Dealmaking is part of of all we do in life

NEWS

Feature Article: "Planning Your Negotiations" by Leigh Harrison

The importance of planning
An executive once told me that where service providers and suppliers most often fall short is in their lack of preparation. She said it is glaringly obvious when they do not know the most basic information about the very company to whom they are pitching.

This may seem like Sales 101, but even the most experienced can get complacent and lazy over the years. Have you ever thought, "We've got this one in the bag", only to be tripped up by something unexpected that just needed a bit of research or forethought?

When we talk negotiation, where the nitty gritty of the deal is being ironed out, then planning is even more important as it holds the key to the balance of power. The more we plan, the more information we gather, and information is power! The more we plan the better we understand the parameters of the deal and its value to us and the other party. The more we plan the more ideas, insight and creativity we develop, the greater our ability to negotiate brilliant deals.

Gathering information
Start your information gathering on the other party (or parties) by asking yourself what you already know about them. You will then need to check that your information is correct and you will need to test your assumptions. This you can do with further research and simply by asking them questions. Your preparation will therefore need to include the questions you want ask.

Now think about yourself. What does the other party know about you? How does this position you in terms of the negotiation? Think about what you want them to know about you. Anticipate what information they will ask for. There may be some information you want to disclose and some you do not. Decide on a strategy as to when and how you will disclose your information. Less palatable disclosures are best made upfront - if you disclose bad news late in your discussions, the other party inevitably thinks you are fabricating information to support your position. Plan how you will divert attention away from information you do not want to disclose.

Define the deal
Before you begin negotiating it is essential that you know what you want and where you can be flexible. If you do not do this you can end up giving away things you do not want to concede or sticking on issues you could work around.

You define the deal you want by clarifying your key issues. You will then need to establish your ball park, that is the arena in which you have the freedom to negotiate, and finally you will need to establish who will play what role in the process.

Begin by establishing what strategy you wish to employ for this particular deal. This will depend on what stage you are in the deal, what your position is, what you want, in the time frame, what competition there is and any number of other factors. You will need to decide if you are selling, negotiating, or using other alternatives. The deciding factor for which strategy you will use will be the cost of that strategy in relation to the gain.

Knowing what you want
The multi-million dollar question is: what do you want? If we focus specifically on negotiation, it is important to list and prioritise your key issues. These are the factors in your negotiation that must be addressed in order for you to have a satisfactory outcome. It is a good idea to list and rank what you believe the other party's key issues would be too.

How do you get it?
Establishing your ball park is assessing the range in which the deal will be struck. It is the highest and lowest values between which you are prepared to strike a deal. These values will obviously be market related or you will be "out of the ball park". Your ball park will also depend on your mandate.

The expectation in any negotiation is that you will move from your opening position. It is therefore important that you open high but give good reasons for doing so. If you have worked out your ball park well you will know how far you can move from your opening and where you might be conceding too much.

Negotiation is about trading. It is therefore essential that in defining your deal you list as many trading variables as you can. You use these to entice the other party to take your offer or give as a concession to get what you want in return. There are as many different variables as you have time and creativity to think of! Of course, if you know what the other party wants, so much the better. Just remember to only give them what they want by getting what you want in return.

Who does the deal?
Planning who negotiates with whom in what role is also a key aspect of your preparation. You may decide to negotiate on your own or as a team. As a team you will need to decide who will run the negotiation, who will support by managing the process and summarising, and who will observe and coach.

Conclusion
The Dealmaker™ programme recommends that for every hour you spend in face to face negotiating you spend four planning. This may seem impossible in our so-called "busy" lives, but it may be the factor that most influences the quality of the deal.