- Why Do We Negotiate in Business?
- Why Traditional Negotiation Models Create Problems
- Why Conscious Negotiation is the Way Forward
- Negotiation and an Abundance Mindset
- 10 Tips for Effective Conscious Negotiation
Let me ask you… when you hear the word “negotiation”, what images come up for you?
For many of us, our minds conjure up that classic imagery of opposing parties on opposite sides of a conference table, eyeing each other up, perhaps whispering confidential strategies to a team member.
It’s a high-stakes picture of a boardroom battleground that we may have seen played out in real life, and have definitely seen in movies and TV.
What if I told you that, despite how exciting and powerful these interactions can seem on TV, it’s actually a terrible way to negotiate and usually creates more problems than it solves?
What if I told you that there’s an approach to negotiation that serves the big picture, strengthens relationships, creates mutually beneficial solutions, and all without getting your heart rate up?
It’s called conscious negotiation and it’s an approach that you can successfully practice even if the other side has never heard the term.
In this article, we’ll explore:
- Why we negotiate in business
- Why traditional negotiation models create problems
- Why conscious negotiation is the way forward
- Negotiation and an abundance mindset
- 10 tips for effective conscious negotiation
Why Do We Negotiate in Business?
What is the purpose of negotiation? By definition, to negotiate means “to confer with another so as to arrive at the settlement of some matter”.
So, what is a negotiation in the business context? It’s the coming together of two or more parties to create a mutual agreement. We negotiate to solve problems, create opportunities, build relationships, tackle challenges, take advantage of what comes up, and so much more.
If the core purpose of negotiation in business is simply to arrive at an agreement, that means the approach you take is open. It isn’t baked into the word. The battleground approach is just one option, and it’s the most limiting one.
Why Traditional Negotiation Models Create Problems
Let’s consider the question, “Why is negotiation important in a business environment?” Let’s say you’re negotiating a promotion at work, product costs with a supplier, or the terms of a partnership contract. At the heart of all of those examples is a relationship. One that, ideally, will be long term and mutually beneficial.
Negotiation is important because of the relationships. Yes, we need to solve problems and whatnot, but all of that is facilitated by relationships.
If we approach a negotiation with a win or lose mindset, we introduce unnecessary conflict and separateness into the relationship. It creates a “me vs. you” dynamic where each side feels the need to protect their territory. That isn’t a strong relationship. It’s a relationship of distrust where everyone feels like they have to have their guard up, always wondering what the other side is trying to get out of them.
In this way, it can never be a relationship of trust and respect. And yet… the relationship is the most important element!
How do we shift away from traditional models? Especially if the people we’re negotiating with are still in that traditional mindset?
Why Conscious Negotiation is the Way Forward
I use the term “conscious negotiation” because anytime we want to change an ingrained habit or mindset, it requires a commitment to being fully conscious of how we show up in every moment, so that old and ineffective patterns are held at bay.
Conscious negotiation is an all around approach. It’s a way of being that comes out in your interactions with others. When I’m coaching negotiation skills, I guide people to look within first, because it’s that critical inner work that strengthens them to show up consciously and intentionally. It’s doing the work to become your own unwavering rock in the storm.
Conscious negotiation is really a tool of conscious leadership. It’s a skill to be honed through practice and self-acceptance. I strongly recommend doing that inner work first to develop your inner leader. When you feel ready to embrace conscious negotiation, keep these three principles in mind as you move forward:
- Be aware of your impact.
You cannot control people or circumstances. You can only control how you choose to show up. This will have an impact on your inner experience, and influence the world around you. Be aware of how you show up and commit to striving for a positive impact.
- Focus on the big picture.
The big picture in a business negotiation includes organizational goals, your personal values and purpose, and the relationship you’re building with the other person or party. Hold that vision.
- Commit to integrity.
Integrity means wholeness. If you compromise on what matters to you, act against your values, let your Gremlins take the wheel, make choices that feel inauthentic to you, you give away pieces of yourself. Like pulling bricks out of a building, it leads to a loss of structural integrity. Commit to staying whole.
Negotiation and an Abundance Mindset
Those 3 principles of conscious negotiation will make the most sense, and be easiest to apply, when you embrace the concept of ‘ayni’ – an indigenous Andean concept that means, essentially, reciprocity.
So… why don’t I just call it reciprocity? Because there’s more to it. Languages are products of their cultures, which means there often won’t be direct translations for words that have complex meanings. ‘Ayni’ is one of those words.
