Carolynn is a popular speaker & thought leader in business who has coached hundreds of entrepreneurs from $0 to $5MM in annual revenue and been featured in Forbes, Wall Street Journal, New York Times, TEDx, and White House Business Council, among many others.
Seems like every time you turn around in business, there’s another negotiation happening: pay rates for your staff, pricing with customers, contracts & proposals in the sales cycle, term sheets and loan terms with investors and lenders, who pays for shipping and what the turn around time will be for product manufacturing. All of these scenarios require us to engage in negotiation, and based on our values and skills and the character and skills of those we are negotiating with, we can find ourselves holding the short end of the stick if we’re not careful.
Fair and effective negotiation relies on the assumption that we all deserve to be treated with respect; and that resolving a negotiation effectively (not necessarily quickly, but effectively) is better than coming to no beneficial outcome, or worse, dragging things on for months and years (and then coming to no beneficial outcome).
To be fair negotiators, we can start by deciding that we should get our essential criteria met, and some or as much of our ideal criteria as we can; and that whatever the outcome for our negotiating party, they should at the very least have an opportunity to advocate for their essential criteria and to make a case to get some or as much of their ideal criteria met, too. In an economic transaction, it’s OK in my book for both parties to win, and if we win “more,” even better. In a personal transaction, I’d probably aim for equanimity as often as possible and less for a “take as much as I can” stance. But all’s fair in love and economics, right?
Well, not exactly. And here’s why. The very people we are negotiating with today, we may or probably will negotiate with tomorrow. If we aim for our win ignoring their loss they’ll remember how they felt after the deal was secured: lousy. And customers, staff, vendors, investors and lenders who feel lousy after doing business with you will quickly turn into ex-customers, ex-staff, ex-vendors, ex-investors, and ex-lenders, which is by no means a win scenario for you.
So how can we negotiate fairly– when we should also be aiming to “win” a negotiation– to our economic benefit? Well, we can be straightforward, use respectful language, be honest, follow through, and be a trustworthy negotiating party. Let’s not use the shady tricks of the trade: overpromising/underdelivering; reneging on terms of the deal, failing to communicate or failing to communicate in a timely manner, using information or advantages to deliberately harm another, and failing to pay, pay on time, or pay as agreed, without externalities and proper communication (ie cashflow lagging and calling to re-negotiate payment timeframes/amount). So whereas we should prioritize our interests in a business negotiation we can always consider the other party as an integral part of the negotiation conversation and treat them with respect, honor, and diligence.
What about effectiveness? How does that play a part in negotiations? Well, in simple terms effectiveness, or its partner efficiency, is all about using the least amount of resources to secure an outcome. Sometimes we can wear someone down just by waiting long enough, or asking enough times. But is that always effective? While on one hand, perseverance can be lauded and is essential to the success of a healthy sales pipeline and closing rate, consider the effects of “negative perseverance.” I once read a book about the cluster of traits associated with talented & gifted individuals, and this trait caught my eye. In essence, it refers to a willingness to persevere, even when it is detrimental to continue to do so.
As working women, we need some perseverance. A healthy dose of it, actually. But we also need to know when to let things go. An effective negotiator can read the signs that a deal is going south and that it is in her best interest to cut the conversation, walk away, and let that fish swim by because there are always more opportunities to consider. Effective negotiation also evaluates the cost/benefit of a particular situation or discussion and asks: is it worth it? Is this the best deal I can get at this time and, if so, how can I wrap this up? If not… how can I wrap this up? Some other guiding principles that can help a negotiation get on track, and stay on track, include using direct communication, asking clearly for what you want, identifying your deal-breakers, doing your homework in advance, avoiding negativity, making a business case for why X, Y, Z outcome is desired, consider your dealbreakers and the dealbreakers of your negotiating partner, and only negotiate under fair conditions.
It’s a lot to consider but fortunately, as I mentioned earlier, business provides constant opportunities to negotiate and renegotiate various scenarios. Pick a couple principles from this list and put them into action – write down or reflect on 3-4 negotiations you have going on at present and apply these principles so that you can work your muscles of being a fair and effective communicator. It feels good and negotiating in a fair and effective way makes others feel good too – and that’s something your staff, customers, vendors, lenders and investors will take note of and return again and again to experience.