Negotiate your way to Success

Near my home there is a very convenient local store where I get everyday supplies such as groceries and snacks. It’s not as big as a large supermarket but it’s bigger than a Seven Eleven type store.

I visit the store every couple of days or so, as it’s conveniently located and helps me to get essentials (and a few luxuries) before the weekly main grocery purchase aka The Big Shop!

A few months ago, I noticed a couple of new services at the store.

The first was a collection and drop-off service for online purchases, so whenever I wanted to send a parcel or sell something on line, I could drop the parcel off at the store. Equally, whenever I ordered something online, I could also collect my parcel from the same store.

After a few months, I noticed that behind the service counter, there was a continuous build up of parcels, which caused the store to look unusually cluttered and a little unprofessional.

The service at the counter became much slower, as I found myself waiting in a queue behind someone waiting for the sales assistant to find their parcel under a pile of random boxes.

I was unsurprised a few months later to find that the parcel drop-off and collection service had disappeared and the back of the service counter was now home to a wide range of whiskey and vodka, just like it did before it became a micro distribution centre.

I wondered how this deal was won in the first place, as it seemed a compelling business for the store in theory, but in practice it was anything but.

I did say I noticed two new new services at the store. The second new service was a self-service launder-mat, outside the store, to the left of the entrance.

This service took advantage of the high footfall and allowed people to conveniently wash and dry their duvets, pillows and other awkward items. Unlike the parcel pick up and drop off service, the self-service launder-mat remained.

It must have been a much more lucrative business, as it seemed to benefit both the launder-mat operator and the store, as the store didn’t need to do anything other than collect ground rent.

I spent a lot of time wondering how both deals were negotiated to get the products to market, and also how one of them seemed to fall apart whilst the other flourished.

Negotiation is an essential part of delivering projects or bringing products and services to market, and plans are usually never fully realised without some level of negotiation.

Here are some key observations on how to negotiate your way to resolve the blockers that could otherwise prevent your team from succeeding.

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Before any negotiation, you need to be prepared, so how does that work?

Understand the problem

Capture all the information you have about the issue, including how it happened, what the impact could be to the other parties, and who was involved. Write it down in a clear and concise way, so that you can articulate it when the time comes.

Most of this information might be in your project logs, but you may also have some background information from other sources.

What are you aiming to achieve at the end of the negotiation?

Make sure you know what you actually want in the first pace. What are you negotiating for? What would an ideal outcome look like for you?

Knowing this beforehand will allow you to be focussed and not concede too soon, or accept an outcome that doesn’t work for you.

Work out your best alternative, just in case

The term Best Alternative to a Negotiated Agreement, or BATNA, refers to the next best option available to you if you don’t get what you want out of the negotiation. Is there something that may still resolve your problem even if it’s not the exact outcome you need? If so, aim for that as a back up.

Think of the other person

Find out what the other party cares about. What are their objective and what would a good negotiation outcome look like from their perspective?

For example, you could be asking for more funding to purchase automating testing software, or increase resource to launch your product. The other person may have funding constraints and might be concerned with staying on-budget by the end of the year.

Back yourself with data

It’s difficult to argue facts. If you have facts to back up the situation you are in and the benefits that your desired outcome will bring, this could make your case more compelling.

Rehearse, rehearse, rehearse

Sometimes, if I don’t plan what I am saying before a key discussion, I will set the wrong tone from the outset, which affects the mood of the other person in the conversation, which in turn could adversely impact my chances of getting what I need.

To resolve this, I think about the tone I want to set, bearing in mind the tone I think will most resonate with the person I’m about to negotiate with.

Set the mood

If you know the person you need to negotiate with does no appreciate lunchtime meetings, or prefers face-to-face conversations, then make sure to accommodate their preference as much as possible. This shows you are taking their needs into consideration. Equally, if you know you can’t concentrate well at 4pm on a Friday, avoid this time if you can, as you want to be on good form to direct the meeting to your benefit.

Back to my example of the expertly negotiated in-store services, it was clear that one of the two services was less compelling to the store than the other.

Namely, the collection and drop off service helped the logistics companies more than they helped the local store who had to live with increased staff work load, untidy premises, increased customer wait times and from what I could see, unhappy staff. I’m not surprised they ended the relationship with the logistics companies.

