Lessons from the Negotiator The art and science of negotiation is an essential part of sales, but it is a subject about which people in sales often know very little. Sure, you may have run successful negotiations before, or got a customer to agree to your terms on price in exchange for better delivery options, but how much do you actually understand about the process? And why should you care? We spoke to Wits Business School's senior lecturer on negotiation, Geoff Heald to see what advice he might have.

Preparation
Being successful in negotiating is largely dependent on understanding the principles that govern the process. Advance preparation is a requirement, not only to understand your counterpart and their needs and desires, but to gain a clear understanding of your own position. Heald believes it is necessary to be able to pass what he calls a ‘single sentence test.' "You need to be able to say what the precise purpose is of the meeting that you're having. Good meetings are contagious, and so are bad meetings," he says. Top negotiators are often successful because of their ability to think on their feet and make decisions quickly. The reason they can do this is that they have a clear understanding of what is at stake, what they must win and what they are willing to concede thanks to the extensive preparation they put in prior to the negotiation.

Ideal, Realistic and Fallback
Heald says that before you approach any negotiation, you must have an Ideal Position, a Realistic Position, and a Fallback Position. "If you don't have those, you are naïve, and naïveté is one of the cardinal sins in negotiation. As is cynicism by the way. Cynicism is rust on your soul which prevents you from doing the impossible. It is realistic to believe in miracles, but you mustn't be so naïve as to assume everyone sees things your way. You often encounter people who are out there to screw you."

The play book
We often hear about the pitfalls of misunderstanding foreign cultures. You can read some amusing examples on Page 64 of this issue. But while some examples can be amusing, getting the ceremonial process wrong in a negotiation situation might be enough to scupper any deal, even when the deal has been concluded. A lascivious comment to a secretary on the way out can make a fatal mess of the whole thing. According to Heald, banks in particular have a very closely designed ceremonial process for the closing of big deals. "Nothing must be allowed to get in the way of that deal being concluded and so the process is very tightly orchestrated," he says. Heald says it is impossible to overstate the importance of making your behaviour appropriate for the given set of circumstances. "You can get seriously hurt from not understanding the ceremonial of meetings," he says.

Timing
"Timing is dependent on preparation. Preparation of yourself, and of understanding your negotiation counterpart, how they are positioned within their organisations and what their interests are. Negotiating is an art and a science. Timing is the art component," says Heald. "Furthermore, the matter of when to have meetings openly and when to have them secretly is a vitally important discernment," he says. Heald refers to understanding when the time is ‘ripe' for negotiations, stating that this is critical to their success. You gain a perception of ripeness only when you have done your preparation.

Active Listening: the secret weapon
Active Listening is critical in the negotiation process, according to Heald, just as it is in other areas where the information being transferred is of absolute importance. "Air traffic controllers and aircraft pilots practice Active Listening all the time," he says. The job of a good negotiator is to listen to and be certain that they understand what others are saying. After all, you can't make an intelligent response to an opinion you do not fully and clearly understand. Another major advantage of Active Listening is that by showing your counterpart that you have listened to them fully and have paid attention to what they are saying, you are in a much better position to change their mind. Trying to convince someone of the strength of your case when they don't feel they have been heard is almost impossible. Acknowledge their feelings and their point of view, even if you don't agree with them. By understanding, and making it clear that you have understood them, you gain enormous leverage.

Take It Or Leave It (TIOLI)
You have probably experienced this one: you are reaching a satisfactory agreement and there are just one or two other issues to resolve when the other party says: "that is as far as I am willing to negotiate. That is the deal, take it or leave it."

What do you do? Try these responses:
Summarise your position so far, out load and in a friendly manner. "Wow, we've been doing really well so far. Why has it come down to TIOLI now?" If you can get an explanation from them, you can work through their reasoning and get things back on track. Isolate the objection: "Does it have to be TIOLI on all of the remaining points, or is there just one that you absolutely must protect?" Perhaps there is something you can do to get leverage on the other issues, apart from the one that the prospect is concerned about. Buy some time: "Does it have to be TIOLI right now or can we have a couple of days to think this through?" If you can affect the time of the other party's pressure play, you will reduce its effect and allow any emotional content to dissipate.