‘Reciprocity’ means an exchange or agreement with mutual benefit. ‘Ayni’ brings into that notions of abundance and communal benefit. It is so hardwired in Western culture and Western business practices to see things from a scarcity mindset. The assumption is always that there isn’t enough to go around, that more for others means less for us, and that survival demands looking out for our own interests.
That assumption is fundamentally wrong. And yet, it creeps into almost everything we do in business, especially negotiation. That fear of scarcity drives us to act against our values, and drives a wedge into what could otherwise be valuable relationships.
The scarcity mindset is something we’ve embraced unconsciously for far too long. With conscious negotiation, we make the intentional choice to shift that thinking.
In practicing the 3 principles of conscious negotiation above, I challenge you to also embrace the concept of ayni; to believe in abundance, to believe that there is enough for everyone, and to believe that mutual benefits will have a far higher long term pay off.
With that in mind, let’s dive into what conscious negotiation in business looks like.
10 Tips for Effective Conscious Negotiation
1. Issues over positions
Positions are rigid. They trigger emotions and lead to people digging their heels in. Positions can also be rooted in values, which neither side will feel good about budging on.
Interests, on the other hand, are moving targets. They are the continually shifting circumstances each party is working with. Focusing on interests empowers mutual understanding of what matters to each other, and clarity into where compromises can be made that honour and respect all parties, and leads to growth outcomes.
Let’s explore some examples of positions vs. interests in professional negotiations:
|Position Approach||Issue Approach|
|I deserve to be paid more and my boss doesn’t want to do that.||Based on my skills, experience and credentials, I am in a position to be receiving higher compensation. I understand the organization has procedures, and there may be other issues I’m unaware of. I’d like to open a discussion.|
|They’re overcharging us for these parts. They need to back down, or we’ll find another supplier.||The recent price increase on parts is out of our budget. I see there have been fluctuations across the supply chain. I’d like to learn more about how that is impacting our supplier and how we can work together.|
|This is the better package for the client, but they’re going to want the cheaper option.||The higher priced package includes XYZ which, in my experience, is what this client needs to succeed. However, I recognize that they may have budgetary concerns. I’d like to learn more about their objectives and limitations to see how we can create a successful agreement.|
When you start from positions, you close so many doors. When you start from issues, you bring more doors into focus. It’s a “winning vs. creating” approach. Are you in this purely to win, or are you in this to create long term success?
Issues are where the most flexibility exists. It’s where you can create solutions while 1) staying aware of your impact, 2) keeping your focus on the big picture, and 3) acting with integrity.
2. Listen more than you speak
You’ve probably heard that before, but have you heard this one: the listener holds the power!
Although I don’t want you to think of this in terms of a power play. Rather, think of it in terms of your capacity to positively influence. The more you listen, the more you learn about the people, teams and organizations you’re negotiating with. The more you learn, the better you understand what matters to them and what challenges they face. The better you understand, the more possibilities you’ll see for both of you.
As organizational psychologist Ruchi Sinha noted in her TED Talk, many failed negotiations are actually the result of misunderstanding rather than disagreement. Commit to listening – really listening – and being open to understanding.
So… what if the other side isn’t talking? Here are some questions to get the communication flowing:
“What does this look like for you?”
“What is challenging you most right now?”
“In an ideal world where everything is possible, how would you like us to work together?”
“What comes up for you when we talk about XYZ?”
Lean into the power of silence. If they give a short answer, pause. Most of the time, they will want to fill the silence and you’ll learn more.
3. Show your cards
Trust is always a two-way street. Of course there are things you simply can’t share, either for legal or ethical reasons, and most people in a business negotiation are aware and understanding of that. There are, however, many things you can share, but may hesitate because of those deeply ingrained traditional negotiation models.
If you want everyone to open up and trust each other, you may have to take the first step. That may sound like:
“This company is important to me. My heart is in the work and I want to continue. I also have personal financial goals that I’m committed to meeting. Part of meeting those goals includes a compensation increase. Are you open to discussing possibilities?”
“With what’s happening in the economy right now, we’re concerned about committing to this price for parts. We have to plan for things we’ve never had to plan for before and it’s nerve wracking. What has your experience been?”
“I know this is the higher price point, and I strongly believe it’s what you need to meet the goals you’ve laid out. Can you tell me more about your current situation? I’m sure the more we both explore, the more possibilities we’ll find.”
4. Choose curiosity over assumptions.
It can be beneficial to put ourselves in someone else’s shoes and imagine what they might be experiencing, as long as we stay grounded and aware that our minds are engaged in imagination. This is curiosity.
Assumptions, on the other hand, assume that our imaginings are fact, and that’s when we put limitations on ourselves and those around us.
