Before you close a deal, make sure you think thrice
People negotiate every day. But in business, it is critical to success. Negotiations are not a game, they require preparation, patience and crucially, understanding the situation, yourself and your counterpart.
The increasing automation of many parts of modern businesses, with a corresponding increase in impersonal transactions within and between organizations (e.g., online retail sales as a percentage of total retail sales in the UK has risen to a high of 12.5% in the first half of 2015) has somewhat ironically made so called ‘soft’ skills even more valuable in the workplace. Understanding customer and employee needs and crafting solutions that work for them require superior interpersonal and influencing skills in a world where knowledge and expertise is freely available. Also, the widespread availability of information has removed arbitrage opportunities where people could previously make beneficial deals merely by knowing more than their counterparts.
These trends indicate that understanding and deploying effective influencing and negotiating tactics is more important than ever.
London Business School’s Negotiating and Influencing Skills for Senior Managers programme, taught by Gillian Ku and Madan Pillutla, uncovers three key learnings for workplace negotiations and other interactions where you seek to influence people.
1. Know yourself and your counterpart. Your personality type influences your negotiation style and understanding the other's personality type can provide a strategic advantage.
On the programme, we consider how our NEO personality assessment affects the way we negotiate and influence. NEO assesses 30 different facets of our personality, in five main dimensions. For example, a higher neuroticism dimension could make stressful negotiations harder, but it is also easier to read stress levels in other people.
We also analyse videos to read other people’s personalities and therefore how best to negotiate with and influence them. It’s incredible what you can glean from personalities when you pay attention, but it’s not something we spend time doing. For example, one participant realised that a ‘difficult’ colleague was not actually difficult, but had a totally different approach to decision-making. Knowing this beforehand would have prevented the hours of wasted work and frustration in trying to bring around the difficult colleague.
2. Prepare for your specific type of negotiation.
We often step into negotiations without even realising it (e.g., negotiating with an employee, “negotiating” with friends, family, and children). However, business negotiations require proper preparation, and the larger the stakes, the more we need to prepare. In the programme, we discuss different types of negotiation situations and consider the key elements to understand within each of these situations. For instance, preparing and negotiating the price of a company is very different from negotiating a multi-point, multi-year contract with a supplier.
3. Get meaningful feedback. You can't learn negotiation and influence, you can only practice, get feedback, discuss it, practice and get feedback again.
The real world is complex. It’s not always planned and prepared for, and is often loaded with emotional stakes. This realisation is a transformative part of the programme. Day after day, negotiation simulations happen, and feedback is given, both in groups and one-on-one, and with videos of what participants actually (just) did. We see different tactics and personalities play out in the room. And armed with an understanding of these different types, people’s behaviours feel less shocking, less personal, and therefore easier to work with and influence – often for win-win outcomes.