We frequently think that the best negotiators are those who are quick on their feet and ready to go at a moment’s notice. We imagine that the ability to negotiate is some innate capability that some people have, and other’s don’t. This couldn’t be further from the truth. The key to a successful negotiation is preparation. Lots of preparation. From background research, to concrete strategy and planning, time spent preparing to negotiate will pay off when you sit down at the table.
This guide lays out six steps you can take to prepare for your next negotiation, and how to use storyboards and graphic organizers to make that preparation both effective and efficient. You’ll find templates that you can use to help in your preparations, and examples to illustrate finished results.
All the examples follow the story of NextWidget, a smart-widget startup, as they prepare to renegotiate their contract with Fabricorp, their manufacturer.*
Good preparation needs to rest on a strong foundation of knowledge. Before you even begin to plan a specific negotiation, you should take time to research and reflect on elements that will play an important role in it. What are some points you should be sure to focus on?
You are a participant in every negotiation you enter. If you can be honest about yourself and your position, you can avoid many stumbling blocks of novice negotiators. Before beginning preparations for a specific negotiation, you should know:
Something about yourself and how others perceive you
A "Johari Window" is a simple exercise to record and expand self-knowledge. Self-reflection will yield dividends across a wide range of activities, and may be particularly helpful if you are negotiating as a team rather than as an individual.
Your preferred negotiation style
Are you cooperative negotiator? A competitive one? If you’re not familiar with negotiation styles, read up and reflect on how you feel most comfortable when negotiating. Think about some of your recent negotiations, and how you approached them.
Strengths and weaknesses of your position
A "SWOT analysis" is a great tool to get a realistic and balanced picture of where you stand.
It isn’t enough to know where you are coming from, you should also know as much as you can about your opponent.
Imagine yourself in the position of your opponent.
Perform the same examination you have just undertaken for yourself, but from their perspective. If nothing else, organize the salient information you have about your opponent with a spider map, so that you can see it at a glance.
What do they want out of the negotiation?
Consider what the other side of this negotiation is looking to get from the negotiation. Be cautious not to jump to the conclusion that they want to nickle and dime you. Many times, “opponents” are potential collaborators, if your interests align sufficiently.
What is your relationship with the other side?
Are you familiar? What is the history? Consider making a timeline to organize this information. Trust is an important factor in negotiations and your history with the other side will be a big component of that.
If you’ve already done a SWOT analysis, you’ve begun to think about some of the environmental factors surrounding the negotiation. These can be further explored on a macro level with frameworks like Porter’s five forces, or a PEST analysis. Other things to research and consider include:
Who is watching this negotiation?
Even private negotiations have audiences. Negotiators on both sides may have stakeholders they are reporting back to, or competitors who will catch wind of the result. Some of the most important audience members are in the room, since every negotiator wants to be able to walk away from the table with a winning narrative.
What are some ground rules you want to have for the negotiation?
Are there any resources your opponent is likely to want? What issues are off topic or out of bounds?
Information about your industry
Any information about your field or industry can be helpful, and will likely be useful in the future anyway. You may not even think about this information during the negotiation, but it will help orient you and inform your preparations.
An often neglected aspect of negotiation planning is to really consider what the objectives are. It is easy to lose perspective and jump to an obvious conclusion then pursue that objective throughout the negotiation. Hasty conclusions may not be as beneficial as they first appear, and may crowd out creative alternatives.
Consider what you need out of the negotiation, and what you want out of it. “Needs” are those objectives that are inflexible and will require you walking from the negotiation if you cannot get. They also include those things that you can’t do, either because it is out of your power, or it is not worthwhile. They form your bottom line and should not be conceded.
”Wants”, on the other hand, are objectives that can be traded away, or modified in some way. Even if they are valuable, not getting them will not make the negotiation unsuccessful. They should be traded away for “needs”. They also form fertile ground for creative collaborations, since they can change to accommodate the needs and wants of the other side.
Start by brainstorming things you’d like to result from this negotiation. Divide the results into “needs” and “wants”. Combine your “needs” into a bottom line, and see if there are any “wants” that are incompatible. Consider ranking the remaining “wants” by how valuable they are to you.
Since not all negotiations are successful, you should be ready to walk away from the table. You already know what you need from the negotiation, and have a bottom line, but you should be prepared with a Best Alternative to a Negotiated Agreement, or a “BATNA”. There are four steps in formulating a BATNA:
Generate by brainstorming a wide range of alternatives. Imagine that the negotiation has already failed, and think about what you would do. A spider map is perfect for this.
Develop some of the more promising ideas into a fleshed-out scenario with a Frayer Model or storyboards. Make sure to include important steps, results, and other salient details.
Evaluate each plan by looking at the likely outcomes and costs. If you can, compare the options across commensurate metrics using a grid.
Select the most promising of all the options. This is your best alternative to negotiated agreement, your BATNA.
In evaluating your alternatives, you may be able to use a number of very specific metrics, but even a very general analysis can be covered by dividing information into solid data, clear strengths, possible weaknesses, and other pertinent information. Illustrating the most salient point in each category will make the comparisons more striking.