Happy Lunar New Year…
This week I have had the pleasure of learning how some of our clients have been celebrating the Lunar New Year - the year of the Tiger!
It is said that the Tiger represents bravery, courage, and strength. This got me thinking - as a negotiator, how can we exhibit these big-cat like qualities in our negotiations? How might we be brave, courageous and strong in order to master deals with highly desirable business outcomes? Well, there is no magic bullet (unfortunately!), but one simple thing we can do which has an enormous impact on our ability to head into a negotiation feeling confident, composed and in control is making sure we are well prepared.
A fundamental part of the preparation process is in the development of long wish and concession lists. After all, negotiation is a trading process!
The evidence shows us that the longer and more creative your wish and concession lists are, the more flexibility you can show at the negotiating table. This in turn enables us to negotiate much more effectively. In fact, one of the core focuses of our consulting and advisory engagements with clients, is helping them build a strong and robust list of trading variables they can take to the negotiating table.
One of the key tips I share with my clients to start this creative process is around the concept of using time as a negotiation variable.
I remind them that if they are having problems thinking creatively about their negotiation variables, not to forget about the effects of time within a negotiation. As J.R.R Tolkien quoted “All we have to decide is, what to do with the time that is given to us”.
Time is an important parameter in all negotiations. Indeed, time may be used to set a deadline for negotiations – to ensure resolutions are achieved in a timely manner and negotiations don’t drag out. But time can also be traded.
This year when you are busy creating your wish and concessions lists, pause to consider how you could use time to accept their terms under conditions that work for you (or vice versa).
Though not an exhaustive list, here are a few ideas of how you could consider using time as a trading variable:
Payment Terms – Could you agree to your counterpart’s demands if their payment was provided in advance? Or would they agree to penalties for overdue payments? Or if you are the buyer, will they agree to periodic instalments rather than a lump sum payment at the start? Or could they provide a discount if you provided early payment?
Backdating – Another time related variable is that of backdating. Perhaps your counterpart has made a demand that you could agree to if the terms were backdated?
Length of Contract – Probably one of the more common time related variables – under what circumstances would you (or they, if you’re on the selling side) agree to a 1-year contract? But what about if it were extended to 2 years, 3 years, 5 years….?
Exclusivity Period – Could you agree to their demand if their product or service was made available exclusively for a set period of time? Or would they agree to your demands if you were to provide this guarantee to them?
Guaranteed Lead Time – Or perhaps your counterpart could accept your proposal if you can commit to a guaranteed lead time for delivery from the time they place their order.
In summary, a well thought out and well-structured preparation is an important step in the negotiation process which will help you feel confident at the negotiation table. An essential component of the preparation phase is developing a robust and creative wish and concession lists. If you’re feeling stuck when considering what to include in your lists, have a good think about how time could be traded to achieve your objectives!