Negotiation techniques

What advice can you give on the development of appropriate negotiating skills? Negotiation has been defined as “a process for resolving conflict between two or more parties whereby both or all modify their demands to achieve a mutually acceptable compromise”. We all negotiate and spend a lot of time doing it. The general practice surveyor is no exception and negotiating effectively is probably one of the more important skills we need to acquire. Yet negotiating is something which rarely, if ever, appears in the formal training of the estate surveyor. This is possibly a result of the assumption that negotiating is a skill that can develop only with practice and experience. There is nothing more daunting for the inexperienced practitioner to be faced across the negotiating table by the “man and boy” type intent on using his position to intimidate. However, even the raw new recruit need not fear this situation if a number of simple principles are adhered to. Power The parties in any negotiation will have varying degrees of power, but that power can never be absolute. If power were absolute there would be no need to negotiate! Power is in the eye of the beholder. It is a state of mind, and you have as much power as you think you have. If you perceive your position to be weak you will almost certainly achieve a poor settlement and this will equally be the result if you perceive your opponent’s position to be strong. It is of vital importance, therefore, to be aware of the various sources of power. Legitimacy is a vital source of power. If you can support what you are saying about a client’s inability to pay more than a particular price by producing some documentary proof — a letter for example — you are far more likely to convince your opposite number that you mean what you say. A second important source of power is knowledge. It goes without saying that your knowledge of your own position should be complete. Anything less will clearly place you in a very weak position, but you should also pick up information about the other person’s position by listening carefully to what he has to say and trying to determine what really underlies his position. Price In the context of negotiations between surveyors it is inevitable that price is central to most discussion: yet price is probably the most over-rated aspect in negotiation and to imagine this to be the only, or even the most important, part of the negotiating package is to miss out on most of the available opportunities to achieve a successful deal. The real skill is to look beyond price to identify those things which underlie the final figure and are probably even more significant in determining how the parties to a negotiated settlement will regard the agreement they reach. Karrass(1) calls these “The satisfiers” — they are the elements which are important to a particular negotiator and are equally, if not more, important than price. He identifies the following: Competence Avoidance of risk and trouble Looking good Avoiding unnecessary work Getting it over with Wanting to be considered fair and nice Adding to knowledge Help in making hard decisions Need for good explanations. Broadly speaking, any negotiator will feel satisfied with a deal which makes him appear competent among his fellows or one which will enable him to go back to his senior partner and provide him with a good explanation as to why he has settled at a figure which might, in the absence of that explanation, appear to be too high. We all like to be considered fair and reasonable; if a settlement allows this particular satisfaction then we will feel more willing to accept it. To offer your opposite number the opportunity to avoid unnecessary work or risk may well prove to be more important than being able to buy at the lowest possible price. So in all negotiations it is necessary to be aware of what particular satisfiers are likely to be important. Tactics Remember that the opposition will always object to your valuation, if only because that is what they are meant to do. They are likely to attempt all manner of tactical approaches to achieve this. With all tactics the art is to recognise them as such. They can then be isolated and countered. Commonly used tactics will include statements such as: “There is nothing wrong with your valuation, but my client just cannot afford to pay more” — a clear attempt to get you to cut back your position which does not depend upon the technical merits of the case. It does at least provide some information on what he is prepared to do and, once recognised as a tactic, can be probed further just to see how legitimate such a position really is. A more aggressive tactical posture results in statements like: “You’ve got to do better than that” or “That’s my final offer, take it or leave it”. In some cases this approach might border on the abusive in an attempt to undermine your position, but almost invariably these “final” positions will themselves prove to be negotiable. Other commonly used tactics include “escalation” and “nibbling”, that little push for something extra or something off. Recognising these and other approaches as tactics will put things into perspective — miss the tactic and you will almost certainly concede unnecessarily. Time The use of time is probably one of the more important skills to develop. I have encountered valuers