372 / PREPARING TO NEGOTIATEBeing prepared
Setting the limits
You should always go to the negotiating
table with clear answers to the following
questions: why do you want to negotiate
the deal? How will this deal create value
for you? What are your “deal breakers”?
What must you have from the deal, what
would you like, and what are you willing
to give away? There may be alternative
outcomes that you would be willing to
accept—what are they?Knowing your objectives
Set your objectives high but not
outrageously so. It is tempting to censor
your aspirations, setting them too low to
protect yourself from the prospect of
failure, but in doing so, you will almost
certainly achieve less than was possible.
If you fail to set clear objectives, there is
also a danger that you could get trapped
in an “escalation of commitment”—an
irrational urge to “win” the negotiation at
any cost.
Escalation of commitment is a real
hazard in negotiation, and happens when
you refuse to give up your pursuit of a
negative course of action when the wiser
choice would be to cut your losses and
move on. Always set a limit for how far
you are prepared to go and prepare an
exit strategy (a means of walking away
from the deal).Your success in a negotiation depends largely on the quality of your
preparation. Start by thinking through your position and your objectives.
Having clear goals will protect you from making too many concessions
and motivate you to perform better. Objectives should be specific,
quantifiable, and measurable. Only then can they be used as valuable
benchmarks to measure your progress during the negotiation process.DO THE RESEARCH
Information is power. Find
out as much as you can about
your counterpart before you
sit down to negotiate.VALUE THE ISSUES
Draw up a list of potential
negotiating points, starting
with the most critical.
Give each issue a value,
and estimate the value that
your counterpart is likely
to place on it.Tip
Tip
US_372-373_Being_prepared.indd 372 30/05/16 3:06 pm