Must-reads
- Never Split the Difference: Negotiating as if Your Life Depended on It by Chris Voss
- Influence: The Psychology of Persuasion by Robert B. Cialdini
Being able to negotiate well and fair is a skill that is applicable to more in life than just your job or sales. You can negotiate while buying a sweater, you are negotiating with your children on when and where to play, you are negotiating with your friends where you should have dinner. The first insight is to realise negotiation is a part of many areas of your life. The second revelation is that most things are negotiable, even if you think they’re not.
People often refrain from negotiating as they’re not combative enough, not aggressive enough. They will describe a negotiation as a battle to win, a you-against-me situation, which will validate their avoidant view. A good negotiator realises the winning strategy is to think in terms of win-win situations, a removal of the term ‘against’ and moving towards a ‘we’ feeling. Instead of internally considering “How much can I take from you?” start openly discussing “What do you have that I need and what can I provide to you?” Make sure both of you get your needs fulfilled and feel happy with the outcome of the negotiation.
Preparation is an important step before the actual negotiation. The more information you have about the other party and about their needs and intentions, the better you can move along the spectrum of your wants. Try to understand as much as possible about the underlying problem you can solve for them, and spend time during negotiation to correct any misconceptions about this problem.
In a career situation where you discuss salary, consider not just the salary itself but also other bargaining chips such as paid time off, paid commute, the ability to bring your dog to work, the ability to work while commuting to save time. As I read a lot of books, I negotiated a yearly book budget when the salary increase reached its limit. Think in terms of what you need and what the company needs and don’t feel rude to introduce these needs into the negotiation.
You can do practise rounds before the real negotiation. Ask friends to help you prepare your interview and salary negotiation. Return the favour whenever that friend asks you for a play preparation.
Negotiations don’t always have to be successful, you can often walk away. This is not always the case. If you are jobless and have no backup savings, you will need to accept the job and have less room to deny low salary offers. You have a better position in a negotiation if you are able to walk away. When you either currently have a job or have savings that will last you a few months, you have more bargaining room simply by having the option of not agreeing and continuing your search for a job elsewhere.
When no agreement can be reached during a negotiation, both parties have to resort to a backup plan. This plan is your best alternative to a negotiated agreement. First, you have to consider all your alternatives should a negotiation fail. Then, value and rank these alternative options. From here, you take your best alternative and calculate your reservation value. This is the lowest-value deal you’re willing to accept during the negotiation. If the deal would dive under this threshold, it is better to cancel the deal and go to your next best alternative. Considering your best alternative to the negotiation helps you find the bare minimum you’re willing to accept and makes you more confident in your willingness to walk away.
Sometimes unsuccessful negotiations can have a negative effect on the course of your relationship with that person. You can negotiate with people that you will see more often in your life and with whom you would like to have a good relationship. Be aware whether a good relationship is worth more to you than getting more out of the negotiation.