Negotiation – it’s all about style

we probably all know people who are referred to in the following ways: “she’s a great negotiator; really tough, drives a hard bargain. everyone is intimidated by her” (think margaret thatcher, bob crow or michael o’leary) or “he’s a great negotiator; always looking for the win/win, really creative in his approach. everyone trusts him” (think gorbachev or branson).

as good as these people may be at certain types of negotiation, the only truly great negotiators are the ones who could be described in the following ways: “she’s a great negotiator; she can adapt her style for the circumstances, she knows when to drive a hard bargain and when to create value. in fact she not only knows when to do it, but how to do it…”

you probably don’t know so many of those people.

the fact is that to master negotiation you need to be able to assess the situation and adapt your approach accordingly. there is a time for hard-ball, and a time for creativity, and also a time for true collaboration. some protracted negotiations may even incorporate elements of all 3.

it is not enough to be one-dimensional. it may serve you sometimes, but as often as it gets you a good deal, it will let you down in other deals. if you have a reputation for being one way or the other then the other party will already be building their plan for how they are going to defend themselves or exploit you.

cold negotiations

these negotiations are characterised by the fact that they are price-focussed, short-term in nature, requiring little or no relationship or trust and therefore no need for openness with information. next time you are selling a house or involved in an auction at work (whether that be a formal e-auction or an informal dutch auction), any information that you give to the other party is only likely to be used against you as they drive the price in their favour. any other variables are relatively immaterial. there is little scope for creativity in these negotiations. so if you approach one of these negotiations in a trusting, open, creative mindset, then there is a danger that you will be exploited. for example if they ask you your budget, or your time-scales, the only reason they want to know these things is to use them against you.

you will therefore be best served by displaying colder, less cooperative behaviours in these types of negotiations. this does not mean that you have to be actively uncooperative, difficult or unfair but you have to take care that they will not take advantage of your good nature. do not assume that everyone else shares your ethical values.

cool negotiations

whilst price might still be the most significant factor here, other things are starting to become more important. these other factors could be volume, quality, exclusivity, contract length or timing. so we might be talking about a product launch or an agreement with a new supplier with whom your relationship is just starting. you now have the opportunity to introduce a level of creativity into these negotiations. this means that you can trade some of the other variables against each other as you protect the price, for example. you can only do this if these other variables have real value to one or other of the parties, which is not the case in the cold negotiations.

there is a delicate balance to be achieved here. if you are too closed and price-focussed then you may get a superficially good deal, but will probably have missed out on creating value in other areas. conversely, if you are too open and collaborative with the other party who is not reciprocating your creativity, then you may find yourself being taken advantage of.

warm negotiations

these negotiations are identified by the fact that price is no longer the defining factor. indeed it may not even be present at all, but if it is, then it is simply one of many other factors. for these negotiations to work, you need both parties to be taking a similarly collaborative approach. these negotiations are not about going soft, but they are about working with the other party rather than against them. you should now be interested in how you allow the other party to make more profit from these negotiations as you seek to find or create the truly value-enhancing trades. it is therefore essential that you have high levels of trust and consequently, openness. this is why you need to have a very different style when preparing for and executing these more complex types of negotiation. the relationship is now key, and these types of negotiations can only truly be achieved when the relationship is warm and trusting.

whatever the type of negotiation, it is crucial that you assess the factors in advance of the negotiation and adapt your approach and strategy accordingly (if you need help with this bit – let us know).