Friday, January 11, 2013

Small Business - What sort of negotiator are you?

  • Negotiation is an every-day skill     

small business negotiation
Negotiation is a skill that you likely apply almost every day throughout the different parts of your life. Whether you do so consciously or effectively is quite another question however.

For example, at home you might negotiate with your spouse, partner or flatmate about the division of chores around the house. Or perhaps you might at times negotiate about which restaurant you will go to for dinner, or which movie you'll go and see together. Or where you might go on your next holiday.

In running your small business, you might negotiate with a customer over when their work will be completed . Or you might seek to negotiate with one of your suppliers over a bigger price discount for a volume order. Or you might be required to negotiate with one of your employees over when they can take their annual leave.

So,what do we mean when we refer to  negotiation? ....... Well, one definition is that "negotiation is a process of communication in which 2 or more parties seek to resolve their differences and come to an agreement"

  • Are you a combative or collaborative negotiator?

Different people  adopt very different methods in the way they approach negotiation.

There are some people who view negotiation as a competition which they want to win - whatever the cost. They are simply concerned with their own goals and requirements - and show little genuine interest in the needs and concerns of the other party. They will readily apply pressure and threats, and seek to push you into a deal that offers far more advantages to them. You can recognise this type because they often seem to do more talking than listening. The combative negotiator has their focus on achieving their own outcomes, and care very little for the relationship. They often adopt a "take it or leave it" approach when they feel they've got the upper hand.

Most people are reluctant to willingly interact with the combative negotiator. It is an aggressive style that tends to trigger defensiveness in others

And yet there are other people who approach negotiation in a much more co-operative manner. They want to find a solution that is regarded as a fair one by both themselves and the other party. They can be readily recognised by .....
  1. the careful way in which they listen to the other person,
  2. the insightful questions they ask in an attempt to uncover the interests and underlying motivation of the other party
  3. the emphasis they place on the common goals and interests that are shared with the other person
  4. their lack of fear and the lateral thinking they apply to generate and explore options
The collaborative negotiator is still seeking an outcome that will meet their needs and priorities - but at the same time have a regard for the future relationship with the other party. They place a value upon the goodwill factor and are open to considering all ideas that offer a win-win opportunity.

  • Negotiation is about give and take

One of the keys to effective negotiation is knowing when to be flexible and be willing to move on an issue, rather than maintaining a rigid position. However moving doesn't mean you have to concede and give-in - instead it means seeing if concessions can be reciprocated. In other words, seeking a "quid pro quo" from the other party in exchange for your concession. The language that is used here becomes "I will agree to ...... if you are willing to ...."

So you might say to your spouse that you're prepared to accept their choice of restaurant if they're willing to go later to the movie of your choice.

Or when managing your small business, you might say to your customer who is seeking a discount, that you could agree to it if they increase the volume of their order. Or you offer your supplier better payment terms if they can deliver more quickly. Or you indicate to your employee who is seeking a pay-rise that if they are able to generate a certain sustainable level of increase in sales then you could agree to their request.

An agreement will occur when each party feels they are gaining something that they perceive to be of greater value than what they are being asked to give.

  • But what if you're not comfortable with negotiation?

If  you view negotiation as "haggling" and not something that you feel particularly comfortable with, then what can you do? Well, for a start look for low-risk opportunities to practice, Opportunities that will allow you to experiment, to try out some different behaviours and to push your comfort zone.

And just as important can be changing the way you view negotiation. A negative perspective to negotiation may be contributing to your unease. It does not need to be an argument, nor does there need to be conflict. Instead, view negotiation as a discussion in which options and possibilities are explored. Both parties can benefit when this is handled in a positive manner.

Really, there is never any harm as a consumer in asking the question, "Can you do any better for cash?" ..... Or to ask another person "What would it take for you to agree to .....?"

  • In closing
Improving your negotiating effectiveness can offer many potential benefits to your small business. Better outcomes can be achieved when you are dealing with your customers, suppliers and employees.

Copyright 2013. Brian Carroll is the founder of Performance Development - a corporate training company based in Melbourne that delivers management courses, leadership training and interview coaching