‘People fail in negotiations because they do not prepare enough’
Many business leaders have had to leave a deal unsigned when their expectations have not been met. They settle for too less, or they walk away too soon. All of it comes down to strong negotiation skills of the said leader. After all, negotiations are required everywhere – with your clients, partners, employees, vendors – even for personal relationships. What exactly can you call a successful negotiation then? Is it when you walk away with all your demands having been met? Or is it when both parties meet halfway to agree on certain conditions? Dishan Kamdar, deputy dean, academic programmes and professor of organisational behaviour at the Indian School of Business (ISB), Hyderabad feels that a deal can never be long term if the negotiation takes into account only the demands of one person. Edited excerpts from an interview:
Why are negotiations important?
Having good negotiation skills and strong communication competencies are the two most important ingredients for a leader to be successful. Who is a good leader? Someone who can execute and at the same time motivate people. At end of the day work gets done through people, and so human resource is your biggest asset. So there is a lot of intra and extra negotiations you have to go through. If you are able to apply the right fundamentals and right concepts, you will not only be able to get good outcomes for yourself and the organization, but also be able to sustain very strong relationships and motivate people.
How important is preparing for a negotiation?
Most people fail in negotiations because they do not prepare themselves enough. Or they do not know what to prepare for. You may know your product; you may know your industry. But you also say the industry is so dynamic. So what held true a month ago may not have the same value proposition today. You need to understand the change in the environment.
Should you share information right at the start or should you divulge information as you go along?
I would solicit information at the start. I would probe a lot; I would ask the other party about what they want, why they want, how important this is for them. In a negotiation there may be five issues we are discussing. We assume that all five are equally important for him or her. But that is not possible. I need to solicit information and help you to understand your priorities firsts. Then we can understand tradeoff possibilities. So giving away information is as important as taking information. But also be sure to reveal your priorities. That helps you to establish trust.
What are the four elements of the negotiation canvas?
First, a majority of negotiators are bad negotiators. So listening is the key.
Two, Effective planning. Spend at least 80% of your time planning your negotiation.
Three, keep your options ready. Have a walk-away ready before the negotiation.
Fourth, understand your opponent’s walkaway as well. Shadow your competition, market intelligence data. I get my power from understanding my walk-away so I am not vulnerable. But also understand my opponent’s walkaway so that I can be competitive.
And I am adding a fifth element here: having a strong relevance of communication competency. To be a good negotiator, communication skills are very important. As a soft skill, it is often overlooked.