Five types of negotiation skills, ranging from deal set-up to defensive moves, can help you organize an effective broad-scale approach to your most important business negotiations. By Katie Shonk, Harvard Law School Program on Negotiation.
Business people who are looking for effective negotiation strategies often confront a dizzying array of advice. It can be useful to take a step back and categorize these strategies into various types of negotiation tactics. Highlighting the benefits of negotiation in business, the following five types of negotiation tactics can help you think more broadly about how to get a great deal.
- Set-up tactics. Well before they sit down at the table, negotiators typically make a number of decisions, small and large, that can have a dramatic effect on how their talks unfold. One of the most important questions to ask is whom you should negotiating with to meet your goals. Look beyond your final target: You might make the most progress by negotiating first with people who can influence him or her. Another key question is whether to negotiate online (via email, videoconferencing, or text messages), on the telephone, or in person-or a combination of all of these formats. Meeting in person is often ideal, but other communication media have their advantages. When meeting in person, should you meet at your office or theirs? Meeting at your place may be most comfortable, but traveling shows your commitment and allows for valuable information gathering.
- Value-creating tactics. People often view negotiation as a win-lose enterprise, but in most situations, a win-win mindset will lead to better results. Adding issues to the discussion is often the key to value creation and a great deal. For example, in a corporate negotiation about a merger, in addition to discussing valuation and price, parties can discuss personnel issues, headquarters location, long-term strategic plans, and so on. Then explore tradeoffs based on each party’s preferences. Other promising value-creation strategies include asking lots of questions to learn about what matters to your counterpart and sharing information about your own interests and priorities.
- Value-claiming tactics. Taking a collaborative approach to negotiation doesn’t negate the importance of claiming a fair share of the value you’ve jointly created. Effective value claiming should be based on a thorough analysis of what you want out of the negotiation as well as what the other party wants. Be sure to spend time thinking about your BATNA, or best alternative to a negotiated agreement-what you’ll do if you fail to reach your goals in the current negotiation-and try to discover what your counterpart’s BATNA might be as well. Negotiators often find they can effectively claim value by making an ambitious first offer, but you’ll need to have a solid sense of the bargaining zone. Research shows that the person who makes the first offer often anchors the negotiation to their advantage.
- Persuasion tactics. In negotiation, how you present your proposals can influence your counterpart at least as much as what those proposals include. How you frame information affects whether your counterpart views your offer as a promising or disappointing, and whether they’ll want to deal with you over the long term. One proven persuasion tactic is to make several offers simultaneously rather than just presenting one offer. Be sure that you value each offer equally so you won’t be disappointed by the other party’s choice. There are a number of other persuasion techniques you can use in negotiation, such as drawing on the power of silence, presenting a draft agreement, and looking for ways to get your foot in the door.
- Defensive tactics. It would be nice if negotiation were always just a matter of two reasonable people using negotiating techniques and skills as they work patiently toward agreement, but we often hit roadblocks anyway. When we encounter deceptive tactics in negotiation, threats, and other unethical or hard bargaining moves, we need to have some defensive tactics ready to deploy. To some extent, we can avoid the need to play defense by taking time to get to know the other party and try to trust before getting down to business. If any red flags pop up, take a break to research your suspicions and weigh carefully whether to proceed. At the negotiating table, effective defensive tactics include explicitly agreeing upfront to behave in an honest, forthright manner; conveying that you have a strong BATNA; and making your counterpart aware of your connections to their organization and social network.