Here are fifteen quotes that each communicate a different truth about negotiation. I have added some commentary to suggest how to apply them.
Negotiation Can Access Resources Beyond Your Control
“Entrepreneurship is the pursuit of opportunity beyond the resources you currently control.”
I really like this definition of entrepreneurship. The core tactic is quid pro quo or an exchange of value. And any time you are discussing an exchange of value–the customer’s money for your product for example–you are in a negotiation.
“The real problem is usually when to make a decision, and not what the decision should be.”
George C. Marshall
Understanding the external constraints imposed on you, especially with regard to timing and events or actions you must respond to, shape the deadlines for your decisions and any negotiations for resources that can affect your decision. It’s also essential to understand the constraints that any counterparty you are negotiating with faces as well.
“Pricing is the moment of truth—all of marketing comes to focus in the pricing decision.”
I believe that too many technically oriented entrepreneurs neglect the business model and relationship aspects a making a start-up successful. In particular software engineers become accustomed to the total control of their environment, an expectation that does not hold for activities that involve negotiation and persuasion such as sales, marketing, and business development. Activities that are vital to business success.
Preparation is Key to a Successful Negotiation
“What if” is a good question to ask about any assumption you are making about your situation, the needs of the counterparty, and actions that they are likely, or unlikely, to take. If the “5 Whys” get you to root cause and corrective action, the “5 What if’s” give you peripheral vision and minimize surprise. It’s better to predict a dozen potential scenarios than one on the one perfect approach and plan.
“I’m just preparing my impromptu remarks.”
I think one side in a negotiation looks more like a jazz combo than a quartet: they have a shared understanding of what they want to achieve and a number of “plays” they can run but it’s less about a tightly scripted approach than reacting intelligently to the unfolding situation.
Trust Actions Not Words
Life happens at the level of events, not of words.
Trust only movement.”
Good advice for negotiations: mix small steps with mutual progressive disclosure.
“Small opportunities are often the beginning of great enterprises.”
I think the correlation runs even stronger in the other direction: almost all great enterprises begin with small opportunities. The challenge is not only to see the oak in the acorn but finding the right place for it to become a forest of oaks.
“A design isn’t finished until somebody is using it.”
If you are relying only on “mental simulation” or asking prospects to imagine or anticipate a new behavior then you cannot judge if you will really have a sale. Once prospects have had a chance to experience the product they and you will have a much better sense of the likely impact on their business.
Listen For Information Given Away by Questions
“Anton thought about asking Ozaki, but decided against it. One should always be concerned about the information given away by one’s own questions. A searchlight reveals the searcher’s own location first of all.”
Alexander Jablokov in “Carve the Sky“
Always worth bearing in mind in any negotiation that any question can disclose weakness and strategic intent.
“The first thing to decide before you walk into in any negotiation is what to do if the other chap says no.”
What questions he is likely to ask and how you will answer, and perhaps most important: what you would like him to say yes to.
“Behind intimidating messages are simply people appealing to us to meet their needs.”
Threats can give away as much information as questions, another very useful rule of thumb for negotiations. Silence is often a better response than anything you might say: especially in reacting to threats, a long pause can do more to trigger a retraction or revised offer than your first or even second verbal reaction. Also, if you have made an offer or request wait until the other party responds: do not follow up and start to negotiate with yourself.
“Nothing may be said which is not true, but it is as unnecessary as it is sometimes undesirable to say everything relevant which is true; and the facts given may be arranged in any convenient order. The perfect reply to an embarrassing question is one that is brief, appears to answer the question completely (if challenged it can be proved to be accurate in every word), gives no opening for awkward follow-up questions, and discloses really nothing.”
This is good advice but you have to assume that you are negotiating a long term relationship and all of the facts will be known.
“Honor is like an island, rugged and without a beach; once we have left it, we can never return.”
Most industries are small clubs where it is easy to develop a good (or poor) reputation, my bias is for honesty in negotiations.
Always Negotiate Your Entire Agreement
“Synergy means behavior of whole systems unpredicted by the behavior of their parts taken separately.”
Buckminster Fuller in “Synergetics“
Always negotiate the entire deal as a package, not each deal point in isolation. Each element of the deal is hard to evaluate separately without the context of the entire agreement.
“3-D negotiators shape the scope and sequence of negotiations to achieve the desired outcome.”
David Lax and James Sebenius in “3D Negotiation: Playing the Whole Game“
But understand that you may be facing a sequence of negotiations: proof of concept, pilot project, initial adopter group, second adopter group, wider deployment. Take things one step at a time, aiming for a shared outcome that is mutually risk reducing. But negotiate the all aspects of the next step in parallel.
“Any man who’s not willing to take half a loaf in a negotiation, well, that man never went to bed hungry.”
It’s not a real plan until everyone is a little unsatisfied. It’s rare that you have the leverage you get everything you want, and even then the counterparties may find a way to “repay every kindness” in the future. The point of customer conversations is not to win the argument but find a win-win settlement.
Related Blog Posts
- Early Sales Efforts Foster Value Co-Creation
- Three Sets For Negotiating a Software Deal
- Negotiate the Level of Reference in Parallel with Price and Other Terms and Conditions
- 3D Negotiation
- I did a webinar with Steve Mock, an experienced negotiator, on software license negotiation, that is available at https://vimeo.com/25482001
- Honesty in Negotiations