10 Things You Should Know Before Walking Into The High Stakes Negotiation

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Whether you’re resolving a conflict between team members or closing a sales deal worth millions, negotiation skills are a must-have for business leaders.

Done right, negotiations can help you facilitate a healthy work environment, hire and retain key employees, establish key partnerships, develop long-term strategies, and get a fair price for your products and services.

Done poorly, negotiations can cost your business thousands—even millions— of dollars in fees and lost profits.

You would think then that most successful entrepreneurs, CEOs, and other executives would have the skills to enter each negotiation with courage and confidence, right?


The Key To Effective, Confident Negotiating 

Victoria Medvec is a leading global expert on negotiation strategy, corporate governance, and decision-making. In her book, Negotiate Without Fear, she describes a scenario she’s seen frequently in decades advising Fortune 500 clients in high-stakes, complex negotiations:

Seasoned and novice professionals alike allow emotion to guide their actions.

But it doesn’t have to be that way.

Business coach David Finkel, the author of The Freedom Formula, says confident and effective negotiation starts with knowing what you want to accomplish. Strong negotiators formulate a plan that puts key skills, knowledge, and relationship-building to work to seek that outcome.

If you’re one of those leaders who struggle with fear during negotiations, bolster your confidence by arming yourself with key skills.

10 Things To Know For Effective Business Negotiations

As you enter a negotiation, prepare by planning ahead.

Think about the issues on the table, and establish your goals. Once you’ve done your research and thought about your game plan, you’re ready to kick your fear of negotiating to the curb.

Put together a script for your negotiation and keep in mind these 10 things you need to know as you prepare.

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1. Know The Other Party’s Needs

Take into account what the other party is looking for as well as any leverage you might have in negotiating. Examine what you can offer that addresses the other party’s needs. Review a business’ website, or check an individual’s LinkedIn profile, for example. Research your competitors’ pricing.
Then gauge the dynamics of the negotiations, noting factors such as the other party’s time constraints and other alternatives they may have if they don’t accept your offer.

2. Know Your Differentiators

Consider what you or your company bring to the table that sets you apart from the competition. Use these differentiators to encourage the other party to make an offer that goes beyond what they might provide to others who don’t offer this feature or service.

3. Know Your End Goal

Establish a goal for what you ultimately want to achieve from the negotiation. Then plan to start your negotiations with an offer that goes beyond that goal.

Since the other party rarely accepts the first offer, an ambitious initial ask allows you to give a little while still achieving your goal. Victoria Medvec recommends being the first to make an offer. Extensive research has shown that the party with the first proposal typically has the better outcome, so it’s in your best interest to do so.

4. Know What Options You Will Offer

Bring several options for offers to the table.

These multiple equivalent simultaneous offers (MESOs) show you’re willing to present a solution that’s just right for the other party.

For example, you can bring three potential packages with easy-to-accommodate differences in areas such as roles, success metrics, or timelines. This helps you facilitate a mutually beneficial agreement.

5. Know How To Listen

Even after you make a plan to make the first offer and present multiple options, be ready to kick things off by listening to the other party’s needs.

Take a genuine interest in the challenges they’re facing, the help they need, and any constraints they have in asking for help. This goes a long way and helps you build a relationship that establishes trust.

6. Know Your Plan B

Strengthen your bargaining power by walking in with the best alternative to a negotiated agreement (BATNA)—or, even better, multiple BATNAs.

These options provide you with appealing alternatives that free you to make ambitious initial offers. High-quality BATNAs are also a great fallback if your other proposals don’t land.

7. Know When To Stand Your Ground

Be prepared for counteroffers. You want to be ready to respond with your own counteroffers instead of simply accepting what the other party presents.

Keep in mind that they’re negotiating because they need a product or service that you offer, so stand your ground with reasonable responses when you can. Use the conversation surrounding counteroffers to learn more about the other party and develop appropriate solutions.

8. Know How to Concede

Conceding does not make you weak.

Your goal should actually be to concede but to do so in a way that still enables you to reach your goals. This approach encourages the other party to feel satisfied with the deal, strengthening the relationship you’re forming with them.

To get the most impact out of your concession, negotiate in person, highlighting the concessions you’re making as you arrive at an agreement.

9. Know When To Walk Away

Have an exit point in mind as you enter negotiations.

Too often, people enter high-stakes negotiations with the idea that making a deal is the only option. But that approach can leave you with a bad deal. You might even have to live with those negative repercussions for years to come.

Instead, equip yourself with details that show why your offer is reasonable, and be ready to walk away if you hit your predetermined exit point and can’t find a resolution.

10. Know How To Close The Deal

Keep a positive tone as you close the deal, again keeping in mind the value of establishing a good relationship moving forward.

Establish the closing process upfront too, highlighting factors like who will be the main contacts for finalizing the agreement and what the deadlines will be for hammering out the details.

Encourage quick agreement by emphasizing a sense of urgency; reiterate the value of your offer and the importance of acting swiftly.

Master High-Stakes Business Negotiation Skills

So there you have it.

To rise above your fear and negotiate confidently, you’ll need those 10 pieces of information.

If you’d like to take another step toward mastering your high-stakes negotiations, join us for our upcoming free webinar “3 Strategies Top Executives Are Using To Win High-Stakes Negotiations, Strengthen Relationships, And Save Millions.

In this training session, at 12:30 p.m. ET March 10, Verne Harnish will share the master negotiation strategies of Victoria Medvec. You’ll learn tactics to follow to conquer the negotiation process, you’ll discover how you can put negotiation skills to work in your personal life, and you’ll even have the opportunity to ask Verne your questions about effective negotiation.