Think you don’t use negotiation most every day of your life?
From the time we learn to manipulate our parents from the crib to today, we learn to negotiate to obtain our wants and needs. As we grow, we negotiate constantly with our parents, then with our peers. As we enter the business world, we negotiate with our bosses and our subordinates. We negotiate with our suppliers, customers, investors, and even our auditors. At home, we certainly negotiate with our spouses or significant others.
Learning and practicing the art of negotiation
If we are constantly negotiating to obtain an advantage or just a win-win attempt at parity, we should try to learn and then practice the art of negotiation (although I prefer to think of it as a science then delivered in its final form as art.)
It could be as simple as reading the right book
Because I believe that negotiation is so important to our success in the business and in the social world, I re-read my favorite book on the subject again every couple of years, just to keep myself aware and sharp using the tools and techniques so important to a successful negotiation. The book, You Can Negotiate Anything, by Herb Cohn was first published in 1980 and is available today as the best and easiest to read of all the books on the subject. I implore you to read this book and internalize the three crucial variables, the many styles of negotiation, and the fourteen powers you can call upon or recognize when used by others in a negotiation.
Removing the emotion from a negotiation
[Email readers, continue here…] Over the years, I have been delegated by more than several entrepreneurs and boards to negotiate critical agreements, sometimes to sell the company or merge it with another. I was selected because I did not have an emotional stake in the outcome as did the entrepreneur, or the continuing relationship with a buyer as would others in management who might remain after the sale. With that freedom, I was able to use the tools of negotiation to achieve a result better than if I worried each moment about disrupting the deal when making each move and countermove. There is a lesson there, one the same Herb Cohn quoted in a later book, in which he entreated his readers to negotiate with care, but “not that much care” as to lose perspective.
A story of a big win-win
I recall one such instance, when delegated to be the lead in negotiating a sale of a company on whose board I sat, I asked the entrepreneur to name his expected price in an ideal sale, which he did immediately as if he’d been thinking of this for some time. Surprising him and the rest of the board, I asked him to go home and not to attend the negotiation session set for that evening at a local hotel, promising to call him immediately with the outcome. I am sure he worried over losing control of his most important business negotiation ever, but he did cede the task to me (and another board member).
Doing your homework before the event
Doing my homework ahead of time, using one of Herb Cohn’s principles (please read the book), at the start of the negotiation I placed a paper in front of the negotiator representing the intended buyer, showing how our company would be accretive to their public company valuation, properly valuing our purchase at three times the ideal amount as stated by our entrepreneur-CEO. The buyer looked over the numbers for a few minutes, recognizing the accuracy of my statement from his due diligence and knowledge of his own financials. In a sincere response so transparent as to be an obvious truth, he stated, “Oh, but I only have authority from the Board to offer two-thirds of that” which of course was twice our entrepreneur’s the asking price.
And a successful outcome
After forty-five minutes of further negotiation, we walked from the room with an agreement to sell the company for cash at twice the asking price. And as the entrepreneur still tells the story, we two board members walk on water for having delivered such great results. In fact, we had done our homework, presented a logical case, and created a win-win by leaving enough value for the buyer to add to its market capitalization as well as doubling our sales price.
Since we negotiate daily for things large and small, wouldn’t it be high on your list to learn to use the tools and be aware of the elements of a great negotiation?