Learn To Negotiate Successfully In Business
Learn To Negotiate Successfully In Business
We’ll start with a story:
I remember when a company I worked for introduced an employee evaluation cum review scheme one year. You were given a pretty standard form and answered the questions as they applied to your individual role in the company and rated yourself on a score of 1 to 5 on each.
You then arranged a meeting with your immediate boss who would go through the completed form and discuss each point with you and award his or her own rating to each one.
The sting in the tail was at the end of the form (which ran to several pages) where you stated the salary you felt you deserved. In my case all was going swimmingly with the CEO, who had rated me higher than I had done myself on several points, until we reached this part. But boy, had I really gone for the moon on that salary! His jaw literally did open, just slightly, and he said he’d need to talk to his co-director and come back to me.
A week later I met again with the CEO and the Finance Director and we came to a very amicable agreement. It was actually precisely the conclusion I was after but I’d never have achieved it if I’d gone in at that figure in the first place.
The CEO then told me that, no matter how much of a good job he thought I was doing in future, he’d never ever tell me again to my face…!
Background to the story:
In the preceding story the stratagem of getting the employees to write their desired salaries on the form was based on the belief that the average person will only go for a maximum of 10% more than they are currently earning.
As the company had had a good year, what the directors had in mind to offer me was roughly a 12½% raise, so they were quietly confident that I would gratefully accept it and think them generous.
What they’d failed to take into account was that all three of us (the MD, the FD and I) knew that I was underpaid in relation to my value to the company and my unique position at that time within it. So where we differed was in how much money we believed was required to put that anomaly right. In addition, as I said earlier, having worked with these people for two years by then, I knew that I’d have to aim for more than I could reasonably expect to get in order to allow them to ‘talk me down’ and let both sides save face.
So what I went for was a 33% raise and what we settled on, ultimately happily on both sides, was 20% and additional company benefits.
6 rules of negotiations:
The story illustrates, to my mind, the importance of six crucial rules that govern successful business negotiations:
1) Do your homework in advance, know and be able to justify your value.
2) Know as much about both sides of the situation and the mentality of the people you are dealing with as possible.
3) Know what you want to achieve, what is reasonable to achieve, and be prepared to stick to your guns.
4) Ensure that all parties are happy with the outcome – nobody should feel that he or she has lost - I won’t pretend that my knees weren’t knocking when I went into that meeting with the two guys, or that it hadn’t gone through my mind several times in the intervening week "What do I do if they tell me to take a hike?" But as it happens, I gained a lot of respect from both directors and was subsequently treated somewhat differently, being co-opted onto think tanks, committees and new business presentations that I’d never been part of before. So there’s a fifth rule:
5) When you negotiate successfully it usually results in enhanced respect for you, and the value of the service you provide to your employer or client. What if the directors had dug their heels in and declined to improve on the original offer? I would have had no option but to have thanked them and resign. To do otherwise would have resulted in me losing face and respect, and my position in the company would have been untenable.
Interestingly, some years later, and in greatly altered circumstances, I needed to negotiate a rate of pay with that same CEO. This time I outlined my case, my reasons and why I believed the rate was fair, and went for exactly what I wanted – and got it with no argument. By then there was no need for posturing on either side so we completely did away with it.
But this brings me to the sixth issue with regard to negotiation:
6) If you can’t get what you believe to be a fair deal – be prepared to walk away – if you’re not, the other party will sense it and you will lose.
I wish you success in your negotiations.
Learn To Negotiate Successfully In Business - To learn more about this author, visit Linda Mattacks's Website.
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We all negotiate so let's learn how to do it ethically, sensitively and to the best of our ability.
We’ll start with a story:
I remember when a company I worked for introduced an employee evaluation cum review scheme one year. You were given a pretty standard form and answered the questions as they applied to your individual role in the company and rated yourself on a score of 1 to 5 on each.
You then arranged a meeting with your immediate boss who would go through the completed form and discuss each point with you and award his or her own rating to each one.
The sting in the tail was at the end of the form (which ran to several pages) where you stated the salary you felt you deserved. In my case all was going swimmingly with the CEO, who had rated me higher than I had done myself on several points, until we reached this part. But boy, had I really gone for the moon on that salary! His jaw literally did open, just slightly, and he said he’d need to talk to his co-director and come back to me.
A week later I met again with the CEO and the Finance Director and we came to a very amicable agreement. It was actually precisely the conclusion I was after but I’d never have achieved it if I’d gone in at that figure in the first place.
The CEO then told me that, no matter how much of a good job he thought I was doing in future, he’d never ever tell me again to my face…!
Background to the story:
In the preceding story the stratagem of getting the employees to write their desired salaries on the form was based on the belief that the average person will only go for a maximum of 10% more than they are currently earning.
As the company had had a good year, what the directors had in mind to offer me was roughly a 12½% raise, so they were quietly confident that I would gratefully accept it and think them generous.
What they’d failed to take into account was that all three of us (the MD, the FD and I) knew that I was underpaid in relation to my value to the company and my unique position at that time within it. So where we differed was in how much money we believed was required to put that anomaly right. In addition, as I said earlier, having worked with these people for two years by then, I knew that I’d have to aim for more than I could reasonably expect to get in order to allow them to ‘talk me down’ and let both sides save face.
So what I went for was a 33% raise and what we settled on, ultimately happily on both sides, was 20% and additional company benefits.
6 rules of negotiations:
The story illustrates, to my mind, the importance of six crucial rules that govern successful business negotiations:
1) Do your homework in advance, know and be able to justify your value.
2) Know as much about both sides of the situation and the mentality of the people you are dealing with as possible.
3) Know what you want to achieve, what is reasonable to achieve, and be prepared to stick to your guns.
4) Ensure that all parties are happy with the outcome – nobody should feel that he or she has lost - I won’t pretend that my knees weren’t knocking when I went into that meeting with the two guys, or that it hadn’t gone through my mind several times in the intervening week "What do I do if they tell me to take a hike?" But as it happens, I gained a lot of respect from both directors and was subsequently treated somewhat differently, being co-opted onto think tanks, committees and new business presentations that I’d never been part of before. So there’s a fifth rule:
5) When you negotiate successfully it usually results in enhanced respect for you, and the value of the service you provide to your employer or client. What if the directors had dug their heels in and declined to improve on the original offer? I would have had no option but to have thanked them and resign. To do otherwise would have resulted in me losing face and respect, and my position in the company would have been untenable.
Interestingly, some years later, and in greatly altered circumstances, I needed to negotiate a rate of pay with that same CEO. This time I outlined my case, my reasons and why I believed the rate was fair, and went for exactly what I wanted – and got it with no argument. By then there was no need for posturing on either side so we completely did away with it.
But this brings me to the sixth issue with regard to negotiation:
6) If you can’t get what you believe to be a fair deal – be prepared to walk away – if you’re not, the other party will sense it and you will lose.
I wish you success in your negotiations.
Learn To Negotiate Successfully In Business - To learn more about this author, visit Linda Mattacks's Website.
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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