Good negotiation skills are pivotal to business deals. Dishan Kamdar, deputy dean (academic programmes) and professor of organizational behaviour at the Indian School of Business, Hyderabad, defines the negotiation process as “getting to yes or getting past no". He explains the ingredients of a successful negotiation and the things a negotiator must keep in mind. Edited excerpts from a phone interview:
How important is preparation for a negotiation?
Probably 80% of people do not prepare before any negotiation. And for those who do, they do not spend more than 20% time in planning. They spend 80% of their time haggling. It should be the other way around. A good negotiator is data-driven and not hunch-driven. So, while preparing, collect enough data about your alternatives.
Are you saying you should always have an alternative?
Unless you can walk away, you are powerless. Before you enter into a negotiation, your second and third alternatives must be very clear. If it doesn’t go through with person A, then who will I go to, at what price, on what conditions, etc. Be ready.
Where would a negotiator get his/her power from? People answer that their brand gives them power, their position gives them power, their money gives them power, etc. But what is the use of your brand, your network, if you do not have alternatives.
How would you define success in a negotiation?
I think success is defined by meeting both parties’ objectives, and not by thinking that I know what their objective is without even asking. Our biggest problem is that we are bad listeners. We think we already know. Most of us ask our opponent “what do you want", and the buck stops there. But very few of us ask, “Why do you want it?" That “why" helps us understand your underlying needs, priorities, preferences and interests.
It is a doomed strategy if we start our negotiation by saying, “This is what I want". We need to listen first and then react. If we do that, most outcomes can be a win-win. A skilful negotiator will not decode positions that people take but will try to understand the underlying interests and then fulfil those.
Should you share information right at the start?
I would solicit information at the start. I would probe a lot; I would ask the other party about what they want, why they want, how important this is for them. In a negotiation there may be five issues we are discussing. We assume that all five are equally important for him or her. But that is not possible. Giving away information is as important as taking information. But also be sure to reveal your priorities. That helps you to establish trust.
So, should you be building trust first or establishing interdependence?
What is the point of creating interdependence when trust is low? The negotiation will not be long-lasting. Long-term association is based on trust.A lot of people say, “I am a cut-throat negotiator and you don’t have a choice," but how long will you hold off the competition? And you would have diminished your goodwill by then. The long-term sustainability of your business is a result of the goodwill you create. One way to create this goodwill is to establish very strong trust.
But there are cross-cultural interpretations of trust as well. If you are in Europe or northern America, in negotiations a person will trust you till you give them a reason not to. But in Asia, a person will not trust you unless and until you prove yourself . There is severe trust deficit in our culture. That is why relationship building is critical out here. That is why the whole wine and dine, playing a round of golf, etc., is given so much importance.