The Four Phases of The Negotiation Process
When you apply the phases of negotiation effectively, you'll more consistently be rewarded with out-sized results.
‘Let us never negotiate out of fear. But let us never fear to negotiate.’ John F. Kennedy
If you sit down and analyse your negotiation preparation,certain patterns should begin to appear. It’s like putting a jigsaw puzzle together. Without consciously being aware, most of us realise that we are approaching negotiations inconsistently, or even haphazardly. There are many benefits to following a tried and tested formula for repeated negotiation success. Negotiation skills without a methodology tend to work on the simple deals, but fall short on the bigger complex negotiation deals.
People perform and engage in negotiation, mediation, and dispute or conflict resolution practically everyday of their lives, without realising they are doing so. Often without consciously understanding or knowing the process. Our approach as individuals vary according to our upbringing, culture, education, life experience. There are numerous factors that influence our development as individuals. Our success or lack of success varies. Sometimes we zig when we should have zagged, but then again ‘Hindsight is 20-20’.
Here, we are going to consider the various phases of the negotiation process. Large companies’ procurement departments employ RFQ, RFP, RFT and RFI processes to support their negotiations. Similarly, many corporate clients on our Sales Negotiation Courses have received training or at least read books on a variety of sales negotiation methodologies. By visualising the procedure, and what each phase entails, we might develop a larger understanding, and become more proficient at negotiating in the course of both our professional and personal lives. It doesn’t matter whether you’re negotiating your teenager’s curfew hour, or a more realistic and flexible work schedule with your boss. In the end, it all boils down to the same thing – you want to be able to negotiate effectively and successfully.
The 4 Phases of the Negotiation Process
Everything we do, if we are to perform the activity properly, requires a certain degree of preparation beforehand. No doubt, there are many occasions we admonished ourselves for not being prepared, when things didn’t turn out as well as we thought they would. Preparation is tantamount to any successful activity or endeavour. Negotiation is no different.
The first thing we need to determine is whether there is actually any reason to negotiate at all. Secondly we need to be clear on the specifics we want to negotiate about. We have to get ‘our ducks in a row‘ before we even contact the person with whom we are to negotiate. We then need to establish some form of negotiation agenda before beginning our talks. We should identify the correct people who will be involved in the talks and their levels or responsibility and authority.
Where possible we should attempt to obtain as much information about these people and their company or organisation. Intelligence gathering is crucial in obtaining a picture of the other side so we can assess their needs, motivations, and goals with respect to our own.
Next, we need to set up a venue where we are going to meet and have appropriate time to conduct the talks. It is a good idea to begin this process by establishing direct contact with your counterpart. We can begin by building some kind of rapport, and set out the agenda, through a variety of means such as phone calls, faxes, e-mails, and even an informal personal get together beforehand.
This phase is where we develop the foundation of the agreement by framing the issues, without becoming bogged down in the miniscule details. The building blocks need to be put together to understand the basic concept of the agreement we are seeking. It’s like two separate parties coming together to consider the blueprint design, or structure of the agreement. We are attempting to formulate principles upon which we can both agree, such as who will provide financing or the licensing aspects for example.
This is the phase where we define each other’s goals and objectives through fact finding and by establishing some measure of compatibility. It’s not unlike that awkward first date with the opposite sex. We begin to consider creative options and discuss negotiation concessions. We advance proposals and counter-proposals, back and forth, until some manner of tentative agreement is reached.
The terms of the partnership are re-framed until they reach the level, where both parties are as satisfied as they can be, within the various parameters of what they bring to the table. This is how we arrive at the basic concept of our agreement.
3. Settling the Details
Simply put, this phase sees the completion of the agreement. Here, we use our external specialists to complete the details of the venture, that we are about to mutually embark upon. This phase discusses the problems of implementing the partnership realistically, so that it is both viable and workable. We also hammer out the details as they relate to production, scheduling, handling delays, task responsibility and authority. We will use our own technical and management people to streamline the process so it works smoothly, and meets both our standards and requirements.
The final portion of this process is then left to the wordsmiths, usually our respective legal experts, to put our agreement into written form documentation, and to describe the contractual obligations to which both parties have agreed.
This is not the ‘walk in the park’ like it sounds. Settling the details correctly and meticulously is extremely important. Many negotiations have collapsed because the parties failed to devote the necessary time and work to address the details efficiently. Until these are properly ironed out, we can’t celebrate our success.
Just because we’ve signed on the dotted line doesn’t means that it ends there. We cannot toss the contract into our files and forget about it. It seldom ends there as problems
always arise. Any aspect of any contract may need to be re-negotiated, or the details altered to counter a broad variety of changing circumstances. Expensive and embittered legal battles can be circumvented simply by keeping the lines of communication open with our counterparts. We should be experienced enough by now to understand, that nothing is ever as simple as it seems.
If we properly apply the phases of negotiation effectively and efficiently, positive results will manifest themselves in accordance to our efforts. Anything worth doing is worth doing well, and as negotiation is something we can’t hide or run away from, we might as well do it right.