Negotiations: Basics

negotiation-basicsFrom a general perspective, negotiation is a previous process designed to communicate interest in getting something before the transaction takes place. While the term is mostly used in professional environments, we are constantly entering into negotiations every day, including in our personal life. For both professional and personal views, it is essential to know the dynamics occurred in the process to reach the best possible outcome.

A negotiation is an agreement made by two or more parties that has been reached after a wise and efficient process, which will not damage the relationship between the parties (Getting to Yes, Robert Fisher & William Ury). The method to reach the agreement depends on our attitude and practice. In fact, negotiations are conducted by people (at least, for now...); therefore, we can see similar patterns and a high burden of emotions going on any of the process. Next points are basic to increase the chances of reaching a successful agreement – in the way defined before.

1. Previous arguments. Before the proposal is put on the table, we must present a starting justification, which explains how we came up with the proposal we are going to throw. If we just make our proposal but no explanation is made, we might be perceived as a negotiator with lack of criteria and, consequently, harming the probabilities of success.

2. "Who propose first, propose harder". It is better to make the first offer than waiting the other to open the discussion. The reasoning behind this is the "anchoring effect", which is based on the observation that people making decisions are influenced by initial starting offer. This is true as long as the offer sound reasonable and has been properly justified, as mentioned before.

3. Do not bargain over position, but over interests. Usually, people negotiate based on positions that change over the course of the negotiation based on the reactions from the other party. It is common to see how parties enter in a sequential process of concession-making based on the degree of receptiveness from the other party (for example, this could be the bargaining strategy in street kiosk in local markets). A good negotiator must be able to communicate their own interests as well as detect the other party's interests in order to reach the agreement in an efficient way.

4. Separate the problem from the people. It is important to differentiate between the negotiated issue (the object) and the people in front of us (the subjects). When agreement is not reached we usually blame the other party's attitude; while the other party's strategy and attitude might be one reason for fail, the whole negotiation process is more efficient if we treat people as such (that is, gentile, polite, tolerant, and so forth) and focus on resolving the substance of the problem.

5. Flexible negotiations and alternatives. We must assume that negotiations are a subjective process, as pointed before. As such, our interests cannot be static; instead we have to prepare a range of possible outcomes and a list of alternatives that can facilitate the discussion and close the deal.

Based on these tips, we deduct that a negotiation involves a considerable amount of time and effort done before the process takes place. Many people believe that negotiations are just a win-lose game in which they have to get everything or nothing. They merely trust in their intuition and hope the process going well; however, we must be aware that the bargaining process starts before meeting the other party, and finishes after the deal. 70% of the time devoted to negotiations must be used preparing it (research, designing strategies, list of alternatives, etc.),whereas 10% is used in the negotiation itself, and 20% is the time dedicated to formalize the agreement and act according to the terms.

Last but not least, we must not forget that do not reach an agreement may be a perfect valid outcome from a bargaining process and, in many cases, it is even "the best possible agreement".