Negotiation Strategy Basics
Before engaging in any negotiations you should set up some rules and guidelines for how you plan to approach the situation. Let me elaborate on some basic principles of negotiation and focus on some specific strategies that I was able to apply effectively on multiple occasions. I was able to negotiate multiple work contracts that were mutually satisfying and I was always happy to sign each one of them. Most importantly however: looking back at all the deals I am still happy with each one of my decisions. I accredit this fact to successful negotiations.
Principle I
The Invariant of Negotiations: Foster Relationships
All negotiations should lead to better relationships between the parties. Your paramount objective ought to be to enjoy the debate and to learn something, regardless if a deal is cut or not. Remember you all have a mutual interest and both parties will do their best to find common ground. Hence your focus should not be on convincing your counterpart of anything or to win the trophy or to outsmart your counterpart. Those are very old fashioned notions of negotiations and I have only seen them work in shows like 'Suits'. Negotiations should always lead to a better mutual understanding of the parties and to a stronger relationship even if it is only a temporary one.
Pre Negotiations
Principle II
Have Your Own Unfair Advantages
There's a quip I hear a lot at work: If you plan to go to a shootout, don't show up with just a kitchen knife. This could not be more applicable in a negotiation situation. The first mistake you can make happens already in the preset of the actual happening. There are multiple ways to acquire what I call an 'unfair advantage'. It is unfair because negotiations are never entirely fair in the first place. First off, if you negotiate your contract with a large corporation, this will already be a kind of David vs. Goliath situation. You might think to yourself 'They have the brightest heads. There are certainly 10 guys waiting to get a shot if I can not land a contract.' or something similarly discouraging. Second, you will always negotiate your contract with multiple counterparts in a 1:n situation. I don't care if you are the most extroverted, outgoing and quick-witted guy in the universe, but this will put some pressure on you. It's unfair because you will not be permitted to bring your spouse or your career coach along to help you in the negotiations. You'll be on your own so you'll have to be a pro. Third, your counterparts are likely going to be more senior than you and certainly impress you with their titles and their work merits. For young professionals this can be intimidating even if they already have a few good 'war stories' to tell. As you see, you will always have some unfair disadvantages that you will not be able to compensate for. All the more it is important, that you make sure you also have your unfair advantages in the back. You don't have to lay open all your cards. In fact most of the times it is better not to disclose your unfair advantages as this might make an arrogant impression. Nevertheless just having these unfair advantages will let you feel more confident and make you a better negotiator. Here's my three most effective unfair advantages:
Options Advantage
Alternative options, like multiple contract offerings or a highly effective network of people who like, trust and support you (friends, colleagues, suppliers, customers, headhunters, etc.) will make you a better negotiator because you will always have a baseline to relate to. Hence walking away from a not good enough deal is always going to be an easier and more realistic option than without any options. This will work for you in two ways: On one hand it ensures you don't overcommit with your concessions and don't drop below your MFRs. On the other hand it will allow you to be tougher with your concessions.
Information Advantage
Doing your homework on intel about your potential employer is an absolute key in negotiations - find out as much as possible before you enter negotiations. Do your research about the company, facts and figures, its customers, relevant markets, developments, strategies, organization and structure, culture and so on. If possible talk to people who already are working or have worked for the company. Maybe you can even find someone in the same area you're planning to work in.
Time Advantage
Don't let yourself be rushed and make sure time is on your side. Contract negotiations are usually the final step in hiring processes. In case you have not been able to come to an agreement on all specifications of the contract you should always be prepared to postpone your decision. Don't be afraid to have a few more iterations after the actual negotiation meeting, in case some items were still left open. Taking a new job is a big decision, so take your time.
In case everything is agreed you can still easily pull a rabbit out of your hat and ask for some time to make a final decision. You may argue that you need to consult with your spouse/close friend/mentor before you take the final decision. In fact this should not be a mere decoy but actually your standard procedure for important decisions. Companies don't like to have offerings be left open over a long period but as a benchmark they usually grant up to a week considering time. You on the other hand should not rush things, keep your cool and play your cards right.
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