+Scott Watson

Friday, 15 May 2009

Don't Get Too Excited Too Soon - You Could Lose Out

Negotiation is a wonderful thing. When two or more human beings agree to speak openly, honestly and with everyone's best interests in mind, it can lead to an abundance of authentic, collaborative problem-solving and genuinely win-win relationships can be developed.

Using a car purchase as an analogy, have a think about the following scenario:

Car dealers are having a really tough time and you decide that it's time to make the purchase for your new vehicle. But, as you already know that the car sales industry is on it's last legs, at least for the forseeable future, you decide that you are in a very powerful negotiating position. You think, 'He will want to sell me the car more than I want to buy it'. A rather innocent, yet possibly misguided view perhaps?

The brand new, shiny, sexy looking car will bring you adulation, a few 'wows' from colleagues and friends the first time they see you in it. But remember, you only ever get one 'wow' from anyone - and the cars value has already lost a few thousand pounds within seconds - not minutes of your purchase. Watch out, there are more shocks to come!

The car is priced at £20,000. It's the very car you had set your heart on. But you already know, the dealer doesn't really expect you to pay £20,000. They've gone up in order to come down in price. This is the negotiation about to commence.

But, with your insider knowledge of the car market, you decide to be really cheeky, even a little mischievous and offer over the telephone a paltry £14,000 or it's no deal. Your expectation is that the dealer will return with a counter offer which will reach somewhere in the region of splitting the deal 50/50. You expect it, the phone rings and it's the dealer.

As you are the lucky customer this week and they appreciate your business, they have decided to accept your offer of £14,000 for the car (which retails at £20,000 remember). Tell me, what are your first thoughts about their acceptance - without a fight?

  1. I could have done better.
  2. I should have started with a lower offer.
  3. What's wrong with the car because they gave in too quickly/easily?
  4. Ouch - how do I get a lower price without appearing too greedy?
  5. Something else???

What you didn't know, and the dealer wasn't about to tell you was this. Their profit doesn't only come from the profit made on each car, it is also generated from the volume of cars sold each month. They don't even have to sell all of their stock at a profit, they can sell one or two at a loss or break-even. And because you didn't know this, your initial negotiating power has all but disappeared.

When there is a high level of trust in a relationship, both parties are often willing to negotiating a genuinely win-win deal. A deal where the seller can still make a profit and where the buyer can know or at least expect that their needs and wants will be taken care of as agreed. When there is low trust, it's everyone for themselves - self-serving, self-defeating attitudes, behaviour and communication. See my previous article about buying a car and relating the tactics back to the workplace.

The moral of this story for the workplace? Don't get excited too soon, remain calm and seek to understand as much of the detail as possible. Always keep a win-win mentality very much in mind, help set a context so that all parties can negotiate openly and honestly to achieve what needs to be achieved and to deliver what needs to be delivered - to the standards required. Get the best deal you can, but not at the expense of losing trust and causing toxic relationships.

The long-term challenges faced by nationals of Northern Ireland were eventually progressed because the concept of win-win, letting go of the past upset/anger and resentment and focusing on how to negotiate for the future benefit of its people won over blaming each other and living in the past. Remember, the good thing about the past is, it's over. The bad thing about the future is, many people just expect it to be something other than brilliant. It's that very thought that stops it from being as wonderful as it can be.

How are the levels of collaboration and trust in your team? What steps can you take to improve relationships so that when you do need to negotiate, the relationship is solid and based on mutual respect and integrity? Do share.

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