Business Negotiation Methodology

A Negotiation Expert Answered:

Business negotiation consists of sequential phases, events and activities. Its not just a face to face conversation as is usually believed. Fortunately a Business Negotiation Methodology or Framework can boost your chances of achieving consistent business negotiation success. Complex business negotiations require a significant amount of work. We would like to share some the top level of our Negotiation Methodology, which when followed, can increase your chances of achieving your negotiation goals. These steps are:

1. Negotiation Preparation
2. Negotiation Engagement
3. Negotiation Review

Preparation is a core element of any business negotiation methodology. Even if we negotiate with the same customer or partner for years, keep in mind that there is a reason for doing this; there are interests and needs that must be served. Your task as negotiator is to identify these needs, whilst being mindful of the fact that needs and interests may well change from time to time. A methodological preparation helps to give shape to the structure of your negotiation strategy and tactics. There are some important questions you need ask yourself like "What is the goal of negotiation... what are the issues... how important is each issue to you and to the other side?" Most people make a common mistake by planning how they are going to get "there", not even knowing where they want to get to.

When referring to the negotiation goals, it is very important to understand the role of the desired substantive outcomes and their impact on interpersonal relations. Every deal, every negotiation has future consequences and through strong relationships, we are able to manage some of them. The most fundamental aspect of Negotiation Methodology's Preparation cycle is an identification of your BATNA (Best Alternative To a Negotiated Agreement or simply Best Alternative). The BATNA is your indicator of how far you can move with your concessions, and how much you will allow your counterpart to benefit from the deal and relationship. It is your "Walk Away" point. When using your Best Alternative, always remember to give the other side an opportunity to get back to you with a better offer, and always let them have the opportunity to "save face". Another part of your negotiation methodology preparation is an agenda, which will help you to track progress and manage the use of time-oriented tactics by your counterpart during negotiation.

Before entering any negotiation, it is important to create a proper climate and establish rapport. A common dilemma is the question of whether to share information freely and openly, or to disclose only what is necessary. Research done in the USA shows that by sharing information with the other party we are more likely to build trust and in fact positively impact the quality of our relationship and future benefits. Whatever negotiation methodology you choose implement, be credible and trustworthy, as negotiation is a reciprocal process.

Your Trading Plan or concession strategy needs to be well developed in order to manage your resources wisely. Debriefing every meeting is a very important part of your negotiation methodology to ensure consistency with your planned strategy, tactics and concession strategy.