Negotiation can be friendly
Usually, a negotiation gets underway because both sides have something that the other side wants. There is therefore the potential for an atmosphere of cooperation, not confrontation. Of course that will depend on the people involved, but in customer relationships for example, you may wish to lay the groundwork for potential future negotiations. In that case, you don't want the other party walking away feeling like they have been screwed. The best outcome for almost all negotiations is win/win, when both parties walk away with a positive feeling about achieving their goals.

The people aren't the problem
Understand that the person on the other side of the table may be constrained by rules that they didn't make and may not even agree with. But they do have to abide by them. If you view your negotiation counterpart as an ally and work with them so you may both achieve a victory, rather than as an opponent that must be defeated, you can focus on deconstructing the barriers between you. If you understand that the thing that needs tackling is the problem and not the person, then you stand a good chance of a great outcome.

Don't focus on a single issue
When you focus on just one issue, there can be only one winner. A common example is arguing over the price of something. To avoid creating a win/lose outcome, you can bring other factors into the negotiation, such as delivery fees, timing, quality, supplemental goods and services, and so on.

Don't negotiate with yourself
Once you've made an offer, if the other party doesn't accept it, don't make another offer. Wait for a counteroffer. Don't lower your own demands without getting them to lower theirs. A common trick customers might use is that of allowing a heavy silence to descend when you make a proposal in a bid to unnerve you. Just sit tight. It is a negotiation and the ball is in their court, not yours.

Focus on interests, not positions
When preparing for a negotiation, or even after it has begun, it is important that you not only as "what do they want?" but also, "why do they want it?" Do this about your opponent and yourself to be certain you understand both positions. You can be a lot more successful if you focus on interests, and not positions in your negotiation. What does that mean? One great illustration took place between Egypt and Israel in 1978 when they entered negotiations over ownership of the Sinai Peninsula, which Israel had occupied since 1967. Both countries took the position that they were unwilling to allow the other to own the land. It was a stalemate, until an exploration of their interests revealed more negotiable points. Israel, it turned out, didn't care about ownership of the land, it just didn't want Egyptian tanks rolling across its borders. Its interest was that of security. Egypt's interest was to regain land that had been Egyptian since the time of the Pharaohs. While their positions were incompatible, their interests left plenty of room for negotiation. The Sinai was returned to Egypt, satisfying its interest in getting its land back, but it was declared a demilitarised zone, which satisfied Israel's interest in security.

Saving face: a lesson from Japan
Japan's Maspro Denkoh Corporation decided to sell its substantial corporate art collection in 2005 and contacted Christie's and Sotheby's – the two leading auction companies in the world, for proposals. When the proposals came in, Maspro Denkoh's CEO, Takashi Hashiyama, decided they were too similar for him to be able to make a decision. So he decided the winner woiuld be determined through a game of "Rock, Paper, Scissors". Strange as that decision may seem, Rock, Paper, Scissors is often used to determine simple decisions in Japanese businesses. But Hashiyama thinking was somewhat more refined than you may think. Being a skilled negotiator, he knew that it was important for the representatives from both organisations to save face and that if he could avoid making one of them lose, he would preserve the relationship for the future. So he requested that the heads of the Japanese subsidiaries of the two auctioneers write down, on paper, their first, second and third choices for the three round game, and submit those. That way, there would be no winner and no loser in a face-to-face competition. When the time came, the envelopes numbered ‘One' were opened and the contents compared. Then the same was done for envelopes Two and Three. Christie's won the business.

Are we teaching our customers how to win at negotiating?
Believe it or not, you have already tipped your hand more often than you should, and shown your customers how to win at doing business with you. If they feel let down or angry, we make amends through some sort of concession towards them. The lesson they learn? Get angry with us, more often. At the end of a selling period – a year end of end of quarter – we pull out all the stops to try to sign up more business to make or exceed quota. The lesson? Customers can get a far better deal from us if they wait until we really need their business. The longer a negotiation stays open, the more freebies or incentives we are inclined to offer our customers just to get them to sign. The lesson here? Keep the negotiation open for as long as possible.

About Geoff Heald BSocSc (UCT), BA (Hons)(Stellenbosch), MBA (Stellenbosch)
Geoff Heald has received wide acknowledgement for work and research on negotiation, the resolution of deep-rooted conflict, human development and strategic planning. He has published widely and was a senior researcher at Stellenbosch University Graduate School of Business. During the national negotiation process, Heald provided advice to some of the key players. He applied the principle of interactive planning to critique the viability of CODESA. Heald has consulted for many different organisations and facilitated the resolution of many industrial and social disputes.

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