Several years ago, I was asked to help a friend prepare for a sensitive negotiation and found myself perplexed by their mental state. Under most circumstances, I try to remain calm and focused on achieving the best possible outcome – rarely more so than in negotiations. Staying calm, well rested and focused helps me to keep negotiations on the straight and narrow, but my friend seemed overcome with what he called negotiation stress – he was spending hours each night trying to master the facts and carry out detailed scenario planning, becoming more and more irritable and unfocused as time went by.
Conventional wisdom tells us that remaining calm is an important negotiating tactic – the side that loses control of their emotions often ends up ceding more ground than they’d like. Despite this, my friend was becoming and more concerned about the potential negative outcomes of the negotiation and was placing terrific pressure on themselves to ‘win’ the negotiation – almost viewing it as a threat rather than an opportunity.
Why was this?
Whenever I’m asked to approach a new project or coaching opportunity, I usually start with a series of questions about the scope of what I’m being asked to do and to get an understanding of the situation. To try and understand the root causes of the negotiation stress, I asked my friend to tell me;
- What were their ideal outcome, worst outcome and best alternatives?
- What components were available to negotiate on.?
- What was their negotiating partner like? How old were they? What was their background? What were they looking to achieve? What did a ‘win’ look like for them?
- What was the source of their anxiety? Did they feel ill-equipped or uninformed?
Interestingly, my friend indicated that they felt unprepared to handle their negotiating partner, who was older and more experienced. This sense of threat was causing them to fixate on what might go wrong and all the reasons why they wouldn’t be able to achieve an optimal outcome.
What was my solution to solve the negotiation stress?
Instead of fearing their negotiating partner, I suggested that they see the negotiation as an opportunity for both parties to win an even bigger opportunity than either initially realised. My friend was focused on attracting funding for a business venture without giving away too much equity or burying himself under debt; the negotiation partner was focused on making a good investment without buying too much risk. But what if both parties could achieve their goals and more?
If my friend was focused on the risks, he would likely be too passive, focusing on dividing up existing benefits to each party rather than exploring options for creating new value. Instead of this, I suggested that my friend focus on opportunities to bring extra value to the table – offering preference to the investor on future investment opportunities and trade options, trying to negotiate access to other business partners and generally bring extra value to the table than a simple ‘you give me this, and I’ll give you that’ type arrangement.
Being an articulate and charming individual helped, but my friend also needed to lose the air of panic which seemed to grip him whenever he contemplated doing business with an older, more experienced individual. Rather than assuming a submissive negotiating position, I advised my friend to view the negotiation more as a meeting with someone with different, rather than better, skills. The businessman was a skilled investor, yes, and he was also wealthy and experienced. But my friend was youthful, well-educated, considerate and capable of bringing a great opportunity to the table which the investor would otherwise not have had access to.
Rather than spending hours ‘planning’ and losing sleep, I advised my friend to make sure he was well rested and to get to the venue early and with an open mind. If he concentrated on creating a pleasant (rather than confrontational) experience and adding extra value, I was confident that he’d be able to come away with the investment as well as a strong business relationship. Being tired, crabby and panicked is a terrible approach to negotiation and simply makes no sense.
In the event, my friend managed to negotiate a good equity investment in his venture and developed a relationship which endures to this day. The investor he approached later became a key customer of the business and introduced two buyers who helped to propel the business with larger orders in the early years. Instead of letting the negotiation stress take over and destroy this opportunity, my friend was able to keep calm and leverage his skills to build a fantastic opportunity for both parties.