How a Negotiation Planning can help you Make a Better Deal
Those of you who are regular followers of our blog know that we place a great deal of emphasis on mind-set. But mind-set alone is not enough—just thinking correctly isn’t going to get you there. At the end of the day, negotiation outcomes are decided by what you do.
In my work with clients, people often ask me, “What’s the most common mistake you see in business negotiations?” Terrific question! And the answer is the same every time: lack of planning.
Many people resist planning like the plague. And let me tell you, they pay dearly for that resistance, because planning just might be the most important factor in successful negotiation.
If I had to bet on the outcome of a negotiation between a naturally skilled negotiator who hasn’t planned well and someone with only average skills who has done a great job of planning for the negotiation, my money would ride with the planner every time. In negotiation, NOTHING takes the place of planning. In fact, it’s so important that we’re going to devote two blogs to it.
Today, we’ll have the One-Minute Negotiation Planner—that’s right, you can just do it in your head in a minute. It’s great for those occasions when you get ambushed and find yourself in a negotiation that you hadn’t anticipated (one of those that, from time to time, just came out of the woodwork).
Next week, we’ll have the full-blown Street-Smart Negotiation Planner, but this one-minute planner can save you a lot of grief.
Here How Negotiation Planner works:
First draw a circle about the size of a half-dollar. Out beside it, write “Ask for this.”
Below that circle, draw a new circle about the size of a quarter, and write beside it “Be elated with this.”
Below that second circle, draw a circle about the size of a nickel, and write “Most probable outcome.”
Below that third circle, draw a circle about the size of a dime, and write “Less than hoped for, but acceptable.”
And finally, below that, draw a circle about the size of an English pea, and write “Walk-away point.”
You can do this in a minute, but it gives you a framework for a negotiation that’s pretty good, and it can keep you out of a lot of trouble.
Your first thought will often be the “most probable outcome,” and a large percentage of your negotiations will probably end up in that area. And you may ask, “Why have the ‘ask for this’ category so high on the planner if I almost never get it?”
The answer is twofold:
Some negotiations will end up in the “be elated with this” category—actually, about the same percentage as end up in the “less than hoped for, but acceptable” category.
A tiny percentage of negotiations end up in the “ask for this” category, and the “walk-away point” means just what it says. In any negotiation, you have to have a walk-away point. As obvious as that sounds, I’ll bet you’ve run across situations that were so out of bounds, you had to wonder, “Who made this deal? This is a crazy arrangement—what were they thinking!” When you find a deal like that, someone either forgot their walk-away point or never had one. They probably started in a weak position; then, as the negotiation progressed, it got worse. They gave away a little here and little there, and before they knew it, the agreement was so lopsided, they should have walked away—but they didn’t have the guts to do it.
You could chart these outcomes on a bell curve and it would work pretty well.
Over time, most negotiations are going to end up in the middle area. Every now and then, one will go better than you expected, and every now and then, one will come out worse than you expected.
Note: this simple mental framework is not intended to replace a thorough in-depth negotiation planning session. We’ll cover that next week. The One-Minute Negotiation Planner is just to keep you out of trouble. It’s to give you something “quick and dirty” to keep you from getting ambushed and making a costly mistake.