Business negotiation is an indispensable skill every individual should posses and master. It is impossible to succeed in business or any other organisation without it. Surprisingly, research suggests that business school graduates are not being taught the basic principles of negotiation. Many graduates have no clue as to how these principles affect human behaviour.
What business schools teach about negotiation?
Training in business schools usually revolves around how to get the ‘yes’ answer and thereby close a deal. Invariably, most of these tactics do not work in real-world situations, often destroying negotiations.
Best Alternative To a Negotiated Agreement (BATNA)
A popular technique known as BATNA is commonly taught to students in major business schools around the country. The idea is that all deals should be entered with a Best Alternative To a Negotiated Agreement.
There should always be a partial alternative ready in case the initial offer is rejected. Assuming that this results in a win-win situation, the contract ends with a least expected outcome, and not with a win.
By adopting BATNA, the end result of a mutual agreement may trigger too many compromises, and thus the final outcome is not a favourable one. Business schools are teaching the idea that any agreement is better than no agreement. There are so many things that could go wrong if this method is adopted. Negotiation is about more than just meeting the other party with a preconceived notion of the outcome based on assumptions or expectations.
Invariably this will lead to a compromise deal which gives away more than was needed. A true negotiator recognizes that it is all about human behaviour. It is the human element which will have an issue with some part of the deal. Recognizing what the problem area is and working on a solution for that is the mark of a good negotiator.
Business schools should re-evaluate their teaching methods and ensure the following principles are taught:
It’s not an appalling act to admit you don’t know something when bargaining with people. A smart negotiator is not afraid to disclose that she/he does not know what is driving the other party, and uses a negotiation meeting to discover this.
Any meeting should be approached with the attitude that you do not have the facts until the other party presents the problem. This provides something to centre on and solutions to be processed in order to eliminate the issue.
Understanding the decision
Facts and figures and even logic can be thrown at an opponent but if it does not answer their problem there cannot be an agreement. The first step in any negotiation is to understand the issue, the reason why they need to negotiate. It is then possible to propose a solution.
Ask the right questions
It is always important to be prepared for any meeting and to have as many facts and figures available as possible. However, these are just props. A good negotiator will ask the right questions, usually a what, how or why.
Asking the key questions, such as “What is the biggest issue you face?” will achieve a far better response than “Is this the biggest issue you face?” The right questions, gently prompted at the right time will guarantee a response which you can deal with and resolve the issue to everyone’s satisfaction.
Listen and observe
Listening is a key skill. The other party may give away information unintentionally when answering questions. An experienced negotiator will pick up on this information and in what context it was said. This will assist in negotiations as an understanding of the issue develops. Equally observing the other party may provide clues to any issue, particularly if they get emotional.
Everyone gets nervous, excited or agitated at times. Our voices reflect this change and this change is noticeable. A good negotiator remains calm and emotionally passive throughout the process. This ensures nothing is given away to maximise the deal. Equally, it eliminates any chance of the deal being destroyed by one thing said in the heat of the moment.
There are numerous things that business schools don’t teach their students. Fortunately, many of these institutions have realized that facts that actions are a lot more important than theory when it comes to practice. In today’s compelling business environment, aspiring CEOs and entrepreneurs should negotiate, make mistakes and pick themselves up. Practice makes perfect – that’s the only sure way you can master negotiations.
By Davis Miller and TheGapPartnership.com!