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Five Fundamental Skills for Effective Negotiation: Perception of Power by jigordon
December 4, 2007, 9:54 am
Filed under: Five Fundamental Skills, negotiation

You’ve done your research (Information Gathering), plotted your moves (Strategic Thinking), recognized your constraints (Time Management) and you’re ready to negotiate. Unfortunately, the other side really doesn’t need to talk to you. And guess what? They don’t have to – you’re the buyer today and the vendor is Microsoft. Ugh. OK. So what do you do now? How do you get a player as big as Microsoft to be willing to talk with you and make concessions?

Well, this is all about the Perception of Power – and it’s the fourth of the five fundamental skills for effective negotiation. You need to be able to recognize the power equation and learn how to balance it. This isn’t as tricky as it might first appear and can really be summed up in one single thought. Ready?

“Everyone who sits down at the negotiation table has power.”

It’s that easy. If they’re talking with you at all, you have power. Microsoft, even as large as they are, wants more customers – and yes, contrary to popular belief, they want happy customers. So if you have the potential to be a good reference (a happy, visible customer), they’ll talk with you. This means that as an individual, you’re kinda’ out of luck. But as a representative of an organization, you have more power than you might imagine.

Starting with the basics, make sure you don’t forget or abuse that power. Your goal is to merely balance the equation so that you’re not at a disadvantage, and not seeking, as the old parody Apple ad once proclaimed, “The Power to Crush the Other Kids.” You want what is best for your organization, nothing less and nothing more.

Thus, this sometimes means that you’re going to have to make mention of power and state the obvious – if they want your business, they’re going to need to give you some of what you need. You don’t have to be rude or nasty, just a simple comment that you really want to do business with them, but that you have some requirements that need to be met in order to close the deal. This indicates your willingness to talk and your desire for success. But it also shows that you’re not simply going to cave in to all of their demands or use their templates merely as a result of their size.

Next, you will need to monitor the power balance along the way. Folks like to see this as a teeter-totter – with each side moving up and down, but only one point in the middle where the balance truly exists. I’m not sure that the analogy really gets at the feelings behind the balancing act, so I tend to think of it as you balancing on two legs of your own chair. You lean back, possibly holding onto a table in front of you. You try to steady yourself first – finding the balance point before you let go.

For the first few fractions of a second, you feel totally balanced. Then reality kicks in and you find yourself making small back-and-forth motions to try to keep yourself steady. As time quickly passes, you increase the motions in terms of speed and intensity – which actually only throws you off balance more quickly. In the end, you either plop back onto all four legs… or you find yourself on your back.

The same is true for balancing power. It seems to always start small – posturing to make sure the other side knows that “you’re in charge”… but then gets bigger in a hurry… usually to disastrous results from a negotiation perspective. Thus, keep it small, keep it light and keep it balanced.

After the initial set-up (and the subsequent course corrections), you will also (or may have already) discover that people have a tendency to want to protect their position even within the negotiation itself. As “the negotiator” in many of these situations, my business owners tend to believe it’s my responsibility to take command. But the truth is that I’m no more in command of the negotiation than the bat is during a baseball game. I’m an instrument of the individual/organization in charge. Which means that I don’t make the “decision” but rather I help the business owner determine how to use me best… and then respond to their swing. You may talk with me, but you’re really talking to the business owner.

But this also plays out as folks wanting to make sure they’re heard when they do not understand their role – or believe their role is something more than it really is. Salespeople, for example, seem to fall into one of two camps – either they want to do all of the talking (they’re in command), or they do none of the talking (the contract is up to the lawyers). But again, they’re representing the business interests on the seller’s behalf – so while they’re in charge, they need to learn how to direct the activities of their team, even without saying a word during the actual negotiation.

Power also seems to manifest itself in a variety of strange ways. Most frustrating is the individual who wants to make sure they’re always the center of attention (which isn’t power). There’s also the person who tries to be a bully (again, many folks incorrectly believe that Microsoft acts in this manner, simply because of rumor). And most interesting to me, at least, are the folks seemingly oblivious to where power really sits – as it so often occurs in international relationships such as between Japanese and American business folks.

The key is just to remember that power surrounds and is infused in all negotiation. Knowing who has it, how much, and in what ways they use it will allow you to respond accordingly. Or not at all. 😉

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