Always choose curiosity. When you think you know what someone’s issues might be, bring it out with curiosity: “Would it be correct to say… I’m sensing this is a hot button issue… It sounds like there’s more to this… Would you weigh in on a thought I had…”
The only assumptions you should be making are that you’re seeing things through your perspective, and that there are other perspectives for you to learn from.
5. Explore your mental models (and theirs)
Traditional ways of doing things end up creating the mental models that guide us when we follow them unconsciously. Author and psychologist, Adam Grant, recently said, “Too many people spend their lives being dutiful descendants instead of good ancestors.”
Just because a method worked for previous business generations doesn’t mean it’s applicable to today’s world. Or tomorrow’s. We need to fundamentally shift the way we do business because the world has fundamentally shifted. And because the world needs to continue to shift in even better directions.Mental models are a huge part of that necessary shift. Before entering into any negotiation, complete the mental models worksheet to better understand where your mindset is coming from, what’s driving it, what truly matters to you, and where you can be flexible.
Exploring mental models is a powerful way to shift your approach to one of creativity, and to ground you in the fact that any negotiation is simply a conversation between humans, meeting on human terms, with human strengths, human struggles, and human values.
Commit to being a good ancestor; to doing the work to shift your mental models, so that you start paving a better road for the ones who come after you.
6. Know your BATNA
Your BATNA is your Best Alternative to a Negotiated Agreement. One of the most common concerns in a business negotiation is that you might be taken advantage of. Nobody wants that to happen, and it can be a valid concern in a relationship where trust hasn’t yet been built.
BATNA means considering all your options before meeting with the other party, and determining your plan of action if an agreement can’t be reached; not just an idea, but a full plan, with steps laid out. For this, it can help to first define your ‘why’ – the purpose that drives you, your project or your organization. As Simon Sinek discussed in his TED Talk, your ‘why’ is what truly resonates with others. It’s also what truly resonates for you. It puts meaning behind all your efforts, including negotiations. Let your ‘why’ drive your BATNA to ensure that it is designed on a solid foundation.
Doing this gets you clear on exactly where you cannot compromise in order to maintain your integrity. With your integrity protected, everything else opens up to possibility, empowering you to focus your negotiations on those big picture outcomes you want to create. If you watched the Ruchi Sinha TED talk, you may have noted her point of not being attached to a specific outcome. Attaching yourself to an outcome creates a rigid, defensive mindset. Knowing your BATNA is the antidote to that. It empowers you to let go of specific, rigid outcomes and stay open to creativity, flexibility and co-creation.
7. Help them know their BATNA
Embrace your inner negotiation coach! It’s to your advantage that the other person(s) has the same clarity you have. Remember, the relationship is the priority. That’s the long term win.
People often enter negotiations without full clarity into what they can and cannot accept. They’ve decided what they want to get out of the conversation, but they haven’t really dug into their own ‘why’, which is where a world of endless possibilities exists.
Use powerful questions to get them thinking. Start with, “What truly matters to you,” then, as they respond, encourage them to excavate further with questions like, “What about that is most important?” “In an ideal world, what would that look like for you?” “You mentioned XYZ. Tell me more about that.” “Where does that fit into your big picture?”
8. Work to establish a shared purpose
A shared purpose is, by nature, an “us together” approach. When you have one, you can move forward as a team.
A really impactful strategy in creating a shared purpose is to get the other person to take the lead in designing it. Early on in the conversation, ask something like, “What do you see as our objective here today?” Using a phrase like “our objective” influences them to consider both of you together, and asking them to give their input first helps them to feel at ease and in control of the situation.
The reality is, each of you is in control of yourselves and a conscious negotiation respects that. By giving them this opportunity to exercise their control, you’re guiding them into a mindset of shared purpose and co-creation.
If you’re struggling to determine a shared purpose, there’s an amazing concept of the “third side” that mediator and author of Getting to Yes, William Ury outlines in his TED Talk. The idea is that in any negotiation, there are the two sides at the table, and a third side, which encompasses the bigger picture in which the discussion is taking place. Getting clarity on the third side can help you uncover the things that matter to you both, and what you can grow from.
9. Validate everything they say
Validating is not the same as agreeing, or giving in. Rather, it’s recognizing their experience and perspective as valid and worthy of mention.
Let’s say you’re negotiating a raise at work. Your manager says, “The company has standard pay rates based on title and years with the company.” You could respond with something like, “The company has standards in place. Here’s what I’m experiencing, and I’m wondering what else is possible.”
