The ability to negotiate effectively is one of the more useful skill sets in building a great company. Very often negotiating success translates directly into entrepreneurial success.
There are many different approaches to negotiation. Which approach works best for you depends on your personality, your goals, and the circumstances. While there are many ways to categorize negotiation strategies, there are two that often stand out.
One of them is working 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 you possibly can. This approach can certainly be effective, short-term—especially if you don’t expect to negotiate with a particular party ever again, or don’t expect to negotiate much at all going forward.
On the other hand, if you’re focusing on the long game, you can attempt to 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 are 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,
“It’s essential to understand what each side needs to accomplish and wants to accomplish. 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 as well. While this sometimes appears daunting, it’s almost always doable.”
In order to get exceptional results as a negotiator consistently over time, 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 must uncover and advocate for ways to achieve compromises, so that each side gets what’s essential—and likely a whole lot more.
The two keys to discovering what matters to people are using powerful open-ended questions and being empathetic.
The very 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, objectives, biases, and decision-making process. Powerful questions will enable you to obtain necessary information, ensure the other side understands terms and issues as you do, and help identify what matters most.
Powerful questions, when used constructively, are quite useful in moving the negotiation process forward.
In addition to asking powerful questions, you need to make sure the other side knows you understand their perspectives and positions. They have to 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’re able to communicate that you understand the other side’s position as well as the logic of their position.
Using powerful questions and being empathetic is effective in enabling you to determine what the other side needs and wants. It will permit you to see where the lines in the sand are drawn.
Couple this with knowing your objectives, and you’re in the best position possible to find areas of overlap and form 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 even 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.
