How to Negotiate Like a Boss (When You're Your Own Boss)6 min read
Every great negotiator’s got their peccadilloes.
Putin shows up chronically late, even to hang out with the Pope. #Powerplay.
Trump sends advance notice that he’ll refuse to shake hands, only to oh-so-magnanimously extend his thin fingers when actually face to face. The generosity!
Even the great Bill Gates has his routine, reportedly staying up late the night before a big negotiation, wrapped in a baby-blue Snuggie, binge-watching episodes of “The Closer.”
(Ok, the last one’s made up, but you’re welcome for the image.)
Before starting on these Jedi-level, grade-A shenanigans, you’ve got to learn the basics. That’s what this list is for. Think of it like a packing list, except the only things included are shoes, underwear, and a toothbrush. This list is the thin fig-leaf just about keeping your negotiating-dignity intact. Let’s get after it.
Identify your ‘Walk Away Point’ (WAP)
How about some acronyms? WAP is lovingly referred to as “BATNA” by people who go to Cartagena for the weekend to binge-drink, AKA MBAs. BATNA is an abbreviation for the wonderfully jargony term “Best Alternative to a Negotiated Agreement” and is essentially a fancy way of describing the point at which you should walk away from a deal.
We’re starting with WAP because identifying it is the FIRST—and most important—thing you should do prior to entering a negotiation. Highlight this, underline it, heck, tweet it. It’s a biggie.
The first rule of #negotiation: Always know your WAP (Walk-Away-Point). Click To Tweet
You know that feeling when you’re right in the middle of a raging, incoherent fight with your sig other and you suddenly can’t remember what you’re yelling about? This is the type of situation you want to avoid when negotiating, and it’s something that can be avoided by identifying your WAP.
Without a WAP, negotiators tend to talk in circles, losing track of what really matters, and potentially even agreeing to something you wish you hadn’t. Save yourself the hassle by knowing when to walk away.
Have a listen first
There’s plenty of theory around whether it’s strategically better to open a negotiation or “force” the other person to do so. I think it’s a wash, and more importantly, there are significantly more useful things to focus on as you get started. Namely, the other person.
Encouraging the other person to share their needs and hopes achieves a few things: it shows an interest in fulfilling their goals, demonstrates empathy, and frames the discussion as a potentially positive experience for both parties.
Try it out. Put yourself in the other party’s shoes and make an honest effort to understand their end game before you dive into pushing your own agenda.
Now, drop the anchor
Whether you go first or second, at some point you’re going to have to drop the anchor. This is the moment where you share your first offer, which is psychologically likely to strongly influence the range in which the negotiation is conducted.
It’s important to choose your starting point carefully, beginning with a reasonable offer—that is, within the realm of possibility—otherwise, you risk losing the person’s trust. At the same time, keep in mind that your initial offer should give you plenty of space to move. If you will pay no more than $10 for a hamburger, don’t open at $9.
Another pro-tip here is to focus on your own offer. Do not get stuck in your own mind as you try to guess the other person’s anticipated anchor. If you find yourself getting carried away, refer to your WAP and compare. It’s your true North.
Use integrative bargaining
This is a way of “expanding the pie,” so to speak, or adding to the issues being debated. This is a powerful, constructive tool, as it essentially increases the chance of a “win-win” negotiation being undertaken.
When it comes to integrative bargaining, our second point around listening comes to play in a big way. By collecting information and demonstrating empathy early on, you’ll set yourself up for more opportunities for integrative bargain down the line.
In #business, integrative bargaining starts with empathy. Expand the pie of any negotiation by listening. Click To Tweet
How does this work? Discussing multiple issues allows for prioritization. Providing the negotiating parties prioritize different issues differently, we should be able to both get more of what we want by giving more of what don’t. We’ll get into this further a couple points down.
Just as it’s a good idea to listen to the other person’s goals, returning the courtesy can help move things forward, providing you’re genuine about it. If you sincerely express your priorities and explain why they’re important to you, your actions become considerably less arbitrary and easier to get onboard with.
For example, if you tell me that you can’t sell me your car before March because you promised to lend it to your buddy for a road trip, I’m likely to find you a lot more agreeable, and a lot less stubborn than if you just told me I simply can’t have it for another couple of weeks.
It’s not about #Winning
If you go into a negotiation thinking there can only be one winner, there’s a good chance you are (or will be) the type of parent that ruthlessly massacres their child at a shared sporting endeavor just so they “learn how to lose.” According to my therapist, that approach doesn’t help anyone.
It’s also not true! Taking a zero-sum approach to negotiating is at once destructive and blinding. Negotiations should be beneficial to both parties: after all, that’s the whole point. The only reason we negotiate is because we think, at some level, that we might do better together than apart.
The reason we #negotiate is because we think that we might do better together than we would apart. Click To Tweet
Here’s a metaphor someone relayed to me recently: imagine you and I both want the same orange. It’s on the table right in front of us, it’s waxy skin grinning in the light. For an hour or so, we squabble over who should get it. Eventually, you’re relentless, badgering, overpowering; I succumb. You walk away with your orange in hand, I walk away with nothing and hope to never negotiate with you again.
Imagine another scenario: the orange is still on the table right in front of us. Only this time, you ask me why I want the orange and how I can help. I tell you I want the seeds, since I want to use a couple to grow my own trees. I return the favor, finding out what you’re looking for. To my surprise, you only want the juice—ha! This is perfect integrative bargaining in action and we have both just “won.” We high-five in excitement. In a little less than five minutes, you have a glass of juice, and I have the seeds that I will watch do nothing in the little ceramic full of dirt on my windowsill.
So there you have it—the quick and dirty guide to negotiation. The only thing left is to channel your inner Kyra Sedgwick, and start closing.