Breaking Barriers to Business Negotiation Agreements

‘You may be deceived if you trust too much, but you will live in torment if you don’t trust enough‘ Frank Crane

How in the world can we ever have hope to extend our civilisation to soaring heights, poised to caress the distant stars, without cooperating with each other? A business that toils away in isolation, in today’s churning and ever evolving global world of dynamic commerce, will likely shrivel and perish with barely a noticeable whimper.

There are many reasons why negotiations may not be carried out successfully. Here, we shall examine several of the more common reasons and offer solutions, to either repudiate or overcome them.

The Hard-Nosed Negotiator

We’ve all faced them haven’t we? The person who views every negotiation as their own personal war where there can be only one winner. Some of their more charming traits include:

• Unreasonable offers.
• Will take negotiation concessions, but don’t give them, or do so but only with great fanfare and difficulty.
• Will take information and wield it as a weapon against us, while hoarding their own information like a miser guarding their gold.
• Bull-headed and unyielding.

Solution:

• Probe your negotiating counterparty first to find out what kind of negotiator you’re facing.
• Anticipate unreasonable offers and remember your reservation price, aspiration base, and your BATNA (best alternative)
• Don’t give out information that can be used against you.
• Give a little, mostly harmless information to your counterparty and see whether they reciprocate.
• Offer different negotiation solutions and ask which one they prefer.
• Be willing to walk away.

Lack of Trust

It happens. Both of you find yourselves sitting at the negotiation table, eyeball to eyeball, wondering just how much you can really trust the person staring back at you. You’ve heard unsettling rumours that the negotiator on the other side has a nefarious reputation,making you unsure how to proceed with this individual. The best advice is to proceed by slowly building a bridge, as the situation may yet be salvageable. We simply need to be a little more cautious.

Solutions:

• You can begin by being polite and sincere.
• Emphasise that any negotiated agreement hammered out at the table, will be based on the reliability of the information provided by the other side, and will be nullified otherwise.
• Ask them to provide documentation to support the data they present.
• Design the agreement to stipulate fulfilment of the agreed upon terms.
• Use Compliance Transparency to verify the terms of the agreement are being fulfilled. This term refers to using some vehicle to monitor the terms of your agreement. For example, you might want to insist on your right to verify their books to guarantee accuracy, by using an accountant to confirm the figures they provide.
• Use enforcement mechanisms, like financial penalties or a security deposit for incidents where they fail to comply with the contractual terms.

Know Enough About Them?

We cannot find it easy to relate to our counterparts when we don’t know anything about them, or their goal sand objectives. The reverse is equally true. We might need each other without knowing just how much, and that’s the dilemma. However, if both parties are hesitant to show their cards and reveal their business purpose in response to negotiation questions, than how can we possibly hope to negotiate a favourable deal in the process?

This often transpires when each party fears they will put their side at risk, by opening up first.

Solution:

• Nobody can move forward if someone doesn’t take the first step. So, don’t be afraid to take the first crucial step, but be wise and make it a small one by only revealing something harmless about your goals. Generally, the other side will reciprocate and the beginning of a constructive dialog can now be initiated. By starting slowly, you will also begin to build up the trust levels as your bridge expands slowly across the chasm, from either side towards the center.

Spoilers

This often occurs in multi-party negotiations. Occasionally, there’s at least one party-pooper who’s out to sabotage the negotiations. Their motives may vary, such as wanting to maintain the status quo, or they feel threatened, see themselves as being marginalised and suffer as a result. They may oppose the deal passively by refusing to make a commitment, or actively oppose the deal simply by presenting direct opposition, or using some other form of subterfuge to sabotage the talks.

Solution:

• Be prepared for these spoilers, by considering their real fears and anticipating what kind of impact an agreement would have on their objectives. In other words, identify who might have something to lose if a deal were negotiated, or if an agreement was not successful.
• Counter their resistance and explain ‘why‘ this change will benefit them. Illuminate their gains and explain that they may actually profit from the proposed venture.
• Offer them roles so that they will be able to retain control over their business and be more proactive in the negotiation process. Assure them that they will be active and productive members in a partnership.
• If all else fails, it might best to form a coalition with the other parties, to overwhelm and counter the spoilers.

Culture and Gender Barriers

Sometimes companies, people, and cultures simply operate differently. One company might be conservative and staid in its approach, while another might be more entrepreneurial and dynamic. We might encounter obstacles in negotiating with a person of the opposite gender, or stumble upon culture barriers because of our different perspectives. As a result, we might blame our difficulties solely on these differences as the basis for the obstacles, that block our path to a successful agreement.

It is vital we do not make assumptions in these situations. The solution may lay in stopping ourselves from jumping to a conclusion, and by analyzing the problem thoroughly. We must step outside of any preconceptions or biases that blur our vision. We must view the problem logically to understand what issues are acting as hindrances, or whether there is a pattern that can illuminate our lack of understanding. Go back to the basics. Examine the issues and their positions by learning the motivating reasons that lay behind objections, either theirs or yours. Then, find ways to solve these concerns and revamp the solutions. This process will at least initiate a more positive and productive conversations.

Conclusion

Every barrier to a successful negotiation should be approached as a challenge, not a problem. If you can analyze and isolate the problem, then you can create solutions or options that may possibly resolve whatever is acting as a barrier. The more you can learn to overcome these challenging sticking points, the more you enhance your business negotiation skills in the process. If all else fails, and you have truly exhausted all possibilities, then you also have the final option of simply walking away from the deal.

 

1. Harvard Business Essentials ‘Negotiation’ Harvard Business School Press, (2003).
2. Max H. Bazerman, Margaret A. Neale, ‘Negotiating Rationally’, The Free Press – MacMillian, (1992).
3. Leigh Thompson, ‘The Heart and Mind of the Negotiator-2nd Edition’, Prentice Hall Business Publishing, (2001).