Or, let’s say you’re negotiating the terms of a sales contract. Your client says, “My superiors won’t go for this.” You might reply with, “You’re concerned about how your superiors will react. Let’s explore that.”
In neither of these scenarios are you capitulating or even agreeing. You’re simply validating.
Consider it an exchange of empathy – being empathetic towards the other, and asking for empathy for yourself. In Never Split the Difference, master negotiator Chris Voss explores this concept in depth. It’s about recognizing, with empathy, the other person’s concerns, then asking for empathy in return, which allows you to “disagree without being disagreeable”. In this way, you stop seeing each other as enemies, but rather, human beings with needs and concerns.
When we feel heard, seen and respected, we feel more at ease and open to co-creation. That’s what validation is all about.
10. Slow down
Urgency creates stress and blocks creativity. Take it slow. Maintain a calm, relaxed pace. Be in no hurry. Even if there’s a firm deadline, acknowledge it with confidence and kindness. That might sound like, “There’s a tight timeline on this, but I see plenty of time for all of us to be heard and to create an agreement that honors what matters to everyone. Why don’t you start us off?”
If others seem to be rushing through things, or pushing others to go faster, call it out with kindness, “I’m sensing you feel pressured to get through this quickly. I respect that and I want us all to walk out of here feeling good about what we create. I’m confident we can do that in the time we’ve been given.”
If the urgency is more about the time of day, or other things going on, shelf the discussion for another time. “It sounds like you’ve got a lot going on right now. I don’t want you to feel rushed into a decision when you don’t have to be. How about we pick this up tomorrow morning?”
Is Conscious Negotiation Weak?
Recently, I was challenged with the argument that many of the techniques used in conscious negotiation would be seen as weakness. I was teaching a class and a student was struggling with the fact that this isn’t the way things are done.
You know what? That student was right. This isn’t the way negotiations are typically carried out. These techniques aren’t what many of us are taught and they probably would be seen as weak by anyone dedicated to traditional, battlefield models.
Does that mean this is a weak approach? No. Quite the opposite.
For one thing, anytime you choose to go against the status quo, you’re choosing a path of high resistance; a path that demands inner strength, and a whole lot of courage.
Secondly, if you read back through the tips above, you’ll see that at no point are you expected to capitulate on what matters to you, give in to unreasonable demands, or show your whole hand.
Let’s explore an example. This particular student seemed to struggle most with the idea of showing your cards, and brought up the Ackerman negotiation model. I admit, that threw me. Having since looked into it, it’s a technique I know well (and you probably do too, in some form or another), but I’ve never known it by its name. Now I do and I’m grateful for that learning opportunity.
The Ackerman model is a technique of making an extreme high or low bid – depending on which side you’re on – before eventually negotiating up or down to your actual target. There’s nothing wrong with starting on a high or low bid. The problem is tying yourself to a particular outcome, as that closes your mind to other possibilities you may not have considered. It binds your flexibility. As long as you know your BATNA, you’re in a far more advantageous position if you’re open to more possibilities.
What if the other side is using traditional models like the Ackerman model, or some other technique? Won’t they see your approach as weak? Well… so what if they do? Another person’s perception of you doesn’t change what you have the power to agree to. That power stays in your hands. Let’s say they see weakness (or, what they perceive as weakness), so they try to take advantage of you. Again… so what? You’ve put in the time and effort to know your business, get clear on your BATNA, consider their side of things, align with your values and purpose… that’s a strength that can’t be toppled.
Weakness comes from worrying about things you can’t control. It shakes your confidence and divides your focus. True strength comes from staying grounded in the one thing you always control – how you choose to show up. Remember, all it takes is one person’s energy to shift the whole conversation. Choose consciousness. Choose to challenge the status quo; to be a changemaker; to refuse to take the path of least resistance because ‘that’s what everyone else is doing.’
Are You Ready to Take the Next Step?
To help get yourself ready to negotiate consciously, use the conscious negotiation prep sheet here. This sheet will help you get the clarity you need to negotiate with intention and focus. When you fill out the sections for the other side’s perspective, keep in mind that this is an exercise in imagination, not assumptions. It’s meant to develop your skills for seeing other perspectives and keeping your mind open.
In any negotiation, the one thing you can be sure about is that everyone involved is a human being. You’re all just people. People with similar fears and insecurities, and people with values and goals they need to align with. There is so much space for flexibility and creativity in that, so why limit ourselves and our organizations with a ‘win or lose’ mindset? Adopt a conscious mindset and open yourself up to possibility.
If you are interested in conscious negotiation coaching to open up possibilities for yourself, your team and your organization, I invite you to connect with me.