Life is full of negotiations. It could be over television time for children, an extension on a project deadline or your salary.
Everybody should learn the art of negotiation as it’s become even more critical in these times.
Many struggle to acquire the skill of negotiation. The good news is it’s a skill you can acquire with some effort.
Negotiation is a way for two or more parties with opposing interests to get the best possible deal acceptable to all. Negotiation isn’t a way to win and make the other party lose but a way to make sure everyone benefits from the negotiated agreement.
Here are the basic steps to successful negotiation:
The first step is to clearly know what you want. Let’s say you’re negotiating the price of a used car. You’ve saved Rs 8 lakh for it, but ideally only want to spend Rs 5 lakhs. This 5 lakhs is your target value or ideal outcome from a negotiation. You’re also willing to spend up to Rs 8 lakhs, but no more. This becomes your BATNA or the Best Alternative To A Negotiated Agreement. Every time you enter a negotiation, you should have a clear idea about your target value and your BATNA.
The next step is to research the other parties in the negotiation. Apart from knowing your target value and BATNA but theirs as well. This happens through communication.
The third step is to decide your negotiation style. Any negotiation has a few standard approaches.
Avoidance: This is when you’d rather not negotiate because you’re afraid to get into an argument. So you avoid negotiation and end up in a lose-lose outcome.
Competition: This is when you enter a negotiation with the aim to win while making the other party lose. Here your focus is solely on yourself, making it a win-lose outcome.
Accommodation: This happens when you hate conflict and accept a losing agreement only to avoid a dispute.
Compromise: This happens when all parties agree to meet each other half-way. Everybody gains and loses something.
Collaboration: You focus on both yourself and others, allowing you to reach the best possible agreement without either party losing out.
It might seem like compromise is a good approach, but it leads to a less than ideal outcome for all parties. Instead, you should focus on collaboration which ensures everyone gets what they want.
The fourth step is to always make the first offer. It might seem like a good idea to let the other party approach you with a demand first before you counter. But in negotiations, the person making the first offer gains an edge. This is because the first offer anchors the final settlement.
With this, you’re ready to tackle any negotiation that comes your way!
(This article was first published in Kalvi Malar.)
To learn more about the art of negotiating, check out this podcast on Habits Matter, a podcast about habits at work hosted by Shreyasi Singh, Founder and CEO of Harappa Education
Vrinda Prahladka is a graduate of the University of Southern California and the London School of Economics. A senior curriculum specialist at Harappa Education, her claim to fame is that she’s met the Kardashians!
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