Harrison Ford starred in the classic movie, Raiders of the Lost Ark. Bill Murray and Scarlett Johansson starred in Lost in Translation. Richard Dreyfuss played the lead in Lost in Yonkers. The television show Lost in Space ran from 1965-68. And entrepreneurs star every day in the Lost Art of Negotiation. Why is negotiation a lost art? I believe that too many of us see negotiating as a competition.
Google gives 90,500,000 results for the word negotiation so there’s no shortage of material about the subject. But I don’t want to focus on negotiating techniques – that’s not the point of this blog. Instead, I’d like to offer some ideas that may be helpful in making the negotiating process more productive.
If we start with the premise in a negotiation that we want to win, then it becomes a competition where someone (not us) is going to lose. From here we harden into our “positions” and the tension begins. There is a better way. First, we need to see a negotiation as an opportunity to solve a problem. It’s actually a dual problem – one for us and one for another party. Trying to solve just our problem may be far more difficult than figuring out how to solve for both parties. What do we do when we solve a problem? We start by clearly defining all elements of the problem. Then we catalog all of the possible solutions. Our innovation and creativity come into play at this point.
In the process of attacking the problem we establish our bedrock principles. For example we may resolve that no matter what, we will always be respectful. Perhaps we commit to avoid getting hung up on personalities. Or we may decide that regardless of how dirty the other party may play, our approach will continually reflect total integrity. Ultimately our analysis leads us to the bottom line for the most critical factors to the outcome we believe will best solve the problem for both parties.
Recently I was coaching a business owner about the potential sale of her company. I asked her what her bottom line number was and she gave me a figure. Then I asked her if negotiations led to a value that was $50,000 less than her bottom line number, would she sell. She replied in the affirmative. So we went back and forth with the $50,000 question until we finally reached an amount that she absolutely positively would not accept. The takeaway for her was that the initial figure she thought was her bottom line number actually wasn’t.
As we engage in a negotiation we listen to and understand what the other party is telling us. This information is then overlaid onto the problem we have identified and our array of solutions is applied. We avoid confrontation by working from a set of facts; seek agreement wherever possible, and constantly narrow the scope of issues.
Being in the commercial real estate business I’ve been in continuous negotiations in one form or another for more than 40 years. You can read all the books you want and watch all the videos in the world on negotiating strategies. And if you pay attention to them you can easily end up getting too cutesy. I have found that a pretty straightforward approach has been extremely successful for me. I don’t try to outthink the other party or construct a series of chess-like moves. Instead, I know what my bottom line is and I know the principles that I want to maintain. If I have to violate my principles to get to my bottom line I’ll withdraw. And I’ve learned that transparency and respect have been more valuable than anything else.
Entering a negotiation as a creative opportunity to solve a problem for both parties puts us on the same path. Bedrock principles and a clear understanding of our bottom line is then the recipe for a positive outcome.
This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.