Being Prepared
One mistake I see people making before a negotiation is not preparing properly. Although the intention might be there, they are not always aware of all the factors they should be considering. When I am coaching clients who are preparing for a negotiation, I get them to think through the three dimensions of negotiation: Problem, People and Process… the 3 Ps.
Let’s walk through Jame’s scenario. After completing his graduate training programme at one of London’s most prominent consulting firms, James took some time to travel whilst doing some soul searching. With his short career break and some new training he joined an educational startup as a product manager. He loves the company, the culture and his work. However, now that his goal is to buy his first property, he needs a higher salary.
Ps.
Please note that I’ve changed the details of the situation to protect the privacy of my client.
The Three Dimensions of Negotiation
The Problem Dimension
The first dimension we’ll look at is the problem dimension. This is what we think about when we ask the question of what is actually at stake. In James’ situation, this is his salary.
We can approach this side of a negotiation in a cold, tempered and rational way.
When considering the problem dimension of negotiation, we need to find a balance between cooperating and competing with the other party. While preparing for this area of the negotiation, James should consider what he or his employer can do to bring more value to the table. James just asking for a pay raise, would put him in a weak bargaining position. Instead, he needs to demonstrate the value he already brings to the table and make a case for his compensation accordingly. Or, if he isn’t yet bringing that value, he needs to include in his proposal what he will do to add more value to the company.
The key to success in this area is finding a balance between working with his employer to create more value vs capturing his fair share of that newly created value. We discussed value creation in negotiations in our “Mindset of A Successful Negotiation Post”.
The People Dimension
The second dimension we will consider is the people dimension; this is where we focus on who is involved. What is the history of the two parties? How valuable is the relationship? How much trust is there between the two parties? In James’ situation, he will be negotiating with his manager.
Relationship factors for James to consider with his manager
- They have a healthy work relationship with mutual trust and respect
- James’ manager is currently under a lot of stress as a big deadline on the way
- The relationship with his manager is important to James as if he does stay, he will likely need to continue to work with her
In the people dimension, a good negotiator will need to find the balance between being empathic and being assertive.
Being empathic
Empathy is the ability to understand and share the feelings of others. However, being empathic doesn’t mean you need to agree with what is said. The key for James is to demonstrate active listening skills. His proposal is more likely to be accepted by his manager if she feels she has been respected throughout the process.
Being Assertive
Being assertive means to be confident and speak directly about what you want. As James had already done his homework in the problem dimension, it meant he was clear about what he wanted.
The Process Dimension
The final dimension to consider is the process dimension; this is how the negotiation is conducted. Where will the meeting take place? How much time do you have to discuss? How is the agenda being created? What rules will you be engaging by?
The strategic tension which a good negotiator will be aware of is the relationship between the person negotiating and the decisions makers. On James’ side, things are simple as he is both the decision-maker and the negotiator. However, for the company, things are more complex as the manager is serving as a representative for the CEO.
For James to fully prepare, he needs to understand the dilemma his manager faces in this dimension. The more his manager follows the instructions given to her by the CEO, the less flexibility she has to be creative. In turn, the less likely her and James will be able to come up with an innovative solution to make both parties happy. However, the less his manager follows the instructions of the CEO; the more freedom negotiation will have and a higher likelihood of success. However, there is a higher risk she will make a deal which the CEO isn’t happy with, putting her career in danger.
From Theory To Action
Now that we’ve laid the foundations let’s take a look at what James did to prepare. Finished the story in part 2.
Ps.
If you’re interested in learning more about negotiations, you’ll probably also enjoy our post “The Mindset of A Good Negotiation“.
