Skillful negotiating is regularly essential in all aspects of life. This is undoubtedly the case in business. Negotiating effectively is one of the more useful skill sets in building a great company. Very often, negotiation success translates directly into entrepreneurial success.
There are many different approaches to negotiation. The best approach depends on your personality, goals, and circumstances. While several ways to categorize negotiation strategies exist, two often stand out.
You can work to get maximum leverage over the other party. Consequently, you can use your greater position to bludgeon them until they crumble and you get as much as possible. The approach can certainly be effective in the short term, especially if you don’t expect to negotiate with a particular party ever again or don’t expect to negotiate much going forward.
On the other hand, if you’re focusing on the long game, you can ensure that everyone involved in the negotiation gets as much out of the deal as possible by using techniques that reflect each party’s needs and wants. Here, to the extent possible, you’re closing deals where everyone walks away a winner.
According to Frank Carone, chairman of Oaktree Solutions and co-author of Everyone Wins! How You Can Enhance and Optimize Business Relationships Just Like Ultra-Wealthy Entrepreneurs, “Understanding what each side needs and wants to accomplish is essential. You must make sure the crucial elements of your agenda, as well as the other party’s agenda, are met. You need to succeed, but it’s also important for you to help the other side succeed. While this sometimes appears daunting, it’s almost always doable.”
To consistently get exceptional results as a negotiator, you must focus on what each side truly needs to make a deal work and find ways to get those required outcomes. At the same time, you are uncovering and advocating ways to get compromises so each side gets what’s essential and likely a lot more.
The two keys to discovering what matters to people are using powerful open-ended questions and being empathetic.
Powerful Questions
The best negotiators are proficient at soliciting information by strategically using open-ended questions. They can use such questions to help guide the negotiating process. Keep in mind that powerful questions accomplish more than one objective. While questions will get the answers you need, they will also give you insights into a person’s concerns, goals, biases, and decision-making process. Powerful questions will able you to:
- Obtain necessary information
- Ensure the other side understands terms and issues as you do
- Help identify what matters most
When used constructively, powerful questions are useful in moving the negotiation process forward.
Being Empathetic
In addition to asking powerful questions, you must ensure the other side knows you understand their perspectives and positions. They must believe you truly “get” their viewpoints, concerns and limitations.
Being empathetic is both a mindset and a skill set. It’s a way, for instance, to show respect. You’re empathetic when you can communicate that you understand the other side’s position and the logic of their position.
Using powerful questions and empathy is very effective in determining what the other side needs and wants. It will let you see where the lines in the sand are drawn. Couple this with knowing your objectives, you’re in the best position possible to find areas of overlap. Based on these areas of overlap, you are most likely capable of forming a solid foundation for agreements.
“The thought process and skills of great negotiators are quite learnable,” says Carone, “It does, however, take commitment, time, and effort to become proficient. Even those negotiators who are very good today are always refining their thought process and skill set to become ever better.”
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.
