With the right attitude and approach, negotiations can be made smoother for all the parties involved in the bargaining process.

Negotiating an agreement mutually acceptable to both parties involved is never an easy thing. When two sides sit down at the bargaining table, they’re putting something on the line, be it concessions or sensitive information.

However, the process can be made smoother if the bargaining parties approach it with the right attitude and accurate information.

“First and foremost, come to the discussions well armed with raw material and market data,” Supply Excellence advises for (re)negotiating supplier contracts.

Knowledge gives you strength, so research the subject of the negotiation. Distinguish fact from fiction by verifying data before accepting a statement as true. Having and presenting specific data justifies your request and gives you a fighting chance.

Also, realize that talks may hit a seemingly insurmountable impasse. It can happen to even the most skilled negotiators.

“If you recognize that you’ve reached this point, see if you can give in to the other side on their issue in exchange for an unrelated point that is relatively more important to you,” Anthony Tjan, founder and CEO of the venture capital firm Cue Ball, writes at Harvard Business Review.

Being a good negotiator entails identifying a second-choice desired outcome or a fallback position, so do not enter a negotiation with only one agreeable result in mind.

“Although negotiation takes place every day, it is not easy to do well,” bestselling authors Roger Fisher and William L. Ury say in the introduction to their now-classic Getting to Yes: Negotiating Agreement Without Giving In. “Standard strategies for negotiation often leave people dissatisfied, worn out or alienated — and frequently all three.”

Getting to Yes is a guide to negotiating using a method developed at the Harvard Negotiation Project called “principled negotiations.” This technique can be used in virtually any negotiation.

“Every negotiation is different, but the basic elements do not change,” Fisher and Ury state.

The following are four basic concepts rooted in a common-sense approach to effective, principled negotiation. If both parties apply these rules, each will be better off negotiating mutually acceptable agreements:

1. Separate the people from the problem. Realize that your strong feelings reflect the issue’s importance, but limit the emotional content of your negotiation. Think of the person you’re talking to as your partner and the problem you’re trying to solve as an object. If you’ve put forth your best effort and secured at least your fallback outcome, then you should enjoy a sense of contentment.
2. Focus on interests, not positions. Negotiators can sometimes hold fast to a position while forgetting what the main goal is. Yet bargaining for stated positions will not necessarily fulfill the interests that led you to adopt the position in the first place. Look beyond each party’s position into the underlying interests and you will discover a creative solution.
3. Invent options for mutual gain. Examine each other’s interests to create mutually beneficial options. There are usually numerous ways to achieve both parties’ goals, but you have to be creative and understanding of the other party’s interests. Start generating options that may strike you as otherwise unlikely, impossible or even ridiculous. Brainstorming will let both sides be creative as well as gain ground toward an agreeable result.
4. Insist on using objective criteria. Use of objective criteria helps remove the emotion from the discussion and allows both parties to use reason and logic. Let go of personal standards in favor of objective ones, upon which both parties can agree. Consider these objective criteria: traditional practices; market value; legal or business precedent; scientific judgments (patents); efficiency; and reciprocity.

Finally, know when and how to walk away. Compromise is crucial in negotiating, but, as Tjan writes, “the über golden rule of negotiation is to always let someone else walk away. Whether you drive too hard a bargain, cannot reconcile on key terms or feel that the deal is just too rich for your blood, make the offer you want and let the other side walk if they don’t want it.”

Earlier

Recommended Reading: Getting to Yes

Modify the Fine Print: Contract Renegotiations

12 Ways to Keep Negotiations Rolling

6 Keys to Gaining Trust in Negotiations

Resources

Getting to Yes: Negotiating Agreement Without Giving In
by Roger Fisher and William L. Ury
Penguin Group (USA), January 1991

Strategies for Renegotiating Contracts in a “Buyer’s Market”
by Mike Petro
Supply Excellence, Jan. 23, 2009

Four Rules for Effective Negotiations
by Anthony Tjan
Harvard Business Review blog, July 28, 2009

The Fine Art of Negotiating
Religious Conference Manager, Dec. 1, 2006

5 Common Negotiating Mistakes and How You can Avoid Them
Program on Negotiation at Harvard Law School, 2009

Renegotiation Success: Upgrading Your Outsourcing Relationship
Alsbridge plc

Renegotiating Outsourcing Contracts: Play Hard Ball or Win-Win?
Deloitte, April 9, 2010

In This Economy, Everything’s (Re)Negotiable
by Robert Jones
Entrepreneur, March 31, 2009

Manufacturers Detail Recession Survival Strategies in New Survey
American Welding Society, Fabricators & Manufacturers Association Int’l, Society of Manufacturing Engineers and Precision Metalforming Association, Sept. 3, 2009