quite prepared to sit behind a desk and say nothing at all for several minutes at a time. This could be very unnerving unless you were aware of what was going on and although such an approach is undoubtedly extreme and easy to counter (although not much gets said by either party), it does illustrate how time can be used to advantage. Taking time enables you to realise the sources of your power and to spot tactics. Do not be afraid of those long silences, you may be drawn into giving information away. In negotiation, patience is a virtue. You will often be presented with deadlines, real or artificial. Recognise that the introduction of a deadline is often the use of time to force action. Karrass talks about the negotiator’s “Bill of Rights”: The right to be wrong The right to be indecisive The right to ask questions The right to be annoyingly persistent The right to be silent. Nobody can expect to be right all the time. Mistakes will inevitably be made. If you do make an error, come clean. It will almost certainly be found out eventually and you minimise the damage by owning up. It is often necessary to be indecisive. You may genuinely need to refer back to your client or senior partner. Do not be bullied into making decisions you may regret later after reflection. Do not be afraid of asking the questions you need to get the information you want, even if they may appear impertinent or personal. Your opposite number is not forced to answer them. Be persistent, even to the point of being annoying. If your opponent is being evasive keep plugging away until you get the information you want. Finally, do not be afraid of being silent. One of the fundamental faults of inexperienced negotiators is saying too much and revealing more of their position than they should. Managing negotiations Kennedy Benson & McMillan(2) identify a step by step approach to the sound management of negotiations and in their research of different situations have found this to be applicable to many types of negotiation. The first, and arguably the most important of these steps, is preparation. Poor preparation prior to negotiation will often force you into a position where you can react only to issues and situations which arise, thus increasing the power and confidence of the other side. Know your own business and decide in advance what you want out of the negotiation, but also discover as much as possible about your opponent’s business, aspirations and circumstances. The second step in the negotiating process is the argument itself. For obvious reasons this tends to be the most recognisable part. An argument should be a detailed exploration of the issues. It should, at all times, be positive and constructive and you should be prepared to listen to what the other party has to say. Like so many of the skills required by the general practitioner, negotiation is largely a matter of communication. Your opposite number is not an enemy, see him as an adversary and you reduce communication. Hostility has no place in long-term negotiations. It may work to your advantage on the first occasion, but thereafter will only serve to damage the relationship so that all future negotiations are seen as an opportunity to get even. The aim of all negotiations should be a better deal for both parties. Look upon negotiation as farming a relationship, not hunting. A complex process of bargaining will tend to follow the arguments put forward by either side. If agreement is to be reached a willingness to move from the initial position must be signalled, but where movement is indicated this should always be subject to qualification. When qualifying a statement of position, state the qualification first and if you are offering a concession do not offer it without requiring something in return — “If you would be prepared to reduce the initial rent by 10%, I would be prepared to consider the possibility of a rent review after five years rather than seven”. Above all do not imagine that by making unqualified concessions you will encourage reciprocation; this will usually be seen as a reward for intransigence and will only encourage further “digging in” in the hope that you will be forced to concede even further. You cannot negotiate arguments, only propositions. A proposition is an offer which moves from the initial position, but it needs to be made tentatively to establish whether or not the other party is prepared to respond. Propositions can then be exchanged or bargained until a point is reached where one or other party is prepared to move towards closing the deal. The purpose of closing is to lead towards agreement. Closure might be approached by offering a further, final concession or it might simply be performed by summarising the arguments and propositions to date. Obviously timing is all important: if the closing move is made too early it will not lead to agreement and may have the effect of creating a more deeply entrenched position; if made too late it may result in too much being conceded. If the closing manoeuvre does, however, lead to agreement, do not forget to summarise precisely what has been agreed and agree the summary. A simple point, but one which will ensure absolute clarity on both sides thus avoiding any later problems. References (1) Karras G, Negotiate to Close Fontana 1987 (2) Kennedy G, Benson J & McMillan J. Managing Negotiations Hutchinson 1984