What comes to mind when you hear the word negotiation? For many, it is salary or business deals. But negotiation is much broader than that. You can negotiate the cost of a car or home, insurance rates, goods and services, and the list goes on. To recognize that everything is negotiable is the foundation of understanding negotiation. The next element is understanding the best alternative to a negotiated agreement, also known as BATNA, a term made popular in the 1981 book Getting to Yes: Negotiating Without Giving In. Essentially it is the minimum offer that you are willing to accept that the other party will agree to. So if people understand that everything is negotiable and that we should always obtain our personal BATNA, why do negotiations fail? Here are 5 negotiation mistakes.
- Poor planning. In the words of Ben Franklin “failure to plan is planning to fail.” If you do not understand what is negotiable or what you want from the negotiation, it will likely lead to a bad deal. Failure to plan results in negotiations that may leave you angry or frustrated, spending more money, and investing more time than you have available. Save yourself time, money, and emotional angst by planning the negotiation before the negotiation happens. Think about everything that you would want if it would be your dream negotiated agreement. While you may not be able to negotiate everything, it is important to have options.
- Unethical behavior. Unethical behavior in negotiation can be seen in the form of false promises, unfair information gathering (gathering information in an unprofessional manner to benefit you), and competitive or win-lose bargaining. When done in negotiation, not only does it often lead to a bad deal, but it can jeopardize your personal reputation or company’s reputation, reducing the parties willing to negotiate with you. So while you may celebrate the short-term negotiating win, it will likely lead to long-term negotiation fails. Save your reputation by adhering to ethical and honest business practices.
- Accepting a bad deal or forgoing the win-win. Nerves and fear can play a large role in negotiating which can cause us to take a bad deal for fear of making no deal at all. It makes total sense to have these feelings as negotiation can be very emotional depending on what is at stake. However, when we accept a deal from a fear mindset, you will likely experience the emotional hangover of a bad deal. Initially, the fact that a deal was made is exciting, but that excitement will fade away as the reality that you accepted a bad deal sets in. You will start to realize the concessions made that created a bad deal for you and this frustration can lead to resentment. The resentment could be against an employer because you did not negotiate salary or to a business partner, either way, the feeling left over from a bad deal can have long term negotiations. Know your BATNA and do not bend, be prepared to walk away from any negotiation.
- Accepting a deal too quickly. Yay, you have laid out your terms of the deal and the other person is quickly willing to make a deal. While this might feel like an exciting time, it can often be a sign of a bad deal in the making. Why? Because the other party was likely willing to go further in the deal but you did not ask for it. This could mean there is literally money left on the table. Be reluctant to make a quick deal, take time to research and see the big picture, and understand the aim of the other party. It pays to be patient in negotiations.
- Dismissing cultural differences. If you are negotiating cross-culturally, it is essential to understand the cultural perspective of the other party. What cultural constraints do you need to consider? Dismissing cultural differences can result in failed deals as you neglect to see things from their perspective. Do your research, do not assume all cultures negotiate the same or want the same things.
About Crestcom International, LLC.
Crestcom International, LLC is an international leadership development organization, training more than one million leaders for 25,000 businesses in over 60 countries across the globe. Crestcom achieves this through a blend of live-facilitated multimedia video, interactive exercises, and shared learning experiences. Crestcom implements action plans and coaching accountability sessions to ensure measured development in key leadership competency areas. For more information, please contact your local Crestcom representative found here.