Negotiation is one of the most common forms of Alternative Dispute Resolution. The best negotiation practices have no magic or mystery in them. After attending the BCLP x Queen Mary Annual Commercial Negotiations Competition 2020/21, there are five steps that I have found often manifest into the best negotiation practices.
Stage 1, Prepare:
There is no alternate route to preparation. It is the primary phase of any exchange. However, individuals frequently do not give it the time it warrants. They regularly race into the “information exchange stage”, or even straightforwardly to “bargaining” (further explained below).
For example, before I started negotiating with the other party, I looked into what it truly is that my company seeks to achieve in the negotiation. Then, I prepared my negotiation strategy. From my experience, in order for the parties to conclude an agreement favourable to both, I encourage everyone to keep a collaborative approach, and be as polite as possible.
Stage 2, Information Exchange:
The information exchange stage happens when you start to draw on the opposite side, share data and look into what can be the best way to reach a decision that favours both parties. In order for that to happen, one must consider what you expect to take out of the negotiation and exchange data in ways that have scope for further bargaining.
It is important to build compatibility and trust, without which neither one of the parties will feel good sharing interests. One way to achieve this is to discover and demonstrate enthusiasm for the other party’s business culture, character, outside interests, and qualities by asking questions and getting a very good understanding of their business.
Potential areas to focus upon in this stage of the negotiation, where both parties take the following characteristics into consideration and ask similar questions, are:
- Reliability – Are they fair and trustworthy?
- Competency – Are they sound and capable?
- Amiability – Can you function admirably together?
- Arrangement of interests – Are your inclinations lined up with theirs?
Thus, the aim at this stage is trust-building.
For instance, in my experience with the competition, I negotiated agreements where the other party would announce they entered into new ventures. Upon hearing this information, I took a moment to congratulate the other party for new beginnings. This helped me build rapport and demonstrate amiability while also continuing to exchange information.
Stage 3, Bargain:
Haggling can be best described as an “acknowledgment” with the other party, in any event, when both parties are not eye to eye.
Excellent negotiators are aware that feelings or emotional involvement can preclude them from meeting their negotiation aims and affect the working relationship with the other party. Instead, it is recommended that all arguments in the bargaining stage and exchanges of information are objective, correct, rational and follow a logical structure.
Staying balanced and being socially conscious and aware matter extraordinarily here. Finely tuned relational abilities are basic at this point as parties investigate alternatives to come to a consensus and execute exchanges to solidify objectives. This stage is best utilised when arrangements fulfil everybody’s needs.
Stage 4, Conclude:
Stage 4 is the point in the process when parties agree and establish. It is essential to see whether the opposite side can achieve the things they said they would in the beginning of the negotiation. This is an ideal opportunity to expressly state the normal interests and produce an extensive outline of the arrangement. Once in a while, one needs to think about methodologies when consensus is not achieved. That is when one must remember to thank the other party for their ability to arrange – even though an agreement is not reached.
For example, I found it useful to sum up at the end of each negotiation to confirm the consensus that both parties have reached. This provided structure to the negotiation, and ensured engagement, clarity and efficiency.
Stage 5, Execute:
Stage 5 is the execution of the agreement. This stage may be seen as groundwork for fortifying the relationship and manufacturing trust between parties. As one is expected to have learnt more about the opposite side in this stage, this will prompt simpler arrangements next time when the opportunity arises.