Negotiation is part of life; there’s really no escaping it. It might be in the merging of two multinational corporations, it might be a couple deciding where to go on a Friday night, it might be a number of other things. Certainly, no business can hope to prosper unless staff who are involved in negotiating have the requisite skills and experience to get the positive result the organisation needs.
Negotiating for a small- to medium-sized business
It can frequently be especially critical for a smaller organisation to get the best possible outcome from any negotiation, as profit margins will most likely be quite narrow; a poorly obtained deal might increase expenditure and/or decrease income to an extent that could place the company’s future in jeopardy. Alternatively, winning a strong position can help the business to make great strides in developing and growing. If you run or are involved with such an organisation, it would surely be foolish to forego the nurturing of negotiation skills, when they can play such a key role in your company’s future.
Let’s take, as an example, a company working in building maintenance in a large urban area. There’s a substantial market, with numerous old residences and the company has a contract for regeneration work with a local council. But there’s also a lot of competition out there and prices have to be kept low enough to make sure that jobs aren’t taken up by rival firms. To this end, the company will have to work closely with suppliers, in order to keep the cost of raw materials and equipment at a manageable level and also with the council itself, to ensure that the contract isn’t allowed to lapse.
Good relations with the council would be imperative under these circumstances, as guaranteeing a regular income would help any enterprise cope with an economic downturn, or prosper and grow when times are better. The council would expect to be working with a contractor that they can trust and to this end, the intention behind all negotiations should be to create and maintain a relationship that is beneficial to both parties. A ‘win-win’ agreement should leave both the company and the council feeling positive about the negotiation and optimistic about future dealings.
Ensuring a ‘win-win’ outcome
If you’re looking for a win-win negotiation, it’s especially important to come prepared. With insufficient groundwork done in advance, it’ll be very difficult to keep the balance needed for a resolution that favours both sides, particularly if you can’t guarantee that your opposite number’s intentions are the same as yours. In the case of the council and the renovator above, much of the bargaining power clearly lies with the former; were the contractor to go into negotiations without planning for how to address the council’s requirements and concerns, they would end up focusing too much on their own side of the deal, and this would damage the atmosphere of trust and mutual co-operation that had been built up previously.
Preparations need to start with an understanding of what both yourselves and the other party will be negotiating for. What do you want to gain, and what do you expect them to want? If they can’t get what they want, is there an alternative they might be presumed to settle for (or vice versa)? Is there anything you can trade within the deal to make a win-win solution more likely?
You can also learn a lot from prior dealings with the other party. What they’ve expected in the past, how well you’ve got on with them, and what may have worked to smooth the path to the results that have maintained that relationship – all these can help inform you on the most productive way to a successful negotiation. It’s worth considering also the consequences of the negotiation – whether you succeed or not, what happens then? How will this develop the relationship between the two parties and will it affect the balance of power? For a lucrative win-win negotiation to grow others for the future, it’s worth assessing all aspects of the process in advance – in the words of Louis Pasteur, chance favours only the prepared mind.
Winning, and keeping on winning
The great benefit of a successful win-win negotiation is that it paves the way for future negotiations, a continuing and profitable relationship and consistent development of the business. A rational, well-thought-out discussion can nurture a relationship of trust between all parties concerned, and it’s this relationship that can bring about the growth and income your business needs. The combination of preparation and negotiating skills can be vital to the development of an organisation, and it would make a great deal of sense to seek out a short training course to help you and your staff in this area and help your business forge prosperous relationships and a brighter future.