On the other hand, the launder-mat service was visibly successful and proved to be a mutually beneficial partnership, as both parties benefited without conceding too much.

Bearing this in mind, when starting a negotiation discussion, my priority is to consider what value the other party will receive from the negotiation and make sure it’s truly worth it in reality and not just in theory.

If promising a benefit to the other party, it’s important these benefits are realized otherwise any hope of a longer term partnership will be short lived.

Explaining the win-win situation wherever possible is a top priority for me when negotiating to manage risks or issues. So what else should we consider?

Define the issue

Don’t beat be vague when describing what the problem is. All too often the problem can be watered down and made to seem smaller than it is. This is not the time to be overly polite or play down the issue. If you have a problem that is blocking your future success, call it out and state the impact to you and other parties involved.

• What is the problem?

• What impact is it causing?

• Who is it impacting?

For example, if you needed more money to complete your project, and you are negotiating with the CFO, it is worth acknowledging that being granted more funds could cause a challenge to the CFO, who may need to find the money from elsewhere, also creating extra work for them.

Show them you’re listening

I have a tendency to sometimes look bored and disengaged when someone is speaking, even when I’m taking it all in and listening attentively. I purposefully compensate by actively showing the other person that I’m definitely listening, through visible cues such as nodding or making clear eye contact.

Present your data and any evidence

Remember the data and evidence you gathered when preparing for this meeting? Now is the time to use it, but don’t overdo it. Too much information can lose your audience and cause confusion.

Use the most compelling and easy to remember information, but keep it short. For example, “if we are able to receive $x additional budget, we will be able to achieve $y returns as a result.”

Offer solutions

Don’t forget to consider the win-win approaches, as well as any other credible solutions to show that you haven’t simply come with a problem, but want to resolve it in a way that helps both parties. Think about the launder-mat, rather than the pick-up and drop off point 😀.

Show some flexibility, but not too much

Depending on the type of negotiation, give up some of your wants or needs, to benefit the other party. This is similar to creating a win-win scenario, but differs in that you are probably giving away less, but showing that you are willing to compromise on something of value to you such as limited amounts of scope, or timing.

Be careful not show willingness to concede too much, otherwise you may end up walking away having not gained anything of value to you or your team. It is wise to know what you are unwilling to negotiate, and stick to those boundaries during the meeting.

Open questions

If not fully sure what the other participant wants, try more open-ended questions. I have made this mistake a few times where I arrived at a negotiation with binary points and requests, without giving the other person a chance to reflect on their own thoughts. You may find that they are wiling to concede to a greater level than you previously thought.

Summarize

Be sure to summarize the decision and agreed position, ensuring there is no ambiguity on what was agreed.

Make sure you also follow-up with an email or note to confirm the agreed negotiation. If it relates to a project matter, updating the risk/issue log and sharing it with the individuals in question if appropriate, would also help dispel any ambiguity.

End on a high

Be calm and composed yet courteous during the meeting, but remember to thank the other person and show gratitude for their cooperation and the future outlook at the end of the meeting, leaving them with a positive final impression of the negotiation.

City taxis reimagined

Uber negotiated successfully with governments of city transport authorities worldwide, allowing it to operate its ride-sharing service. Uber used local campaigns and offers of data sharing with cities to help them improve traffic management.

This win-win bargaining tactic enabled Uber to enter a number of new markets. Local laws often had to be changed, showing the lengths that were necessary to change the status quo and allow innovation to thrive.

Search on the go

Search giant Google negotiated its way to ensure smartphone hardware manufacturers adopted its open source Android operating system, rather than developing their own.

Google gave the manufacturers the ability to customize their own versions of Android enabling each manufacture to differentiate their brands from competitors. In doing so, Google was able to make it’s services, such as Google search, the default for each smartphone using Android. This allowed Google to continue to dominate search and related services, as internet usage transitioned from desktop to mobile.

In 2023, google’s parent company Alphabet reported $224 billion in advertising revenue, with the majority coming from Google search ads.

Bed and breakfast going Dutch

Airbnb negotiated deals with major cities including London and Amsterdam to legalize short-term rentals. Without this agreements Airbnb’s product would not be able to enter these markets and therefore would have caused significant dents in their market opportunity.

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