub-optimal outcomes. Rather, you should first attempt to convince your counterpart that their style is not conducive to productive negotiations. If all else fails, it is not out of the question to postpone or abandon negotiations altogether to protect your interests.

This concludes Part 1 of the negotiation articles. Part 2 will focus on negotiation in practice, the techniques one can use and the traps to avoid.