Keep Your Eye on the Prize
Effective negotiation skills are an integral part of being a capable leader.
From everyday business decisions to gaining the respect of your coworkers, negotiation is a critical factor in determining the success of a company. Business negotiation strategies include a bevy of complex tactics, but new research suggests that there is one simple tool that ensures you have the competitive edge.
As it turns out, there is a psychological predisposition to negotiation tactics, with most people falling into one of two categories: either promotion-focused or prevention-focused. Someone who is promotion-focused tends to be more direct, keeps sight of their goals, and doesn’t anticipate negative outcomes. A negotiator who is prevention-focused tends to be more worried about the potential loss of the deal and will settle for a less-advantageous agreement.
Research has shown that these different mentalities can significantly alter the outcomes of negotiations.
One study showed that prevention-focused individuals paid an average of 12 percent more for the same items than promotion-focused people. It may not sound like much, but in that particular study the settling price cost the prevention-focused folks $3 million. Luckily, there are a few easy steps that will help you become more promotion-focused in your negotiations.
The first step in any negotiation is knowing where you stand.
Promotion-focused people take time beforehand to decide what the best and worst-case scenarios are so they can decide when it’s time to walk away. Once you’ve decided the margin of the negotiation, the space between your best and worst case outcome, you have some latitude for discussion. The key is to then focus only on your desired outcome. Try to banish all thoughts of failure or loss because they increase your anxiety and may rush you into making a bad deal.
Once you’ve decided what you want to accomplish the next step is a strong opening bid. In business negotiations this is a fine line because you want to offer something just outside of your ideal parameters with the knowledge that their counter-offer will most likely bring the deal into your acceptable range. Again, you want to acknowledge that your opening bid will rarely be accepted immediately. Anticipate this and focus on getting the most out of the process.
It’s important to keep in mind that most negotiations can be a win-win situation.
Strive to be an ethical but promotion-focused, and you too will be a world-class negotiator.
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