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February 22, 2009
Why do we negotiate?
Is it our avarice and greed that compels us to try to best our fellow man or woman? It it the need to win? What is it in some of our psyches that motivates the quest to size the upper hand, to compel obedience, to prevail?
Negotiation stems not from avarice and greed but from our primal instinct to survive and thrive.
Man, alone and on his own, would fend of other men and scrounge for roots and berries while looking for the hapless female to take back to his cave. His negotiations were against his environment to see it though the night and, if fortunate, to seed a child. Life was simple if short-lived.
Those fortunate enough to find unprotected females soon learned the challenges of heading up small clans. Gathered around a small fire our ancient ancestors would find ways to work together to share the tasks of protecting and providing for their small clan and, most important, growing it. The size of the clan gave it the strength to find more food, work together to fell larger beasts and generally survive yet another night.
As clans grew and became more numerous, clans started to interact. The result was initially conflict based as they fought one another out of fear and distrust protecting their turf and their women and children. The currency of these negotiations was rather basic: death or life. Victory was clear.
In spite of their attempts to kill all outsiders who threatened them, eventually clans began to merge and learned to get along with each other. Civilization was sprung and these new entities did what....carried on the same habits as the original clans. They feared and distrusted other feudal states and tribes and did their best to eradicate any who came into their arena of influence. But commerce did emerge in spite of their baser instincts.
Times have not changed a lot. Be it 21st century nation-states or vast religions spanning the world, fear and distrust are the sentiments that prevail. But the incentives that drive those feelings are based on the need to provide and protect. So there is a balance of good and evil at play.
We negotiate to preserve the value of what we have achieved. In the dawn of man's existence the clan that learned how to raise and harvest produce sought to trade it for what they needed in a fashion that they benefited as much as possible from the exchange. Bartering quickly gave way to negotiating when the concept of currency was introduced. Currency gave a standard of value to be applied universally. Now barterers has the ability to try to increase the value of their labor by getting more currency for their product than bartering it for the neighbor's pig.
But currency is not the root of negotiating. It is only the measure. Currency is not solely monetary. Currency can be in the form of product, services, coinage or even promises of future action. Currency, in a negotiation, can be as illusive as good will.
Currency is what the negotiators decide it is and is unique to the negotiation at hand. In any negotiation, understanding the many dynamics of the currency at play is essential in the creation of value from the exchange. To negotiate properly one must consider all aspects of the situation and leverage those commodities to his or her advantage.
Properly done, the outcome will be far better than simply accepting the pig for three bags of potatoes.
Posted by Bill at 9:02 AM
February 14, 2009
Six Basic Negotiating Tips
The First Tip Never discuss settlement terms until the end of the process, when both parties are committed to trying to resolve the situation. Before discussing the meaty terms of a settlement get to know each other, find out what you can about possible competitors, learn as much as possible about the issue at hand, determine if this is really what you need or want, wait until they indicate that they really want or need to settle.
The Second Tip The purpose of negotiating is to discover the term parameters of the other person. You want to know the most the other person will pay for something or the least they are willing to sell for so you can couch your initial offer or response to strategically position your offer or proposal.
The Third Tip Try to get the other person to make the first offer or proposal. Knowing how to bracket your response will let you move the final outcome toward your goal. But the starting point is a critical step in getting there. Manipulating the other person into making the opening proposal allows you to set the parameters of the negotiation to your advantage.
The Fourth Tip Prepare before meeting by considering why you are negotiating, what you expect to gain, why that is important to you, and what you expect to have to offer. If you fully understand your needs and wants you will be able to quickly determine if continuing a negotiation is worth your time.
The Fifth Tip Test the market before sitting down. Get comparables, talk with others, and establish reasonable parameters for the negotiation . The key to a successful negotiation is keeping your proposals and counters within a range of reasonableness. Do not undermine your credibility by appearing ill-informed or overly aggressive.
The Sixth Tip Be aware when it is time to bring the negotiation to a close. Don’t let the discussion drag on as the other person may lose interest, patience or the desire to commit. Over negotiating often kills deals or agreements that should have been made.
Posted by Bill at 9:34 AM